O.A. No. 1721 of 1999. Case: Central Bank of India Vs The Official Liquidator, High Court and Ors.. Mumbai Debt Recovery Tribunals
| Case Number | O.A. No. 1721 of 1999 |
| Counsel | For Appellant: Rishabh Shah, Adv., i/b., Dhruv Liladhar and Co. and For Respondents: N.M. Nair, representative of Official Liquidator for Respondent No. 1, Devendra Sharma, Adv. for Respondent Nos. 2 and 3 and K.R. Shekhawat, Adv. for respondent No. 4 |
| Judges | K.J. Paratwar, Presiding Officer |
| Issue | Limitation Act; Recovery of Debts Due to Banks Act |
| Citation | I (2006) BC 79 |
| Judgement Date | March 22, 2005 |
| Court | Mumbai Debt Recovery Tribunals |
Judgment:
K.J. Paratwar, Presiding Officer
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This is an application for recovery of:
Rs. 1,55,58,120/- being dues under cash credit facility with interest @ 20.75% p.a. from the date of filing the original application till full realization.
Rs. 32,64,671/- being dues under overdraft facility with interest as above.
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The borrower company (defendant No. 1) is in liquidation but for the sake of convenience I shall refer it as the borrower or defendant No. 1. The defendant Nos. 2 and 3 are guarantors. The defendant No. 4 is sued as illegal occupant of mortgaged property.
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The defendant No. 1 is the applicant's constituent since July 1981 enjoying certain credit facilities which were renewed from time to time. On or about 31.8.1994, the facilities were Cash Credit (Hypothecation) facility of Rs. 80 lacs and overdraft of Rs. 20 lacs. The said facilities were subsequently renewed. The borrower and the guarantors had from time to time executed usual security documents, letters of guarantee. The further security was of Equitable Mortgage, by deposit of title deeds of Property being Unit No. 319, 3rd Floor, Kewal Industrial Estate, Senapati Bapat Marg, Lower Parel, Bombay- 400 013 contained an agreement of sale dated 18.3.1974 between Kewal Builders Pvt. Ltd. and one Shardaben V. Doshi endorsed in the defendant No. 1's favour on 2.8.1978. Sometime in 1995, the defendant No.l sought modification of equitable mortgage by Unit No. 105, A/3, Dhanraj Industrial Estate; Lower Parel, Bombay-400013 (registered office of defendant No. 1) owned by M/s. Asian Plast, an associate concern of the defendant No. 1, in the place of the property earlier mortgaged. The applicant was agreeable to the modification provided Equitable Mortgage of new property at Dhanraj Industrial Estate created but the defendant No. 1 failed in complying the same.
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The defendant No. 1 had availed of the loan/credit facilities. On failure to pay the outstandings, acknowledgements of indebtedness was given on 4.3.1996.
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Sometime in 1998, the applicant came to know that the defendant No. 4 was occupying the property. The applicant's officer therefore visited the property and was told by defendant No. 4; that in the negotiations in 1990, the defendant No. 1 had told that the property was free from encumbrance; that after negotiation the agreement for sale was executed on 25.12.1990. At the time of purchase the defendant No.l had written to Kewal Industrial Estate and Kewal Builders Pvt. Ltd. about the sale of the property and for transfer of the same and also of original agreement of sale in favour of defendant No. 4. The Kewal Builders Pvt. Ltd. accepted cheque of Rs. 19,375/- being transfer charges from defendant No. 4 which is why implied consent for the transfer was given. The applicant contends that the transfer was fraudulent. In the O.A. reference to copious correspondence between the parties is made of which resume is unnecessary. Suffice it to say that the O.A. is sought to be allowed in respect of monetary claim as also with reference to mortgaged properties.
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The Official Liquidator of defendant No.l did not file written statement.
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The defendant Nos. 1 to 3 filed common written statement at Exh.18. Since however Official Liquidator has been appointed of defendant. No. 1, the same can be treated to be of defendant Nos. 2 and 3. The O.A. is said to be barred by limitation. The defendant Nos. 2 and 3 did not seem to seriously deny that they stood as guarantors. They have however denied the calculations. The execution of acknowledgements of debt on the purported date is denied. There is no other specific defence in the lengthy written statement.
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The defendant No. 4 in written statement at Exh. 12 have initially taken up more or less same contentions. But, his written statement so far as the...
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