O.A. No. 137 of 2005. Case: Sicom Limited Vs Dinesh Baburao More and Anr.. Mumbai Debt Recovery Tribunals

Case NumberO.A. No. 137 of 2005
CounselFor Appellant: Prakash Panjabi and Barsha Parulekar, Advs., i/b., Prakash Panjabi and Co. and For Respondents: Bhagyashri Jakhade, Adv.
JudgesK.J. Paratwar, Presiding Officer
IssueState Financial Corporation Act, 1951 - Section 29; Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Sections 2 and 34(2)
Citation(2006) IV BC 126
Judgement DateJuly 25, 2006
CourtMumbai Debt Recovery Tribunals


K.J. Paratwar, Presiding Officer

  1. The guarantors are sued in this Original Application (O.A.) for recovery of Rs. 2,97,00,527/- with interest @20.5% p.a. with quarterly rests from the date of filing the original application till full realization. They are promoter-Directors of Dinesh Agro Products Limited, the Borrower.

  2. The applicant's case is that on or about 12.4.1996, it had sanctioned financial assistance to the borrower company to the extent of Rs. 75 lakh for its project at Village Kule, Taluka Mulshi, District Pune by subscribing to 7,50,00 equity shares of Rs. 10/- each on certain terms and conditions. The conditions inter alia were that the defendants would buy back the shares at the rate calculated in particular manner at the end of 3rd year from the date of allotment. The defendants executed agreement of Indemnity/Guarantee dated 12.4.1996 favouring the applicant whereunder they under inter alia agreed to repurchase the shares and failing which they shall pay for loss and/or price of the shares with interest.

  3. The shares were allotted on 25.7.1996 and were due for repurchase by the defendants on 25.7.1999. The applicant had accordingly by letter dated 21.6.1999 called upon the defendants to repurchase the shares by paying Rs. 1,44,38,033/-. The borrower company through defendant No. 1, its Managing Director informed the applicant that since the commercial production of the company started in April 1999 due date for buy back of the shares is May, 2004. The company therefore and also because it was not in a position to buy back the shares, requested the applicant to hold till May 2004. By reply dated 12.7.1999, the applicant refuted the company's aforesaid contentions. The defendant No. 2 visited the applicant's office on 21.7.1999 and agreed to give in written schedule for by back of the shares. Since, however, that was not done the applicant vide letter dated 5.10.1999 and dated 14.1.2000 requested the defendants to give specific schedule for buy back. The defendants however failed in giving the same. Ultimately, the applicant vide notice dated 18.8.2000 called upon the defendants to pay the dues together with interest. By reply vide letter dated 15.9.2000, the company informed the applicant that it was in negotiations with foreign buyer for repurchasing said shares and once again requested the applicant for additional time of 6 months. The applicant by reply dated 25.10.2000 informed that it cannot consider the request and also informed that it will be constrained to take legal action.

  4. The applicant however could not sale the shares in open market as they were not listed on any stock exchange. It had therefore by notice dated 30.5.2001 again called upon the defendant to pay to the applicant the then dues of Rs. 1,95,92,024/-with interest. By letter dated 12.6.2001, the company through defendant No. 2 requested the applicant for further time of 6 months during which period it promised to submit concrete proposal for buy back of the shares. The applicant took symbolic possession on 14.6.2001 under Section 29 of State Financial Corporation Act, 1951 (SFCs Act) of the mortgaged property bearing Survey No. 205, C.T.S. No. 10389/ 290 and 290-A, Final Plot No. 37, admeasuring 623.7 sq. mtrs. bearing Municipal House Nos. 217 and 37/290, Solapur as there were some tenants.

  5. Ultimately, in the discussions the defendants agreed to by...

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