TATA IRON & STEEL COMPANY LTD Vs. BANK OF INDIA
LAWS(DR)-2003-3-2
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on March 28,2003

Appellant
VERSUS
Respondents

JUDGEMENT

S.K.Mohapatra, - (1.)BOTH the Miscellaneous Application No. 3/2002 and Appeal No. 1/2002 have been filed by TISCO (Def. No. 3 in O. A. No. 2/97) under Sections 26(2) and 30(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as DRT Act) respectively, praying for withdrawal of the certificate passed consequent to the final order dated 1.2.2000 in O.A. No. 2/97 and for setting aside the notice of demand dated 24.4.2000 issued by learned Recovery Officer, consequent to the Certificate issued in O.A. No. 2/97. Arguments of both the Counsels on the aforesaid petitions were heard. The applicant/appellant has filed a single written note of argument in both the Miscellaneous Application No. 3/2002 and Appeal No. 1/2002 on 26.3.2003. For the sake of convenience both the petitions are taken up in the instant judgment.
(2.)The brief facts of the case are that the Bank of India had filed an Application under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 against the 3 defendants i.e. (1) Kumardhubi Metal Casting & Engineering Limited, Dhanbad, (2) Bihar State Industrial Development Corporation Limited, (3) TISCO. From Paragraph 15 of the judgment dated 1.2.2000 passed in O.A. No. 2 of 1997, it appears that defendant Nos. 1 and 2 did not appear before the Tribunal despite service of notice and paper publication. The defendant No. 3 (TISCO), the present applicant appeared before the learned Tribunal and filed show cause. Thereafter, defendant No. 3 left appearing before the Tribunal and did not contest the suit. Learned DRT, Patna by a speaking order dated 1.2.2000 allowed the application of the Bank along with cost and interest and also issued certificate dated 7.2.2002 against all the aforesaid 3 defendants. Pursuant to the certificate dated 7.2.2000 passed in O.A. No. 2 of 97 the Recovery Officer had initiated recovery action inter alia by issuing notice of demand to the TISCO on 24.4.2000. The said notice of demand is also under challenge, along with prayer for withdrawal of the aforesaid certificate.
The contention of the applicant (TISCO), precisely is that it was only a shareholder of the principal debtor i.e. Kumardhubi Metal Casting and Engineering Limited, which is a company having independent legal entity, and the applicant is neither the borrower nor the guarantor and, therefore, cannot be liable simply on the ground that it was a shareholder of the borrower company, In the circumstances, it has been stated that no certificate can be issued against the applicant (TISCO) and there is a clear error in the aforesaid judgment and certificate, issued inter alia against the applicant. Heard the parties and all contesting issues are discussed below.

(3.)THE first question is whether Certificate dated 7.2.2000 issued by learned Presiding Officer, DRT, Patna consequent to judgment dated 1.2.2000 can be withdrawn by this Tribunal under Section 26(2) of the DRT Act.


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.