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Case: North Eastern Development Finance Corporation Ltd. Vs Jyoti Fruits and Vegetable Products and Anr.. Guwahati Debt Recovery Tribunals

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Party Name:North Eastern Development Finance Corporation Ltd. Vs Jyoti Fruits and Vegetable Products and Anr.
Judges:Md. A. Khalique, Presiding Officer
Issue:Banking Law
Judgement Date:June 22, 2005
Court:Guwahati Debt Recovery Tribunals

Judgment:

Md. A. Khalique, Presiding Officer

  1. The applicant has filed the claim to recover Rs. 15,77,530/- from the defendants stating inter alia that the defendant No.1 is a proprietorial firm of which defendant No.2 is the sole proprietor who approached the applicant for financial assistance of Rs. 9 lacs under Project Finance Scheme and Rs. 3,75,000/- under the NEEF Soft Loan Scheme and the applicant by its letter of intent dated 15th August, 2000 informed the defendant its readiness to sanction the required loan informing him the terms and conditions to be fulfilled. Defendant No.2 on behalf of defendant No.1 accepted the terms and conditions and acknowledged the sanction accorded by the applicant. Defendant No.2 executed the loan agreement on 25th August, 2000, deed of hypothecation hypothecating the whole of the movable properties of the defendant No. 1 including its movable plants and machineries etc. and also created equitable mortgage as collateral security over his landed property described in Schedule 'A' of the application in favour of the applicant by deposit of title deed. Term loan of Rs. 9,00,000/- carries interest at the rate of 15.5% p.a. while soft loan of Rs. 3,75,000/- carries interest at the rate of 1.5% p.a. payable quarterly. Defendants availed the loan but failed to repay the installments towards repayment of loan as a result the applicant issued letters on various dates demanding repayment of loan amount with interest. Defendants did not respond, as a result the applicant had to send recall notice and despite such notice defendants failed to comply. The statement of account maintained by the applicant in the usual and ordinary course of business and the outstanding balance in respect of both the loans stood at Rs. 15,77,530/-. The applicant has prayed for issuance of certificate to recover the said amount with pendente lite interest and cost of the application. The applicant has also sought the relief of attachment and sale of hypothecated and mortgaged properties and to appropriate the proceeds thereof towards liquidation of its claim.

  2. The defendants contested the application by filing written statement taking the plea that on perusal of the project reports submitted, the applicant decided to advance loan and in response the defendant No.2 had executed relevant loan documents but no amount of loan was ever disbursed to the defendants. Accordingly, the defendants' plea is that there was no cause of action...

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