L. Mohapatra, J. - (1.) TWO writ applications, one at the instance of the Bank of India (W.P.(C) No. 7823 of 2009) and one at the instance of the present review petitioners (W.P.(C) No. 9765 of 2009) were filed challenging the order dated 1.8.2008 passed by the Debts Recovery Appellate Tribunal, at Kolkata in Appeal No. 28 of 2007. Both the writ applications were disposed of by this Court in a common order dated 1.10.2010. Against the said order, the present two review petitions were filed. An application was also filed by the Bank for modification of the said order dated 1.10.2010. By order dated 10.11.2010, the review petitions were disposed of. Challenging the order passed in two review petitions, Civil Appeal Nos. 6002 -6006 of 2011 were filed before the Hon'ble Apex Court and the order passed in the review petitions was set aside and the matter has been remitted back to this Court for hearing of both the review petitions and the application filed by the Bank for modification of the order dated 1.10.2010 afresh. The facts leading to filing of the two review petitions and the application for modification are as follows: - Bank of India filed Original Application No. 26 of 2002 before the Debts Recovery Tribunal, Cuttack seeking for recovery of Rs. 92,63,594/ - with interest at the rate of 16% per annum with quarterly rests, pendent lite and future from the date of the application till the date of realization and costs from all the defendants jointly and severally and from their personal assets. Opposite party no. 2, M/s. Sri Krishna Pipes Ltd. was defendant no. 1 and opposite party nos. 3 and 4 were the defendants 2 and 3 respectively. It was the case of the Bank that defendant no. 2 was the Managing Director and defendants 3 to 5 were the Directors. Defendant no. 6 was the guarantor. On the basis of an application, Bank had sanctioned a cash credit of Rs. 25.00 lakhs against hypothecation of stock, cash credit limit of Rs. 25.00 lakhs against hypothecation book debts, the bank guarantee limit of Rs. 5.00 lakhs and the defendants had agreed to pay interest at 20.25% per annum with quarterly rests. Required agreements were executed with the parties and also O.S.F.C. from whom financial assistance had been taken by the defendants. Petitioner no. 1, who was defendant no. 4, along with defendants 2 and 3 as well as defendant no. 6 placed their L.I.C. policies and petitioner no. 1 also made an equitable mortgage of his landed properties. Subsequently, another request was made for another TOD limit of Rs. 15.00 lakhs and the same was also sanctioned with interest at the rate of 22.25% per annum. The defendants having neglected to pay the dues, the Original Application was filed for realization of the dues as stated earlier. The Debts Recovery Tribunal, Cuttack allowed the Original Application by order dated 19th of April, 2005. It was held that all the defendants are jointly and severally liable to pay a sum of Rs. 92,63,594/ - with interest at the rate of 12% per annum from the date of the application till the date of realization with costs and it was also directed that the Bank is entitled to recover the said amount from the properties given as security. It was also directed that the Bank shall deduct a sum of Rs. 25,25,250/ - with counter interest at the rate of 12% from 1.8.2003 from the certificate amount as the said amount was realised by the Bank towards sale price of the prosperities of defendant no. 1 -company. Challenging the said order of the Debts Recovery Tribunal, an appeal was filed by the present petitioners. In Appeal, the Debts Recovery Appellate Tribunal, Kolkata found that on 2.12.1999 at the time of physical verification of stock the value thereof was assessed at Rs. 74.57 lakhs. Sureties had demanded to reclaim the loan but the Bank failed to keep vigilant eye on the hypothecated stocks. On 3.5.2000 the Industrial Unit of the principal debtor was seized and the Bank took control and custody of the entire stocks of the Industrial Unit and at that point of time valuation was made at Rs. 45 lakhs. The Bank did not sale the stock available with it then also and allowed the value of the stock to deprecate, as a result of which, when the stock seized by the Bank was put to auction, it only fetched Rs. 25,25,250/ -. Due to such latches on the part of the Bank, the Debts Recovery Appellate Tribunal was of the view that the present review petitioners will be discharged from their liabilities arising out of the certificated amount recoverable from them only to the extent of Rs. 49,31,750/ - jointly and/or severally. The order of the Debts Recovery Tribunal, Cuttack was modified accordingly. Challenging the order of the Debts Recovery Appellate Tribunal, two writ applications were filed before this Court, one by the present review petitioners and another by the Bank. Both the writ applications were disposed of in a common judgment. While confirming the order of the Debts Recovery Appellate Tribunal, this Court further found that no document was placed by the Bank before the Debts Recovery Tribunal, Cuttack to show that at any point of time the present review petitioners had stood as guarantors in respect of additional loan granted in favour of the borrower -company to the extent of Rs. 15.00 lakhs and, accordingly, held that the present review petitioners cannot be asked to pay back the said amount of Rs. 15.00 lakhs with interest having not stood as guarantor against the said loan. While concluding, the Court held that all the defendants are liable to pay Rs. 34,31,750/ - jointly and severally whereas defendants 2 and 3 are liable to pay Rs. 15.00 lakhs jointly and severally.
