PUNJAB & SIND BANK Vs. BHASIN ASSOCIATES LTD.
LAWS(DR)-2014-3-5
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on March 11,2014

Appellant
VERSUS
Respondents

JUDGEMENT

Ranjit Singh, J. - (1.) PUNJAB and Sind Bank had approached DRT -II, Delhi for recovery of a sum of Rs. 5,31,68,749.45 along with pendente lite and future interest thereon @20% per annum with quarterly rests as well as cost from respondents, which claim has been rejected by the Tribunal below. The present appeal is directed against the said order dated 17.8.2012 passed by the Tribunal below.
(2.) RESPONDENT No. 1, a company incorporated under the Companies Act, 1956, has been ordered to be wound up by the Hon'ble High Court of Delhi on 15.5.2012 and an Official Liquidator has been appointed. Respondent No. 1 had entered into a subcontract with M/s INVANIL MILUTINOVIC PIM for construction of power station etc. The appellant had a branch in London and respondent No. 1 had been allowed overdraft facility in US dollar through its branch at Janpath. Respondent No. 1 was granted credit facility in foreign currency. The branch of the appellant Bank was taken over and amalgamated with the Bank of Baroda and the amount then outstanding against respondent No. 1, i.e., US $ 5,144,861.22, was transferred to the account book of Bank of Baroda. The said Bank of Baroda agreed to take over the account respondent No. 1 provided the same was guaranteed by the appellant Bank. The appellant Bank furnished Overseas Borrowing Guarantee in favour of Bank of Baroda, London. This guarantee was renewed from time to time and was validated up to 31.3.1991 for a sum of US $5.8 million. Respondent No. 1 through its Managing Director, respondent No. 2, executed and delivered a guarantee undertaking repayment of obligation. Late Mr. M.S. Bhasin and late Ms. R.K. Bhasin executed personal guarantees dated 18.3.1991 and 12.4.1990 respectively. They also agreed that the guarantees would stand extended as and when the appellant extended the validity period of the Overseas Borrowing Guarantee. Respondents 4 and 5 have inherited the estate of late M.S. Bhasin and Ms. R.K. Bhasin and so it is stated that they are liable to liquidate and discharge their liability.
(3.) THE Overseas Borrowing Guarantee was invoked and a sum of Rs. 15,09,43,396/ - was remitted. The respondents were called upon to pay the liability. On their failure to discharge the liability, the appellant instituted a suit before the High Court of Delhi in the year 1993, which was transferred to DRT and refilled as O.A. No. 343/1995. The appellant had reserved their right to claim interest and charges in the event Bank of Baroda claimed the same from the appellant Bank.;


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