STATE BANK OF INDIA Vs. FLETCHER PIONEER INDIA PVT LTD
LAWS(DR)-2005-8-9
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on August 11,2005

Appellant
VERSUS
Respondents

JUDGEMENT

K.Gnanaprakasam, - (1.) THE appellant Bank had filed OA-725/1995 against the 2nd respondent viz., C.C. George, for recovery of a sum of Rs. 15,84,495.98p. and the said OA was allowed by order dated 24.4.1999. THE Bank during the pendency of the OA came to know that the 2nd respondent herein had disposed of the property to the 1st respondent for a sale consideration of Rs. 1,44,00,000/- (Rupees one crore and forty-four lakhs only). It is stated that the 1st respondent had issued a cheque dated 16.6.1998 in favour of the 2nd respondent for a sum of Rs. 17,00,000/- that being the part of the sale consideration had chosen to withhold the said sum as that being the amount due to the appellant Bank by the 2nd respondent with a specific understanding that the said cheque will not be encashed by the 2nd respondent till the dues to the Bank are settled. THE 1st respondent is well aware that the 2nd respondent owes money to the Bank and in fact that there was a correspondence between the 1st respondent and one H. Thippa Reddy during 1997 in this regard. As soon as the Bank came to know about the said transaction between the respondents 1 and 2 and also the amount withheld by the 1st respondent, the Recovery Officer issued a demand notice dated 12.6.2000, restraining the 1st respondent from paying the said money to any person and also directed him to deposit the said amount with him.
(2.) But on the other hand, the 2nd respondent had withdrawn the said amount on 5.7.2000 with the help of the 1st respondent, through a fresh cheque dated 24.3.2000. This conduct of the 1st respondent amounts to deliberate fraud and the transaction between the respondents 1 and 2 was a sham and nominal one which is not binding on the appellant Bank. The appellant Bank filed a petition under Section 28(2) of the Recovery of Debts Due to Banks and Financial Institutions (RDDB&FI) Act, 1993, seeking direction to the 1st respondent to deposit a sum of Rs. 17,00,000/- and in pursuance of the same, Recovery Officer issued a notice calling upon the 1st respondent to pay the said amount. Both the appellant and the 1st respondent were heard by the Recovery Officer and he had allowed the application of the appellant Bank by order dated 17.12.2003 and directed the 1st respondent to deposit the said amount together with interest.
(3.) AS against the said Order dated 17.12.2003 passed by the Recovery Officer, the 1st respondent herein preferred an appeal before the DRT, Bangalore, and the learned Presiding Officer after hearing both the parties, by order dated 18.1.2005 set aside the Order of the Recovery Officer dated 17.12.2003, and allowed the appeal on the ground that there was no demand notice in DCP-1120 to the 1st respondent and demand notice issued was in respect of DCP-1121, which is relatable to a different case. The said order is under challenge in this appeal. Heard the learned Advocate for the appellant and the respondents.;


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