O.A. No. 22 of 2004. Case: UCO Bank Vs Sambhu Nath Dutta. Kolkatta Debt Recovery Tribunals

Case NumberO.A. No. 22 of 2004
CounselFor Appellant: Sanjukta Roy, Adv. and For Respondents: Swapan Kumar Chatterjee, Adv.
JudgesD.C. Thakur, Presiding Officer
IssueSecuritisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(2), 19(1), 19(20), 19(22) and 22(2); Transfer of Properties Act, 1882 - Section 58; Recovery of Debts Due to Banks and Financial Institutions Act, 1993; Code of Civil Procedure, 1908 (CPC) - Section 34 - Order 9, Rule 13 - Order 8,...
CitationIV (2006) BC 247
Judgement DateMarch 31, 2006
CourtKolkatta Debt Recovery Tribunals


D.C. Thakur, Presiding Officer

  1. Prior to initiating the discussion, this Tribunal intends to say specifically that the entire situation emergent before itself has been absolutely an ex parte one. Before elucidating what the Tribunal should do in an ex parte situation, it intends to refer to the claim application of the Bank which has been in fact meant for the recovery certificate to be issued for an amount of Rs. 24,60,095.87 against the defendant together with interest i.e. 14% p.a.

  2. For the recovery of the said amount from the said defendant, the applicant Bank has started its legal action on and from Friday, May 14,2004. Be it noted here necessarily the said Bank has also afforded to recover the said amount from the above named defendant by way of statutorily issuing one notice upon the said defendant as the 'borrower' under the provisions of Sub-section (2) of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [Act No. LIV of 2002]; about which the applicant Bank has made mention at paragraph No. X, page 8 of its above claim application.

  3. The sole defendant is the proprietor of M/s. Ganapati Agency; under the name and style of the said proprietorship concern, the said defendant used to carry on the wholesale distributorship business of the different types consumer products. For the very reason of carrying out the distributorship business in the field of the consumer products, the said defendant did approach on April 26, 2001 to the Bank for the sanctioning of the cash credit facility to the limit of Rs. 20 lacs to himself. The said a approach was also effectively responded to by the Bank through its sanction letter bearing No. WBR-1/CAD/PROP/86/2001 dated May 11/14, 2005 issued by the Kolkata Regional Office, Kolkata-700 001; and it was evidently proved to be received by the said defendant as the proprietor of M/s. Ganapati Agency otherwise the seal of the said agency would not have been present in the above letter of sanction. The said letter was received by the said defendant at the address mentioned in D1 /1, Amarabati More, Sodepur, 24 Parganas (N), Pin: 743 178. In the said letter, the applicant Bank has inter alia imposed the two conditions namely the hypothecation of stocks as well as the rate of interest @ 15% p.a. plus interest tax, if any, or at such other rate as may be prescribed by HO/RBI from time-to-time. The letter containing the preliminary condition usually necessary for the contract was reached prior to May 17,2001 when the said defendant executed at the aforementioned address one Demand Promissory Note in the Bank's available form A/1. The signature of the said defendant, while accepting the above letter of sanction, resembles even through the naked eye with the signature of the executor, who is none but the defendant himself. On the said date, the said defendant has also executed the four documents.

    As mentioned earlier, all the formalities necessary for the functioning of the above commercial contract in the form of the enjoyment of the cash credit facility by the said defendant had been evidently completed on May 17, 2001. Thereafter, the defendant was permitted to enjoy the above facility. It should necessarily be mentioned that as a result of the construction of the documents from the angle of purpose to be fulfilled and performed by the letter of guarantee, the character of a continuing personal guarantee shall also be necessarily and unavoidably attributed to the said defendant. If the letter of guarantee is read as a whole and is read when the dc Vndant is not illiterate and is able much to understand the impact of the terms and conditions to be stipulated in the said letter of guarantee upon himself, especially after the execution of the same, the said defendant shall necessarily be designated as the holder of the two-fold character namely the borrower and the guarantor. In other words, the character of the borrower-guarantor may be found in the same person named Mr. Shambhu Nath Dutta, the...

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