CANARA BANK Vs. KALINGA TRANSFORMERS PRIVATE LIMITED
LAWS(DR)-2004-6-14
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on June 06,2004

Appellant
VERSUS
Respondents

JUDGEMENT

D.C.Thakur, - (1.) THE suit which has been instituted by the applicant Bank against a number of the eight defendants not only for the purpose of recovering the huge amount of Rs. 25,39,688.56 p but also for the enforcement of the mortgage as well as the hypothecated properties described respectively in the schedules 'B' as well as the annexures containing the detailed enumeration of the thirty-five lands and machineries as on March 31, 1982; which has partaken the character of a claim application after the transfer of itself being caused by the operation of law to this judicial body, has been taken up for the due consideration of itself. For the recovery of the said amount being claimed by the applicant Bank as the "due and recoverable" amount from those defendants under the different heads of the credit facilities like (a) overdraft credit facility (Rs. 11,45,579.05 p), (b) K.C.C. for a sum of (Rs. 5,04,182.51 p), (c) Produce loan (Rs. 49,501.25 p) and (d) the Bank guarantee (Rs. 40,425.75 p), the said Bank did present necessarily one plaint before the learned Subordinate Judge (First Court), Cuttack after impleading those defendants therein. Such plaint was presented under Section 26 of the Code of Civil Procedure, 1908 (Act No. V of 1908). Such suit was also meant for the enforcement of the mortgage as well as the sale of the immovable mortgage property to be covered under Order 34 of the First Schedule to the said Code.
(2.) The said suit was then instituted by the applicant Bank before the above Civil Court, because the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Act No. LI of 1993) was not brought on the statute book as apiece of legislation for the purpose of conferring the relief upon such Bank. The averments as contended in the said plaint being popularly called and known as the plaint-allegation had been able to satisfy prima facie the then trying judicial forum to issue the summons upon each of those eight defendants, out of whom the defendant No. 1 is a corporate entity. The said defendant No. 1 is not only a corporate entity, but also a close company (Palmer), because of its composition as well as the paid up share capital of itself being almost held by the members of the same family i.e. the family of Mishra, as the share-holders of the said defendant company. Out of such eight defendants, the defendant Nos. 6 and 8 were described as the minors to be represented through their natural guardian being no other than the defendant No. 5 in its plaint by the applicant Bank as the plaintiff. Those defendants made thereafter their specific appearance before the said adjudicating body; and also participated in T.M.S. No. 5 of 1989 by way of filing the different sets of written statements, one of which had been filed by the defendant Nos. 1 to 3, whereas the other had been presented by the rest. Thereafter, before the said judicial forum, one application was necessarily moved by the said applicant plaintiff Bank under the provisions laid down in Rule 5 Order 38 of the said Code. To the above application, the defendant Nos. 4 to 8 raised necessarily as well as vehemently one objection traversing the allegations and contended therein that in view of the attachment before judgment possessing the character to adversely affect one kind of guarantees that was at that relevant time very much in force, the said application lost its innate strength and tenability. Not only that, the learned Advocate for the participating defendant Nos. 4 to 8 as the opposite parties has also been heard by the said trying Court at length. Amongst the manifold submission made before the said judicial forum, the following submission like, "since the machineries and other materials factory have been hypothecated to the plaintiff Bank and the defendants/opposite parties are running the factory, they will suffer the irreparable loss, in case the same is attached and sold" is also being mentioned. The assurance cum submission made by the learned Advocate before the said forum that the properties mortgaged at the time of availing the loan facility would undoubtedly constitute the sufficient security and the price of the mortgage and hypothecated properties would be more than doubling the suit claim had been able to convince and satisfy much the said forum in steadily refusing the relief as prayed for. The said learned Advocate has also assured the learned Civil Judge of that by dint of the necessary execution of documents, the interests of the plaintiff Bank has been placed under the due, sufficient protection. Accordingly, as there was prevalent and dormant, the judicial admission made unequivocally by the learned Advocate acting for the defendants, no scope for invoking the provisions contained in Rule 5 of Order 38 of the Code of Civil Procedure, 1908 arose before the said Court. Though the said application for the applicant Bank was ordered to be dismissed on contest, the valued observation made by the learned Court that there is no other material on record to establish or show that as either the defendants/opposite parties have been with the lurking intent to avoid or defeat the decree that may be passed against them or those defendants; and are trying to dispose of or remove the movable properties from the local limits of the jurisdiction of this Court, no scope for any sort of interference has been before itself should always be borne into mind.
(3.) MOREOVER, the defendants/opposite parties, while availing the suit loan, factually mortgaged their immovable properties; and also executed the deed of equitable mortgage in respect of such properties; and also executed as the condition precedent the deed of hypothecation in respect of the machineries and equipments of the factory to arrange for the security of the Bank, which is traditionally and popularly known as the movable mortgage. Thereafter, as decree would have been passed on the special contest but in substance on admission against the defendants, the petitioner could realise as of right the decretal due by way of sale of both the mortgaged and hypothecated properties. Here is also being taken into consideration the further observation of the said Court like an order or attachment before judgment is an "harshest remedy" that has been perhaps made in the background of the submission made with force by the learned Advocate, appearing for the defendant Nos. 4 to 8. In the ultimate analysis, the application presented under the aforementioned legal provisions had been dismissed by the said Court by its Order No. 57 on March 26, 1993.;


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