O.A. No. 1038 of 2000. Case: Central Bank of India Vs Seema Synthetics Fabrics Pvt. Ltd. and Ors.. Mumbai Debt Recovery Tribunals
|Case Number:||O.A. No. 1038 of 2000|
|Party Name:||Central Bank of India Vs Seema Synthetics Fabrics Pvt. Ltd. and Ors.|
|Counsel:||For Appellant: G.R. Kinkhabwala, Adv., i/b., M.S. Bodhanwala & Co. and For Respondents: N.R. Engineer, Adv., i/b., K.S. Jain, Adv.|
|Judges:||K.J. Paratwar, Presiding Officer|
|Issue:||Limitation Act, 1963 - Section 19 - Schedule - Articles 31 and 55|
|Citation:||III (2006) BC 219|
|Judgement Date:||June 07, 2006|
|Court:||Mumbai Debt Recovery Tribunals|
K.J. Paratwar, Presiding Officer
This is as application for recovery of Rs. 14,14,850/- being dues under Bills Purchase Facility with interest @ 18.5% p.a. with quarterly rests from the date of filing the original application till full realization.
The Borrower (defendant No. 1) is a company of which defendant Nos. 2 and 3 arc Directors but sued as guarantors.
In or about February, 1998, on the request of defendant No. 1 the applicant continued to grant bills purchase facility up to Rs. 5 lakh in lieu of which defendant No. 1 executed demand promissory note and agreement regarding bill purchase. The facility was granted against surety of defendant Nos. 2 and 3 who had given letter of guarantee. Under the facility, the applicant purchased from time to time 16 bills aggregating Rs. 3,52,656/-. On its inability to clear the outstanding, it had executed letter of acknowledgement on 30.9.1990. On 20.3.1993, a sum of Rs. 26,150/- was paid. The Borrower however did not subsequently make any payment. The guarantors also did not pay after the guarantee was invoked there by necessitating tiling of this application.
The defendants in their common written statement (Exh. 9) have at the outset raised the plea of limitation. They have however not denied the a ailment of the facility. They have also not dented the amount of the bills purchased. The execution of letter of guarantee is also not disputed. But, the execution of letter of acknowledgement dated 5.10.1990 is denied. They have contended that the bills were secured by the goods covered by the lorry receipts. The Borrower wrongfully with hold the lorry receipts and did not hand over them to the defendant No. 1. The goods covered by the lorry receipts were as such lost. Even then, the defendants had shown readiness to clear the outstanding but without interest which was accepted by the Bank. It was agreed, that the defendant No. 1 shall make payment 'billwise' to the Bank of the amount of the bill against whom the Bank would release the documents. This, according to the defendants, constitutes novation of contract whereupon the Bank cannot fall back on the original contract. As such, the defendant No. 1 by letter dated 11.3.1993 tendered pay order dated 12.3.1993 of Rs. 26,150/- with a request to release the transport documents pertaining to bill dated 2.2.1998 for the even amount but the Bank did not release the lorry receipts. The liability is dishonored on the aforesaid...
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