TULSI INDUSTRIES Vs. RATNAKAR BANK LTD
LAWS(DR)-2005-8-18
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on August 03,2005

Appellant
VERSUS
Respondents

JUDGEMENT

Pratibha Upasani, - (1.) BOTH these appeals can be disposed of by this common judgment and order as parties are same and issue involved is also same. Appeal No. 114/2004 is filed by the appellants/original defendant Nos. 1 to 3 M/s. Tulsi Industries and Ors. being aggrieved by the judgment and order dated 31.7.2002 and 11.12.2002 passed by the learned Presiding Officer of the Debts Recovery Tribunal, Pune in Original Application No. 439-P/2001, while Appeal No. 204/2005 is filed by the appellants/original defendant Nos. 1 and 2 M/s. Tulsi Industries against the very same judgment and order whereby their counter claim came to be rejected.
(2.) Few facts, which are required to be stated, are as follows: The appellant No. I/defendant No. 1 is a proprietary concern, which is run by the appellant No. 2/defendant No. 2. The defendant Nos. 1 and 2 availed loans from the applicant Bank. The defendant Nos. 3, 4, 6 to 8 were the guarantors for repayment of the loan found due and repayable from the defendant Nos. 1 and 2. All these defendants are close relatives and members of the same family. On or about 10.2.1993, the defendant No. 2 made an application for advance of term loan and cash credit facility for the business, which was to be run by the defendant No. 2 under the name and style of M/s. Tulsi Industries. The said application was considered by the applicant Bank and term loan of Rs. 17 lakh was sanctioned at the rate of 19% per annum with quarterly rests and cash credit facility of Rs. 13,5 lakh at the rate of 18.25% per annum with quarterly rests. The defendant No. 2 agreed to pay interest and other charges and the rate of interest was subject to RBI directions. The loan was actually disbursed on defendants' executing necessary documents referred to in the original application. The defendant No. 2 operated the account by withdrawing the amount from time-to-time. However, the defendants/appellants failed and neglected to repay the term loan with interest as agreed. Demands in writing were also made by the applicant Bank from the defendants. It was alleged that defendant No. 2 made a breach of the term incorporated in the deed of mortgage. Notice was not replied and, therefore, premises in which the hypothecated goods were stocked, were sealed. It was the contention of the applicant Bank that the defendant No. 2 highhandedly broke open the seal and he tried to manhandle the applicant Bank's manager. The applicant Bank therefore filed a suit before the learned Civil Judge (Senior Division), Kolhapur for recovery of Rs. 36,79,014.37. The said suit came to be transferred to the DRT, Pune upon its establishment as per the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter to be referred to as RDB Act). The defendant Nos. 1 and 2 appeared and contested the original application by filing written statement inter alia raising several issues. According to them, the applicant Bank did not disclose the amount sanctioned and the terms of the sanction letter. According to them, vague statements were made in the original application and that the Bank did not abide by the terms and conditions of the agreement of loan. It was admitted that on 10.2.1993, the defendant No. 2 made an application to the applicant Bank for financial assistance. It was, however, contended that the applicant Bank suppressed material facts. It was their grievance that only part of the amount was disbursed and remaining amount was not disbursed due to which the defendants'business suffered a lot. It was contended that before expiry of moratorium period, the applicant Bank started debiting the amount of instalments and interest, violating the terms and conditions. It was submitted that the facilities were sanctioned under priority sector and under SIDBI scheme. It was contended that under the said scheme, the owner was required to raise 35% of his own and remaining amount was to be disbursed by the Bank. According to the appellants, the applicant Bank did not perform its part of the contract and made breach of the contract by not disbursing the term loan. They also denied execution of mortgage deed, DP note, deed of hypothecation, etc. According to them, signatures of the defendants were obtained forcibly under various promises. The main contention of the defendants was that since full amount was not disbursed, the defendants were adversely affected. Another contention taken by the defendants was that entries made in the account were fictitious. According to them, operation, of both the facilities was different and, therefore, transfer of entries from cash credit to term loan account would not have been made. It was contended that no amount was actually given to the defendants for purchase of raw material or for working capital. Taking these contentions, it was prayed that the original application be dismissed.
(3.) ALL defendants appeared and filed their written statement denying contentions of the applicant Bank.;


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