Decided on July 14,2003



D.C.Thakur, - (1.)IN a lawful action for recovery of debt from the six defendants, one of which has been impleaded by the applicant Bank as the necessary defendant because the said defendant has been impleaded in such lawful action as the party in view of being the first charge holder of the mortgage properties of the other defendants by dint of a tripartite agreement entered into between the applicant Bank on the one hand and the other defendants and the said specific defendant on the other, the pertinent issue, arising from the angle of law is: whether the applicant Bank shall be entitled to any relief against the said specific defendant. Such peculiar affair has arisen in respect of one Section 19 application preferred by the applicant Bank on February 9, 2000 before the learned Transferring Tribunal against the defendant Nos. 1 to 5 and the defendant No. 6 for realization of Rs. 12,79,132.05 p.
(2.)Before dealing with the above issue, it will be highly necessary to refer in brief, to the factual background behind the making of such an application.
The defendant No. 1, being a company incorporated under the provisions of the Companies Act, 1956 (Act No. 1 of 1956), approached the applicant Bank and made one application on July 15, 1992 for the reason of sanctioning itself the cash credit and the overdraft facilities and the Bank guarantee. In a reply letter dated September 25, 1993 the said applicant defendant company was informed of that it was sanctioned the following facilities with the certain limit and on a set of terms and conditions stipulated in the said letter by the applicant Bank:

(a) Cash credit limit of Rs. 3 lakhs to be enjoyed by the said company against hypothecation of paid for stocks;

(b) Overdraft facilities for a sum of Rs. 4.50 lakhs against hypothecation of book debts along with 18.75 per cent interest per annum inclusive of tax levied at quarterly rests. A duration for the enjoyment of such facility was specifically prescribed for one year; and

(c) Bank guarantee to the extent of Rs. 2,32 lakhs

(3.)THE said reply letter from the applicant Bank did contain in itself the hard and fast collateral securities to be furnished by the said applicant defendant company numbering about five; besides the above, the said letter did consist of the other terms and conditions numbering about twenty-eight; and on September 28, 1993, the acceptance of the sanction letter dated September 25, 1993 was specifically found to have been made by the said company. THE terms of sanction as specifically prescribed in the reply letter dated September 25, 1993 were agreed to be confirmed by the empowered and authorised Director on behalf of the said company. THE terms of sanction confirmed on behalf of the said company have been quoted below;
"(i) In the event of our failing to get State Capital Subsidy from the Government for our Project we will bring equivalent extra fund from our own resources to meet the gap.

(ii) We will not declare any dividend without prior written consent from your end.

(iii) We will not make any investment in subsidiary/associated sanctions by way of loan or advance or inform of shares of such concern without your written permission.

(iv) We confirm that the Directors are not related to any Senior Executive of Allahabad Bank.

(v) We will mobilise F.D.R. of Rs. 50,000/- within 2 months from the date of first disbursement"

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