O.A. No. 112 of 2001. Case: State Bank of India Vs Sindichem Limited and Ors.. Nagpur Debt Recovery Tribunals

Case Number:O.A. No. 112 of 2001
Party Name:State Bank of India Vs Sindichem Limited and Ors.
Counsel:For Appellant: G. Abbas, Adv. and For Respondents: B.J. Agrawal, Adv. for Defendant No. 3
Judges:K.J. Paratwar, Presiding Officer
Issue:Banking Law
Citation:I (2006) BC 45
Judgement Date:September 01, 2005
Court:Nagpur Debt Recovery Tribunals
 
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Judgment:

K.J. Paratwar, Presiding Officer

  1. This an application for recovery of Rs. 63,61,132.69 ps. with interest. The applicant has on 15.2.2002 received from O.L. of 1st defendant Rs. 25 lakh from out of sale proceeds of the mortgaged property.

  2. The borrower (Dl) is in liquidation but for sake of convenience is referred to as the borrower or the company. Defendant Nos. 2 and 3 are sued as guarantors.

  3. The applicant's case is that the 1st defendant enjoyed credit facilities from the applicant since 1968. On the 1st defendant's request the applicant renewed, enhanced loan/cash credit facilities from time to time. Lastly, the facilities were as below:

    (i) Medium Term loan - Rs. 8.75 lakh sanctioned in 1981 (ii) Clean Term Loan - Rs. 14.30 lakh sanctioned in 1984 (iii) D.C.C. - Rs. 23 lakh sanctioned in 1984

    The facilities were sanctioned against personal guarantee by deceased defendant No. 2 and defendant No. 3 and mortgage and hypothecation of certain properties which, as indicated earlier, are sold by the O.L.

  4. In lieu of the facilities, the company executed usual security documents and the guarantors gave letters of guarantee. The defendant No. 1 availed of the facilities. On its failure to clear the outstandings, balance confirmation letters, revival letters were executed. The payment was not made even thereafter despite repeated demands and the legal notice which is why this O.A. is filed.

  5. The O.L. in written statement at Ex. 53 has set out facts about its appointment. The O.L. has stated that the record of ROC shows that the applicant is a secured creditor of the company. The averments about sale of the property are then made.

  6. In written statement (Ex. 49) deceased defendant No. 2 and defendant No. 3 have admitted the averments of the loan/credit facilities and signatures on the security documents with rider that the signatures were made as director of 1st defendant. In other words, liability as the guarantors is disputed. The contention is that the applicant did not provide additional finance to generate profit. The company, therefore, ran into losses. In 1984, the applicant agreed to grant finance under nursing programme on experimental basis. The company showed good recovery in 1984-85 and recorded profit. But the applicant abruptly withdrew the finances. The contention is that when the O.L. of Hon'ble High Court of Judicature at Bombay, Bench at Nagpur took possession in 1988, the property of the company was in excess...

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