O.A. No. 224 of 2001. Case: UCO Bank Vs Virgo Steels and Ors.. Kolkatta Debt Recovery Tribunals

Case Number:O.A. No. 224 of 2001
Party Name:UCO Bank Vs Virgo Steels and Ors.
Counsel:For Appellant: Ismail Nasikwala, Adv., i/b., K.N. Bhandary, Adv. and For Respondents: Rishabh Shah, Adv., i/b., Dhruv Liladhar & Co. for Defendant Nos. 1, 5 and L.Rs. of defendant No. 6
Judges:K.J. Paratwar, Presiding Officer
Issue:Limitation Act, 1963 - Schedule - Articles 23 and 136
Citation:IV (2005) BC 13
Judgement Date:March 21, 2005
Court:Kolkatta Debt Recovery Tribunals
 
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Judgment:

K.J. Paratwar, Presiding Officer

  1. This is an application for recovery of:

    Rs. 4,39,43,054/- being dues under Packing Credit Facility with interest @ 25% p.a. from the date of filing the Original Application till full realization;

    Rs. 8,54,21,279/- being dues under Letter of Credit Facility with interest @ 31% p.a. from the date of filing the Original Application till full realization;

    Rs. 2,59,088.64 being dues under Overdraft Facility with interest as above.

  2. The 4th claim of Rs. 1,17,43,112/- introduced by order dated 14.3.2005 has arisen pursuant to the payment made by the Bank on 27.7.1999 as per order/decree dated 19/ 20.4.1999 passed by High Court of Judicature at Bombay in Special Civil Suit No. 14 of 1996.

  3. A sum of Rs. 5,10,09,258/- has been received being sale proceeds of hypothecated goods/credited towards FDR proceeds during the pendency of the O.A.

  4. The defendant Nos. 2 to 4 and 7 would be accordingly referred, for the sake of convenience, even while they are insolvent, Official Assignee having been appointed.

  5. Defendant Nos. 2 and 3 carried on business as importers and dealers in steel in the name of defendant No. 1. The defendant No. 4 is brother of defendant Nos. 2 and 3 while defendant No. 5 is defendant No. 4's wife. The defendant. Nos. 4 and 5 have been sued merely as mortgagors of certain properties at New Panwel and Vashi. Late defendant No. 6 was mother of defendant Nos. 2 to 4 and was also sued as the mortgagor. The defendant No. 7 is nephew of defendant Nos. 2 to 4 and also sued merely as mortgagor.

  6. The applicant's case is that on or about 21.6.1988, defendant Nos. 1 to 3 requested the applicant for grant of Packing Credit facility in respect of their tenders to the Associated Cement Companies Limited (ACC) for their Shahbad Project and Tamilnadu Water Supply and Drainage Board, (the TWAD Board) for supply of MS Pipes of various diameters for their various drainage projects located in Coimbatore District and other deemed export supply contracts. The Packing Credit (PC) facility was sanctioned to the extent of Rs. 300 lacs. The defendant Nos. I to 3 had also requested for the guarantee facility in which however there are no outstandings. Apart from above, letter of credit, inland and foreign, facility was sanctioned to the extent of Rs. 425 lacs. The defendant Nos. 1 to 3 executed Demand Promissory Note and other usual security documents. The security was of Equitable Mortgage, by deposit of title deeds, of their properties by defendant Nos. 4 to 7. Under the Packing Credit, the defendant Nos. 1 to 3, requested at ten times for loan of Rs. 50 lacs.

  7. The applicant sanctioned and disbursed the loans. The defendants made certain payments after consideration of which claimed amount in the O.A. is outstandings.

  8. The applicant has in Para No. 32, then given details of guarantees given at the defendant Nos. 1 to 3's request to the TWAD Board. But, the guarantees are not invoked which is why there is no claim under this facility.

  9. The applicant has averred in para No. 34 that it issued at the instance of defendant Nos. 1 to 3 the L/Cs as below:

    Sl. No. of Date of Name of Amount No. L/C. L/C. Beneficiary. 1. IN/40473 30.8.1990 M/s. Krupp Handle DM Gmbh. 14,45,250 2. IN/40475 -do- -do- 14,45,250 3. IN/40605 22.2.1991 Euro Asia Exports US Dollars CN 9,18,000 4. IN/40606 25.2.1991 -do- 9,27,000

    The beneficiaries of the L/Cs presented documents and since they were in the order, the Bank was required to make payment. The defendant Nos. 1 to 3 however did not...

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