O.A. No. 405 of 2001. Case: State Bank of India Vs Madhuri Minerals and Alloys and Anr.. Nagpur Debt Recovery Tribunals

Case NumberO.A. No. 405 of 2001
CounselFor Appellant: S.N. Kumar, Adv. and For Respondents: A.M. Deo, Adv.
JudgesK.J. Paratwar, Presiding Officer
IssueLimitation Act, 1963 - Schedule - Article 55
CitationIII (2005) BC 224
Judgement DateJuly 07, 2005
CourtNagpur Debt Recovery Tribunals


K.J. Paratwar, Presiding Officer

  1. In this application for recovery of Rs. 7,56,400.97 towards Cash Credit facility and of Rs. 4,26,427.46 towards Term Loan facility with interest thereupon, there is counter claim by 1st defendant for Rs. 37,75,140/- with interest thereon. Since the Court-fee on the counter claim is paid on Rs. 10 lakhs, it can be considered for that much amount.

  2. The 1st defendant is the borrower while defendant No. 2 is the guarantor.

  3. The applicant's case is that Cash Credit facility upto Rs. 1.25 lakhs was sanctioned by it to 1st defendant in April,. 1998. At that time Medium term loan for Rs. 3.50 lakhs was also sanetioned. The security for the facility/loan was guarantee by defendant No. 2 and equitable mortgage of 1st defendant's property Bearing Plot No. 68, admeasuring 195.2 sq. mtrs., situated at Mouza-Besa, Khasara No. 22/2, Tahsil and District Nagpur. In lieu thereof, the defendant No. 1 executed in the applicant's favour usual security documents while defendant No. 2 gave letter of guarantee.

  4. In April, 1999 the Cash credit limit was enhanced to Rs. 6 lakhs against the same security and on execution of set of security documents/letter of guarantee, as the case may be. On or about 16th June, 2000 1st defendant deposited title deeds of the aforesaid property in order to create equitable mortgage.

  5. The defendant No. 1 committed defaults and failed in making payment. Therefore, by legal notice dated 21.5.2000, the outstandings were recalled. The 1st defendant gave false reply and did not make payment. Defendant No. 2 pleaded ignorance. The payment did not come forward from either of the defendants. Therefore, this O.A.

  6. Vide written statement (Ex. 12), the defendants denied that they approached the applicant in April, 1998 much less for Cash Credit limit of Rs. 1.25 lakhs. Their contention is that the 1st defendant had submitted loan proposal for Rs. 13.50 lakhs to the Bank in 1997 along with project report. The Bank did not timely consider the application even while the then Manager Mr. Abhyankar was telling that Rs. 13.50 lakhs would be shortly sanctioned. Upon such assurances defendant No. 1 started business. But instead of sanctioning the loan/ facility as sought for, the Bank suo motu in April, 1998 gave C.C. limit of Rs. 1.25 lakhs which facility was availed of with understanding that the amount would be sanctioned within short time. Similarly, the defendant No. 1 had not applied for medium term loan for Rs. 3.50 lakhs. It is also denied that defendant No. 1 again approached the Bank in April, 1999 for enhancement of C.C. Limit to Rs. 6 lakhs. The creation of equitable mortgage on 16th June, 2000 is denied. In this connection it is stated that applicant had vide letter dated 1.3.2000 informed the 1st defendant that the facility to the extent of Rs. 13.50 lakhs were sanctioned and that completion of certain formalities including creation of equitable mortgage was necessary for disbursement of the same. But by that time the business has stopped. The dismissal of the O.A. is sought for on aforesaid grounds.

  7. On 7.8.2002 defendant No. 1 made counter claim (Ex. 22A) on which Court fee was, however, paid on 24.2.2003 on Rs 10 lakhs. The reduction in the counter claim, however, has not been clarified. The...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT