STATE BANK OF INDIA Vs. INDUSTRIAL COMMAND OF INDIA
LAWS(DR)-2014-4-5
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on April 21,2014

Appellant
VERSUS
Respondents

JUDGEMENT

Ranjit Singh, J. (Chairperson) - (1.) THIS appeal is directed against the order passed by DRT, Jaipur on 9.1.1998. The appellant Bank had filed an O.A., which was decreed for Rs. 9,52,172.76 with pendente lite and future interest @ 17.5% on cash credit (factory type). The outstanding interest thereon was adjudged to be Rs. 4,96,199.04. The remaining amount represents the outstanding on cash credit (bills) account where no pendente lite and future interest has been allowed. The grievance was against this part of the order whereby pendente lite and future interest has been disallowed on cash credit bills purchase account. Counsel for the appellant has drawn my attention to the relevant part of the order giving reasons which had weighed with the Tribunal below to decline this part of the claim. The Tribunal below has observed that from the documents, it is clear that the Bank had not taken any action to recover the balance amount when as paragraphs 15 and 16 of the O.A. shows that goods worth more than Rs. 10 lacs lying with the transport company which were purchased by the Bank. In support of its view that in such circumstances, the claim was not reasonable or justified, the Tribunal below has made reference to judgment of Calcutta High Court, relevant portion of which reads as under: "It appears from the evidence given on behalf of the Bank that so far as the claim on account of Bill purchase account is concerned, the same was against security of goods represented by the consignment notes issued by the transporter. It also appears that the Bank did not take any suitable steps for realization of the security i.e. to collect the goods or to sell the same and realize its dues. In views of the facts and circumstances relating to the amount due on the Bill purchase account, the learned Counsel for the Bank submitted that some token interest should at least be allowed on the amount due in the Bill purchase account. However, I am not satisfied that the Bank has taken appropriate steps to realize the securities which were under their control and as such I am not inclined to grant any interest upon the amount due in the Bill purchase account."
(2.) COUNSEL for the appellant, however, would refer to a decision of the Hon'ble Delhi High Court, in case Conor a Bank v. R.K. Engineering Co. Pvt. Ltd. and Ors.,, I (2010) BC 673. This was a case where a suit filed by the Bank for recovery on basis of dishonouring of bill of exchange was dismissed by the trial Court. In an appeal filed before the High Court, it is held that the Banks deal in documents and not in goods, if bill of exchange is dishonoured then the Bank is entitled to refund of monies which it had advanced to its customer against security return of goods which it holds as a pledge. Hon'ble High Court while taking this view has relied upon judgment of Hon'ble Supreme Court in case UCO Bank v. Hem Chandra Sarkar, : AIR 1990 SC 1329 wherein similar issue was dealt with and it is held that the Banks deals in documents and not in goods. It is further observed that the relationship of the Bank and its customer is only that of a debtor and creditor and that the Bank is liable only when it fails to return the goods which are in its possession as a bailee i.e. it is not liable when the goods bailed can be returned back to its customer. Relevant paragraph of the judgment in UCO Bank's case (supra) has been produced. The fact remains that claim in this case in regard to pendente lite and future interest has been declined on the ground the Bank did not take any action while the goods were lying. May be that the Bank was to deal in documents but in this case the appellant Bank had an opportunity to deal with the goods, which were valuable and once the Bank had faulted in that regard, the Tribunal below has decided to decline interest to the Bank The view seems to be just and reasonable. I am not inclined to interfere with impugned order passed by the Tribunal below. The appeal is accordingly dismissed.;


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