STATE BANK OF INDIA Vs. VAN PHARMA LABORATORIES
LAWS(DR)-2004-12-19
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on December 15,2004

Appellant
VERSUS
Respondents

JUDGEMENT

P.K.Deb, - (1.) THIS appeal has been preferred against the judgment and order dated 21st January, 2001 passed by the then Presiding Officer, DRT, Jabalpur in T.A. No. 184/98, whereby and whereunder the claim of the appellant Bank to the tune of Rs. 14,60,288.80 has been rejected and dismissed. The brief facts of the case are stated as under: 1. The respondent defendant No. 1 M/s. Van Pharma Laboratories is a partnership firm engaged in the business of manufacturing and sale of medicines. The respondent defendant Nos. 2 and 3 are the partners of the respondent No. 1 firm. The respondent No. 1 Firm enjoyed the cash credit facility from the appellant Bank and respondent Nos. 4 and 5 stood as guarantors. As per the plaint story the respondent No. 1 through its partners respondent defendant Nos. 2 and 3 requested the appellant Bank for grant of working capital and as such cash credit facility of Rs. 2.15 lakh was granted by the Bank and sanctioned as per the terms and conditions attached to the agreement which was executed by the respondent defendant Nos. 2 and 3 on 1st June, 1983. The rate of interest at the relevant time was 16% per annum with quarterly rest. The respondent defendant Nos. 2, 3 and 4 in their personal capacity executed the guarantee agreement on 1st June, 1983 in respect of said cash credit facility granted to the respondent defendant No. 1 Firm/Subsequently respondent defendant No. 5 had also executed revival letters in respect of the aforesaid credit facility. Respondent No. 1 again executed a letter of revival on 15th October, 1988, but as no repayment was made, then originally a suit was filed in the Civil Court claiming Rs. 14,60,288.80 against all the respondent defendants claiming themselves to be jointly and severally liable.
(2.) The respondent defendant Nos. 1,2 and 3 filed joint written statement stating inter alia that the Bank failed to provide adequate finance to them as per the agreement, as a result the respondent No. 1 firm incurred heavy loss in the business and because of the fault of not providing adequate funds the claims of the appellant Bank should be dismissed. The respondent defendant No. 4 Rati Bhai Patel filed separate written statement denying all the averments in the plaint. It was stated that he did not wilfully executed the guarantee agreement and that his signatures were obtained on blank documents and on 16th June, 1987, he requested the appellant Bank for return of his guarantee and discharge of his liability. No written statement was filed by the respondent defendant No. 5.
(3.) THE main contention of the respondent defendant No. 5 was with respect to the opening balance of the loan facility as per exhibit No. P/7 wherein 10th June, 1983 a sum of Rs. 3,26,102.54 was shown to be transferred from the previous account of respondent No. 1 to the new account. In that way it was the contention of respondent defendant No. 4 that his liability as guarantor remains oblique when his guarantee even if taken to be correct and legal, then the same cannot exceed Rs. 2.15 lakh and he cannot be and should not be made liable as a guarantor for the accounts maintained by the Bank in exhibit No. P/7. On such position the appellant Bank filed a rejoinder stating that the respondent Nos. 1,2 and 3 were enjoying the facility of cash credit since 1978 and in the year 1983 fresh agreement of cash credit balance of Rs. 2.15 lakh was entered into and the balance of the previous loan account have been transferred in admittance of the respondent defendant Nos. 1,2 and 3. It was further contention of the respondent defendant No. 4 that his guarantee agreement stood as discharged when the respondent defendant No. 5 had executed a fresh guarantee agreement in the year 1985.;


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