PADUKA SHOES P LTD Vs. BANK OF BARODA
LAWS(DR)-2003-9-11
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on September 10,2003

Appellant
VERSUS
Respondents

JUDGEMENT

A.Subbulakshmy, - (1.)THE appeal is directed as against the order passed by the PO, DRT-II, Channai in IA-375/2001. THE defendents filed this petition for impleading Export Credit Guarantee Corporation (ECGC) as a necessary party in the OA.
(2.)It is the case of the defendant that since the policy has been taken from ECGC at the request of the Bank for availing packing credit and foreign bills purchase, the ECGC is a necessary party to the proceedings.
The Counsel for the appellants submits that ECGC policy is between ECGC and the borrower. She further submits that there is a condition even in the sanction letter that for availing this packing credit (hypothecation) facility, policy should be taken from ECGC and ECGC should be made as a necessary party to this proceeding. She further says that there is a tripartite agreement arrangement between the parties the borrower, ECGC and the Bank.

(3.)THE Counsel for the respondent Bank submitted that ECGC is not all a necessary party to the proceedings before the DRT since there is no privity of contract between the ECGC and borrower. Counsel for the respondent Bank and Counsel for the ECGC further submitted that there is an agreement between ECGC and the Bank and the agreement is to the effect that only if the applicant Bank is not able to realise any amount from the defendant, the ECGC will pay some amount to the Bank and the ECGC is not at all a necessary party to the proceedings before the DRT. Counsel for the respondent Bank further submitted that if the ECGC pays amount to the Bank, the Bank will have to recover the amount from the defendant and pay to ECGC and ECGC cannot directly recover from the defendant and the question of debt also will not arise in the case of ECGC and ECGC is not all a necessary party to the proceedings.


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