O.A. No. 48 of 2002. Case: Bank of India Vs Kailash Steel 'O' Fab., Proprietary Firm and Anr.. Nagpur Debt Recovery Tribunals

Case Number:O.A. No. 48 of 2002
Party Name:Bank of India Vs Kailash Steel 'O' Fab., Proprietary Firm and Anr.
Counsel:For Appellant: A.S. Chandurkar, Adv. and For Respondents: S.S. Godbole, Adv. for Mundra, Adv.
Judges:K.J. Paratwar, Presiding Officer
Issue:Contract Act, 1872 - Section 74
Citation:II (2005) BC 253
Judgement Date:April 08, 2005
Court:Nagpur Debt Recovery Tribunals

Judgment:

K.J. Paratwar, Presiding Officer

  1. In this application for recovery of Rs. 15,14.150/- with interest there is counter claim of Rs. 10 lakhs.

  2. The defendant No. 2 is proprietor of 1st defendant who (D1) is not a legal person and merely trade name.

  3. The short case of the applicant is that on or about 26th August, 1996 Term loan of Rs. 7.5 lakhs, Soft loan of Rs. 2.49 lakhs and Cash Credit limit of Rs. 2.31 lakhs were sanctioned to the defendant against security of equitable mortgage by deposit of title deeds of his property. The term was repayable in 26 quarterly instalments. The defendant availed of the loan and Cash Credit facility. On inability to clear the outstandings, acknowledgement of debt and securities was executed on 28.9.99 in respect of the outstandings under Term loan and C.C. Limit. The defendant, however, did not repay the outstandings even thereafter and despite demands. Therefore, this O.A.

  4. In the written statement cum counter claim (Ex. 7), the defendant has admitted availment of the loans and Cash Credit facility from the applicant. He has, however, stated that the application for loan/credit facility was routed through District Industries Centre (DIC), Bhandara which is the fact. The contentions that the signatures were taken on the documents when they were blank, that the O.A. is barred by limitation are apparently taken only for the purpose of taking and are not pressed into service at the time of hearing. The interest rate is also said to have been not applied as per RBI guidelines. The contention is that as per the sanction letter repayment was to start after 9 months (3 quarters) of disbursement of the loan/credit facilities. The last instalment of the term loan was disbursed on 2.11.98 and as such the repayment should have started from 1.8.99. But, the applicant deducted Rs. 36,561/- on 30.6.98 itself and the total amount deducted before the end of the moratorium period was Rs. 1,05,989/-. The defendant, therefore, did not get adequate working capital which is why the manufacturing of spare parts of bicycle for which the loan/ credit facilities were obtained could not start. The defendant No. 1 became financially sick and the defendant suffered loss to the tune of Rs. 10 lakhs. The defendant had repeatedly requested the applicant also in the meetings with DIG to release the prematurely withdrawn instalments. But, the Bank merely gave promises and did not pay any heed. Therefore, the counter claim...

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