O.A. No. 2357 of 2000. Case: Indian Overseas Bank Vs Parikh Brothers and Ors.. Mumbai Debt Recovery Tribunals
| Case Number | O.A. No. 2357 of 2000 |
| Counsel | For Appellant: Rajesh Nagori, Adv., i/b., Pandya Gandhi & Co. and For Respondents: P.N. Ganwani, Adv., i/b., R.M. Vanoo, Adv. and R.M. Vanoo, Adv. |
| Judges | K.J. Paratwar, Presiding Officer |
| Issue | FADAI Rules |
| Citation | IV (2006) BC 187 |
| Judgement Date | Monday July 10, 2006 |
| Court | Mumbai Debt Recovery Tribunals |
Judgment:
K.J. Paratwar, Presiding Officer
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This is an application for recovery of following amounts with interest @18% p.a. from the date of filing the Original Application till full realization:
-- Rs. 96,87,108.28 being dues under Packing Credit Facility;
-- Rs. 5,08,461.67 being dues under Cash Credit Facility;
-- Rs. 6,78,200.48 being dues under FPC Cancellation Charges.
A sum of Rs. 5,32,456/- deposited by Bank of India [BOI] and lying with the applicant Bank in Suspense Account is sought to be appropriated towards the applicant's claim of Packing Credit Facility. The declaration that the outstandings are secured by charge over certain flats is also sought.
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The borrower [defendant No. 1] is a Partnership Firm of which defendant Nos. 2 and 3 are partners and also sued as pledgors of the two L.I.C. Policies. The defendant Nos. 4 to 6 are sued as Mortgagors from amongst whom defendant No. 6 is also sued as pledgor of one L.I.C. Policy. The defendant No. 7 was added as party after filing of the O.A. However the O.A. against it is unconditionally withdrawn on the Bank''s receiving Rs. 29,42,207/- towards full and final settlement of the claim.
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The applicant's case is that in or about December 1978, it had at the request of defendant Nos. 1 to 3 granted Packing Credit (P.C.) Facility to the extent of Rs. 50 lacs in lieu of which they executed in the Bank's favour Demand Promissory Note and agreement. Earlier on 9.10.1978, defendant Nos. 2, 3 and 6 had pledged L.I.C. Policies of Rs. 1.65 lacs, Rs. 1.10 lacs and Rs. 65,000/- respectively. The Bank disbursed the amount of P.C. Facility and debited the sum in the account. By letter dated 19.9.1980, applicant informed defendant Nos. 1 to 3 that as on 30.6.1980 a sum of Rs. 60.67,457.83 was due in respect of P.C. Facility. The defendant Nos. 1 to 3 have duly confirmed and acknowledged the correctness thereof at the foot of the letter. However, despite repeated demands by the applicant, defendant Nos. 1 to 3 failed and neglected to pay the amount.
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On or about 12.11.1980, the applicant with the consent of defendant Nos. 1 to 3 sold hypothecated stock of chily powder lying at Tuticorin Port to one Jaiswal Traders and Chemicals for Rs. 1 lac of which amount due credit was given.
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In December 1981, defendant Nos. 1 to 3 represented to the applicant that they had obtained an order for Rs. 22 crores for export of rice to Rumania and that the BOI had agreed to give P.C. Facility and Local L/C Facilities for Rs. 25 lacs and Rs. 1 crore respectively. The defendant Nos. 1 to 3 also represented that BOI will issue irrevocable letter in favour of the applicant to deduct 2% from every negotiated draft and pay the same to the applicant towards outstandings in the P.C. Account. The BOI gave according letter dated 19.12.1981. The BOI by letter dated 3.1.1983 forwarded to the applicant pay order for Rs. 5,32,456/- on condition that the Bank shall keep the amount in suspense account until the matter is amicably settled.
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By letter dated 9.9.1982, defendants expressed their desire to fulfil obligation and settle the matter amicably with co-operation of the Bank and requested it to write off all interest and accept Rs. 30 lacs by way of settlement. The Bank however declined to accede to the request. Despite demands, the defendant Nos. 1 to 3 failed and neglected, to clear the outstandings under P.C. Facility with accrued interest which amount is claimed in the Original Application.
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Earlier, i.e. on 6.2.1976, the applicant at the request of defendant Nos. 1 to 3 had granted Cash Credit Facility of Rs. 75,000/- in respect of which they (defendant Nos. 1 to 3) had executed Demand Promissory Note. The security of FDR of Rs. 1 lac was given which amount with accrued interest became Rs. 2,28,598.63 for which due credit was given by the Bank after which sum as claimed in the O.A. has remained due.
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The applicant's averment under 3rd claim is that it is member of Foreign Exchange Dealers Association of India and is authorised dealer in Foreign Exchange. The dealings in respect of which are done in conformity with FADAI Rules. The applicant at the request of defendant Nos. 1 to 3 had between 26.6.1978 and 12.1.1979 entered into following five contracts of sale of diverse amount of foreign exchange:
Contract Date of Date of Amount of Amount ofNo. Contract Maturity contract in FPCU.S. $ cancelled_____________________________________________________________________FPC 28.6.1978 27.7.1978 $2,77,200/- 53,474.5817/78FPC 16.8.1978 15.10.1978 $3,60,000/- 1,20,000.0016/78FPC 16.8.1978 15.11.1978 $3,60,000/- 3, 60,000.0017/78FPC 16.8.1978 15.10.1978 $3,60,000/- 3, 60,000.0018/78FPC 12.1.1979 11.2.1979 $31,67,000/- 31,67,000.003/79_____________________________________________________________________The defendant Nos. 1 to 3 failed and neglected to make any delivery of the contracts which were cancelled. As a result...
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