STATE BANK OF INDIA Vs. V N ANANTHA KRISHNAN
DEBTS RECOVERY APPELLATE TRIBUNAL
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Pratibha Upasani, -
(1.) THIS substantive appeal is filed by the appellant/Original applicant State Bank of India, being aggrieved by the judgment and Order dated 29.10.2004, passed by the learned Presiding Officer of DRT, Bangalore, in OA-866/1999. By the impugned Judgment and Order, the learned Presiding Officer allowed the OA with cost in favour of the Bank directing defendant Nos. 1 to 5 to personally pay to the applicant Bank jointly and severally, sum of Rs. 11,19,479.19 p with subsequent interest at the rate of 15.80% p.a. compounded quarterly from the date of application till the date of realisation. He further gave direction with respect to the enforcement of securities by giving direction that the applicant Bank should cause the sale of Schedule 'A' hypothecated properties, Schedule 'B' mortgaged property belonging to defendant No. 4 and Schedule 'C' mortgaged property belonging to defendant No. 6 for the purpose of realisation of the above debt. A further directions, thereafter, given that the applicant Bank should proceed against the Schedule 'C' property of defendant No. 6 only as a last resort, and it is this last direction which is hurting the applicant Bank and hence appeal to this Appellate forum on this limited issue and ground.
(2.) Few facts which are required to be stated are as follows.
Defendant No. 1 Aparna Creations is a Partnership firm of which defendant Nos. 2 to 5, are the partners. Defendant No. 6 is arraigned in his status as a guarantor. Defendant No. 1 firm represented by its partners approached the applicant Bank for certain credit facilities. Accordingly, the applicant Bank on consideration of their request sanctioned Medium Term Loan of Rs. 28.20 lakhs on 21.8.1996. The defendants accepted the terms and conditions of sanction. Defendant Nos. 1 to 5 fully availed and utilized the said facility. Defendant Nos. 2 to 5, apart from being partners of defendant No. 1 firm had also personally guaranteed due repayment of the debt along with guarantor defendant No. 6. Usual security documents were executed by the defendants.
Defendant Nos. 2 to 5, again approached along with defendant No. 6, applicant Bank seeking grant of credit facilities. In consideration thereof, the applicant Bank sanctioned Cash Credit (Mundy Type) of Rs. 7 lakhs and Cash Credit (Receivables) of Rs. 19 lakhs. Again, security documents were executed and defendant Nos. 2 to 5 and defendant No. 6 stood as guarantors. In addition to the primary security of hypothecated machineries, the defendant Nos. 4 to 6 also created equitable mortgage of their property set out in Schedules 'B' and 'C' respectively, in favour of the applicant Bank towards due security of both the credit facilities. Revival letters were also executed by defendants acknowledging the availment of credit facilities. However, thereafter, the defendant's account became irregular and they committed defaults. The applicant Bank, therefore, issued legal notice recalling the outstanding amount which was due to the Bank, but there was no response. Hence, the Bank was constrained to file the O.A. in DRT, Bangalore.
(3.) DEFENDANT No. 1 firm remained ex pane despite service. DEFENDANT No; 4 filed Written Statement, which was adopted by defendant Nos. 2 and 3. DEFENDANT Nos. 5 and 6 filed heir respective Written Statements separately.;
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