(2.) TWO review petitions were filed on the self same ground. One of the grounds taken in the review petitions is that so far as amount of Rs. 49,31,750/ - is concerned, the review petitioners were discharged from their liabilities and, accordingly, out of Rs. 92,63,594/ - decreed by the Debts Recovery Tribunal, the petitioners could only be liable for payment of Rs. 18.00 lakhs jointly and severally along with other defendants. However, in the judgment passed in the two writ applications, it was observed that all the defendants were liable for payment of Rs. 49,31,750/ - jointly and severally. Therefore, this Court allowed the review petitions to the said extent and disposed of the review petitions. It appears that in the S.L.P. filed against the order passed in two review petitions, it was contended that there has been some error in calculation as well as fixation of liability on the defendants and the petition filed by the Bank for modification had not been disposed of. Accordingly, the Hon'ble Supreme Court remitted the matter back to this Court for hearing.
(3.) AFTER hearing Shri Sanjit Mohanty, learned Senior Counsel appearing for the review petitioners and Shri G.D. Kar, learned counsel appearing for the Bank, we find that the Debts Recovery Tribunal had passed a decree for recovery of Rs. 92,63,594/ - with interest at the rate of 12% per annum from all the defendants jointly and severally and also directed the Bank to deduct a sum of Rs. 25,25,250/ - with counter interest at the rate of 12% per annum from 1.8.2003 from the certificate amount as the said amount was realised by the Bank towards sale price of the properties of defendant no. 1 company. Therefore, the Tribunal was required to issue two certificates, one in favour of the Bank for amount of Rs. 92,63,594/ - and another for deduction of Rs. 25.25.250/ - with counter interest at the rate of 12% per annum from 1.8.2003. This order of the Tribunal was modified by the Debts Recovery Appellate Tribunal. The Debts Recovery Appellate Tribunal found that on 2.12.1999 when physical verification of the stock was made, the value thereof was assessed at Rs. 74.57 lakhs. The petitioners, who stood as guarantors, had placed several demands to reclaim the loan granted in favour of the borrower but the bank did not take any step nor did it keep the stock in good condition. When the Industrial Unit was seized on 3.5.2000, stock was valued at Rs. 45 lakhs. However, though the stock was in the custody of the Bank and there was repeated demand from the side of present petitioners to sell the stock, the bank did not take any step, as a result of which, when the stock was sold in auction, it only fetched Rs. 25.25.250/ -. The Debts Recovery Appellate Tribunal, therefore considering the negligence on the part of the Bank held that though the value of the stock on 2.12.1999 was Rs. 74.57 lakhs, it was sold by the Bank for an amount of Rs. 25,25,250/ - and the Bank neglected in not taking steps for selling the stock in response to the demand made by the present petitioners and, accordingly, the Tribunal deducted Rs. 25,25,250/ - from the actual value of the stock as on 2.12.1999 and found that the present petitioners have to be discharged from their liabilities to the extent of Rs. 49,31,750/ -.;