O.A. Case No. 17 of 2002. Case: Allahabad Bank Vs Bajarang Enterprises and Ors.. Ranchi Debt Recovery Tribunals

Case NumberO.A. Case No. 17 of 2002
CounselFor Appellant: A.K. Pathak, Adv. and For Respondents: Rajesh Kumar and Pankaj Kishore, Advs.
JudgesS.K. Mohapatra, Presiding Officer
IssueRecovery of Debts Due to Banks and Financial Institutions Act, 1993 - Section 19; Limitation Act, 1963 - Schedule - Article 1; Banking Regulation Act, 1949
CitationI (2004) BC 141
Judgement DateJuly 24, 2003
CourtRanchi Debt Recovery Tribunals

Judgment:

S.K. Mohapatra, Presiding Officer

1. The applicant Allahabad Bank, Doranda Branch, Ranchi had presented this Application under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as Act) in DRT, Patna on 8.12.1998 against the defendants for recovery of debts of Rs. 1,03,61,676.00 paisa as on 8.12.1998 and thereafter with pendente lite and future interest @ 21.75% per annum from 9.12.1998 with quarterly rests including cost. The application was numbered as O.A. 193/1998 and during the pendency of the same with the establishment of Debts Recovery Tribunal, Ranchi for the State of Jharkhand, the application was received on transfer in this Tribunal and renumbered as O.A. No. 17/2002.

2.1. The brief facts of the case of the Applicant as stated in the application are that the Applicant Bank is a Body Corporate constituted under the Banking Companies (Acquisition of Transfer of Undertakings) Act, 1973, having its Head Office at 2, Netaji Subhas Road, Calcutta-700 001 and one of its Branch Office at Doranda Branch, Ranchi, Jharkhand. Defendant No. 1 is a Partnership Firm carrying on business of Handling Agent/Distributing Agent of Kalyanpur Cement Ltd. Defendant Nos. 2 and 3 are its Partners and defendant No. 4 is the Guarantor. Defendant Nos. 1, 2 and 3 submitted application on 20.1.1994 for financial assistance and on considering the application, applicant Bank sanctioned Cash Credit limits of Rs. 18.50 lacs and Overdraft facility (Book Debts) of Rs. 4.50 lacs vide sanctioned letter dated 26.4.1994. Defendant Nos. 1, 2 and 3 accepted the terms and conditions and executed various documents like Demand Promissory Note, Deed of Hypothecation, etc. Defendant No. 4 along with defendant Nos. 2 and 3 have personally guaranteed the due repayment of the loan amount of Rs. 23 lacs. That apart, defendant No. 3 created equitable mortgage by depositing title deed of property as mentioned at Schedule "A" of the Original Application. Defendant No. 4 also created equitable mortgage over her property as mentioned in Schedule "B" of the application. On 20.2.1995 the borrower requested the applicant Bank for further enhancement of the loan. Accordingly, the following facilities were sanctioned:

Cash Credit Limit -- Rs. 42 lacs Overdraft Limit -- Rs. 10 lacs Bank Guarantee -- Rs. 25 lacs

2.2. Defendant Nos. 2 and 3 for defendant No. 1 accepted the aforesaid enhanced sanction of loan and executed various agreements like Promissory Note, Deed of Hypothecation, etc. Defendant Nos. 2, 3 and 4 have personally guaranteed the due repayment of the enhanced loan. Supplemental mortgage was executed in respect of the properties described in Schedules "A" and "B" to secure the enhanced limit. Besides defendant No. 2 also deposited two sale deeds of the property mentioned in Schedules "C" and "D" of the Original Application to create equitable mortgage by way of collateral security. It is relevant to mention that defendants have not availed Bank Guarantee limit of Rs. 25 lacs. Defendant borrower confirmed the balance both Cash Credit and Overdraft accounts on 3.7.1996. Since the borrower failed and neglect to operate the account in the agreed manner legal notice was sent on 20.11.1996 but without any avail. Hence this application.

3. Under Section 19(4) of the Act and Rule 11 of DRT Procedure Rules of 1993, notices were served to each of the defendants by DRT, Patna. It is seen that all the defendants have appeared to contest the case. I have heard the arguments of both the parties and have also carefully perused the case records, evidences and written arguments, filed by both the parties.

4. The Applicant Bank has filed evidence by way of affidavit of Sri Bidyut Banerjee, Senior Manager on 23.6.1999 and of Sri Devendra Kumar Singh, s/olateL.N. Singh, who at the material time was Manager, on 5.8.1999 before DRT, Patna. The Applicant Bank has also filed and relied on the documents, the details of which are as follows:


 

Sl. No. 

Description of Documents 

Date of Execution 

Amount (In lacs) 

Signature/Remarks 

 

 

1. 

Copy of Deed of Partnership 

29.1.1994 

--  

--  

 

2. 

Loan Application of Bajrang Enterprises 

2.1.1994 

30.00 (C.C) 10.00(B.G) 

Def. Nos. 2 and 3 for Def. No. 1. 

 

3. 

Sanctioned Letter 

26.4.1994 

18.50 (C.C) 4.50 (O.D) B/D 

Senior Manager 

 

4. 

Acknowledgement and acceptance of terms and conditions 

29.4.1994 

-- do--  

Def. Nos. 2 and 3 for Def. No. 1. 

 

5. 

Demand Promissory Note 

9.5.1994 

23.00 

-- do--  

 

6. 

A letter accepting interest rate, terms and conditions 

9.5.1994 

23.00 

-- do--  

 

7. 

Letter regarding waivement of presentation of Pronote 

9.5.1994 

23.00 

-- do--  

 

8. 

Letter to maintain 25% margin of stock and 50% on Book Debts 

29.4.1994 

Nil 

-do- 

 

9. 

Hypothecation Agreement 

29.4.1994 

23.00 

- do- 

 

10. 

Hypothecation-Assignments of Book Debts 

6.5.1994 

4.50 

- do- 

 

11. 

Personal Guarantee Agreement 

6.5.1994 

23.00 

Def. No. 2. 

 

12. 

Personal Guarantee Agreement 

6.5.1994 

23.00 

Def. No. 3. 

 

13. 

Sale Deed No. 183 in favour of Rani Singh 

5.1.1989 

Rani Singh (Def, No. 3)-Purchaser 

 

14. 

Agreement to create mortgage in aforesaid property of Rani Singh. 

6.5.1994 

23.00 

Def. No. 3. 

 

15. 

Sale Deed No. 7202 in favour of Asha Singh 

23.6.1990 

Def. No. 4. 

 

16. 

Agreement to Mortgage by Guarantor 

6.5.1994 

23.00 

Def. No. 4. 

 

17. 

Application for enhancement of loan 

20.2.1995 

50.00 (C.C) 14.00 (B.D) 

Def.Nos.2 and 3 for Def. No. 1. 

 

18. 

Sanction Letter 

2.5.1995 

42.00 (C.C) 10.00 (O.D) 25.00 (B.G) 

Manager 

 

19. 

Acknowledgement and acceptance of terms and conditions 

2.5.1995 

-- --  

Def. Nos. 2 and 3 for Def. No. 1. 

 

20. 

Demand Promissory Note 

3.6.1995 

50.00 

Def. Nos. 2 and 3 for Def. No. 1. 

 

21. 

Letter accepting interest and terms and conditions 

3.6.1995 

52.00 

-- do--  

 

22. 

Letter agreeing to maintain 25% margin money on stock...

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