O.A. No. 62 of 2003. Case: Bank International Indonesia Vs Kanan Ranganathan. Mumbai Debt Recovery Tribunals

Case Number:O.A. No. 62 of 2003
Party Name:Bank International Indonesia Vs Kanan Ranganathan
Counsel:For Appellant: Satish Shetye, Adv., i/b., Kanga and Co. and For Respondents: Arshad Sheikh, Adv., i/b., Sanjay Udeshi and Co.
Judges:K.J. Paratwar, Presiding Officer
Issue:Banking Law
Citation:II (2006) BC 89
Judgement Date:January 17, 2006
Court:Mumbai Debt Recovery Tribunals
 
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Judgment:

K.J. Paratwar, Presiding Officer

  1. This is an application for recovery of Rs. 20,13,017.20 with interest @ 18% p.a. on principal sum of Rs. 13,66,249.15 from the date of filing the original application till full realisation.

  2. The facts of the case, most of which are admitted, are that prior to November 1995 the defendant was working in. 'Credit Lyonnais'. He had availed of housing loan from the employer. By letter dated 19.11.1995, the applicant appointed the defendant as a team leader and relationship Manager in marketing on certain terms and conditions which are not relevant for the purpose of this original application.

  3. As and incident of employment, the applicant took over defendant's outstandings of house loan in the books of Credit Lyonnais which were to the tune of Rs. 15,74,100/- on 12.2.1996. The agreement inter alia provided for discretionary rate of interest @ 2% p.a. or rate to be decided by the applicant from time-to-time. The legal mortgage in the applicant's favour of Flat No. 5, in the building Delana, situated over Plot No. 261-A, Central Avenue, Chembur, Mumbai-400071 was agreed to be created. The term also provided that in the event of defendant being terminated or in the event he ceases to serve the applicant the then balance outstandings should be forthwith payable. The defendant executed demand promissory note and letters of authorisation in the applicant's favour as also power of attorney to create legal mortgage. The defendant paid monthly instalment of Rs. 4,5797- from February 1996 to October 2002.

  4. On 23.12.1999 the applicant terminated, with immediate effect, the defendant's employment, the reasons for which having no bearing in this original application are not stated. The defendant instituted Suit No. 1310 of 2000 in Hon'ble High Court of Judicature at Bombay challenging the termination and restraining the applicant Bank herein from dispossessing him from the flat and from not recovering any amount at a rate higher than the agreed terms under the agreement dated 12.2.1996. The applicant contends that since after the defendant's termination, the transaction became commercial and as such he is liable to pay interest @ 18% p.a. As the defendant did not pay, despite repeated demands, the Bank filed this original application.

  5. The defendant resisted the original application by written statement marked as Exh. 9. As noted earlier, the factual aspects have not been denied. The contentions in the written statement challenging the legality of the termination need not be stated. This O.A. is said to be untenable in view of the orders of Hon'ble High Court of Judicature of Bombay in Notices of Motion in Suit No. 1310 of 2000. It is stated that the defendant has been regularly paying the instalments which is why he is not defaulter and as such there is no debt due. The defendant has stoutly denied that the transaction became commercial and that the applicant is entitled to interest @ 18% p.a. as claimed. The dismissal of the O.A. is sought for on aforesaid grounds.

  6. The evidence in this case comprises claim affidavit of Mr. Zarina Engineer (Exh. 12) on behalf of the Bank and of the defendant at Exh. 31. The documentary evidence comprises Appointment Letter (Exh. 14), Housing Loan Agreement (Exh. 15), Demand Promissory Note (Exh. 18), copies of orders passed by Hon'ble High Court of Judicature at Bombay in Suit No. 1310 of 2000 dated 10.4.2000 (Exh. 23), dated 12.6.2000 (Exh. 24), dated 1.2.2001 (Exh. 25) and Statement of Account (Exh. 26).

  7. The hearing ended with the arguments of learned Counsel representing the rival parties.

  8. The question raised on behalf of the defendant that the amount herein did not become due and as such is not debt has to be first addressed. This question is raised on the backdrop of the defendant's regularly depositing monthly instalments in the applicant Bank even after he ceased to be working with the...

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