O.A. No. 128 of 2002. Case: UCO Bank Vs Gammon India Ltd.. Mumbai Debt Recovery Tribunals
| Case Number | O.A. No. 128 of 2002 |
| Counsel | For Appellant: H.P. Bharadwaj, Adv., i/b., Bharadwaj & Asso. and For Respondents: Shekhar Shetye, Adv., i/b., Desai and Chinoy |
| Judges | K.J. Paratwar, Presiding Officer |
| Issue | Limitation Act, 1963 - Schedule - Articles 28, 55 and 113; Consumer Protection Act |
| Citation | IV (2005) BC 67 |
| Judgement Date | March 09, 2005 |
| Court | Mumbai Debt Recovery Tribunals |
Judgment:
K.J. Paratwar, Presiding Officer
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This is an application for recovery of U.S. $ 4,64,920.94 with interest @ 1% p.a. over the London Inter-Bank rate on the loan of U.S. $3.5 lacs from the date of filing the Original Application till full realization.
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It is necessary to know following facts for understanding the dispute between the parties:
The defendant had participated in the Equity Share Capital of a Joint Venture Project by setting up Company in Dubai (UAE) called Gammon Mid-East Ltd. for business of Civil/ Mechanical Engineer and Contractors, Builders, Developers, Designers, etc. The defendant had applied to the applicant for loan of US $ 3,50,000/- for the purpose of construction activities to be undertaken by Gammon Mid-East Ltd. The applicant gave in principal sanction to the loan subject to the defendant getting requisite permission from the Government of India (GOI) and Reserve Bank of India (RBI). The loan was to be disbursed by the applicant's London office on the defendant's depositing with the Bank's Nariman Point Branch Counter-party Rupee Fund equivalent to 100% of the loan in the from of Fixed Deposit (FD) duly discharged in favour of the applicant. The defendant accordingly obtained necessary permissions. In lieu of the loan, the defendant inter alia executed Loan Agreement, Demand Promissory Note and other usual security documents. The loan was disbursed against the defendant's amount in FD in the applicant's Nariman Point Branch. The repayment was to be made at the applicant's London Office from funds generated by Gammon Mid-East Ltd. The first instalment was due on or before 30.6.1978, the last being on 21.6.1981. The defendant did not regularly made the repayments. On its request being accepted by the GOI and RBI, the repayment of the loan was postponed up to June 1985 on fresh terms and conditions which were broadly same. The defendant executed fresh Demand Promissory Note, Letter of Waiver in lieu thereof.
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The defendant had agreed to regularly pay interest every six months, but failed in doing so. The defendant also did not give FD equivalent to 100% of the amount of interest through belatedly some such deposits were made also owing to escalation in the US $ exchange rate. The applicant gave letters/reminders calling upon the defendant to make payment of instalments and/or interest and also calling upon it to apply to RBI for remitting the amount in US $ to the applicant's London Branch equivalent to the proceeds of FDs lying with its Nariman Point Branch. The defendant made certain payments but not as per the agreement. The applicant, therefore, by letter dated 21.1.1986 called upon the defendant to pay the then outstandings of US $ 4.6.1 lacs. The defendant reiterated its commitment but expressed inability to pay the same from the overseas proceeds. On the defendant's request, the applicant by letter dated 24.1.1986 applied to RBI for approval for remittance the then outstandings of US $ 4,60,869.81. The applicant also informed the defendant about the making of such application. The RBI, however, made some queries which were replied after taking information from the defendant, by the Bank. The defendant by letter dated 28.9.1987 requested the applicant to follow up the application with RBI. In reply, the applicant informed that it had already done that. The defendant, however, by letter dated 19.2.1988 unilaterally fixed a final date for remittance (31.3.1988) so as to stop further liability due to accrual of interest and adverse fluctuation in the value of Indian Rupee. The defendant declared that it would not be liable for increase in the liability after 31.3.1988. The RBI was still processing the application. By letter dated 26.8.1988 it had forwarded the Bank's application to GOI. The Bank followed up the matter with GOI.
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Ultimately, RBI by letter dated 6.5.1992 granted to the applicant permission to remit to its London Branch US $ 3,50,000/- representing loan amount plus interest accrued thereon as on the date of remittance out of the rupee deposit kept by the defendant wish the applicant towards adjustment of foreign currency loan disbursed by the applicant's London Branch to the defendant for use of said Joint Venture. The applicant by letter dated 17.12.1992 requested the RBI to forward to the applicant necessary exchange permit for affecting said remittance. By letter dated 5.1.1993, the RBI called details relating to the...
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