BANK OF MAHARASHTRA Vs. ELLORA STEELS LTD
LAWS(DR)-2005-3-1
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on March 30,2005

BANK OF MAHARASHTRA Appellant
VERSUS
Ellora Steels Ltd. and Ors. Respondents

JUDGEMENT

Pratibha Upasani, - (1.) ALL these appeals can be disposed of by this common judgment and order as they are arising out of common judgment and order dated 4.4.2003 passed by the learned Presiding Officer of Debts Recovery Tribunal, Aurangabad in five original applications filed by the Bank of Maharashtra and Bank of India against the very same respondents. Appeal No. 89 of 2003 is arising out of Original Application No. 137A/2001. Appeal No. 90 of 2003 is arising out of Original Application No. 126A/2001. Appeal No. 91 of 2003 is arising out of Original Application No. 374A/ 2001. Appeal No. 92 of 2003 is arising out of Original Application No. 101A/2Q01, while Appeal No. 93 of 2003 is arising out of Original Application No. 139A/2001. While first four appeals are filed by the Bank of Maharashtra, Appeal No. 93 of 2003 is filed by the Bank of India. Issues involved in all the appeals are same and prayers also are common. By the impugned order, the learned Presiding Officer of Debts Recovery Tribunal, Aurangabad, while allowing the original applications in favour of the applicant Banks, directed the defendant Nos. 1 to 3, 5 and defendant No. 6 (represented by the Receiver, High Court, Bombay) to pay jointly and severally the amount mentioned in the operative portion of the order pertaining to the respective original applications. The learned Presiding Officer dismissed all the original applications against the defendant No. 4 Surendra Kumar Sitaram Gupta. The learned Presiding Officer also gave certain consequential declarations. The Bank of Maharashtra and the Bank of India are aggrieved by that portion of the order, by which the defendant No. 4 Surendra Kumar Sitaram Gupta has been exonerated. The Banks are also aggrieved because of the low rate of pendente lite and post -decree interest awarded by the learned Presiding Officer. It is, therefore, prayed by the Banks that the impugned judgment and order so far it dismisses the original applications against the defendant No. 4 be set aside and he be held jointly and severally liable along with other respondents to pay the sum, which has been ordered to be paid while disposing of the original applications along with future interest, etc. It is also prayed that rate of interest as granted by the learned Presiding Officer be modified by awarding future interest as the rate of 19.25 per cent per annum with quarterly rests. . .
(2.) Few facts, which are required to be stated, are as follows. Needless to say, the facts and chronology of events are common. However, for the sake of convenience for deciding these appeals by common judgment, facts are taken from Appeal I To. 90 of 2003, which is arising out of Original Application No. 126A/2001. Defendant No. 1 M/s. Ellora Steels Limited is a public limited company, having its registered office at Bombay, Branch Office at Aurangabad and business place and factory at Chikhalthana Industrial area, Aurangabad. Defendant No. 2 Vipinchandra Mittar Jain is the Chairman and Director of the defendantNo. 1 company. DefendantNo. 3 Narendra kumar Reghunandanlal Gupta, defendant No. 4 Surendra kumar Sitaram Gupta and defendant No. 5 Harshawardhan Bharatbhushan Gupta are directors and guarantors in their individual capacity for the various credit facilities sanctioned by the applicant Banks in their respective original applications. Other defendants like MFSC were made formal parties. In the year 1994, at the request of defendant Nos. 1 to 5, the applicant Banks sanctioned to the defendant No. 1 company different credit facilities like cash credit, cash credit (book debts), bills cheques discounting security, inland foreign letter of credit security, Bank guarantee security, CC hypothecation, CC book debts, Bills discounting, inland L.C., foreign L.C., etc. These facilities were granted by the Bank of Maharashtra in consortium with the Bank of India. These facilities were under various heads and the proportion is given below : According to the Bank of Maharashtra at the time of availment of limits, the share of consortium Bank of India revised as given below: In addition, ad hoc limit of bills discounting to the tune of Rs. 60 lacs was sanctioned by the Bank of Maharashtra in December, 1995. In view of sanction of the above loan facilities by the Bank of Maharashtra, the defendants executed necessary loan documents and guarantee documents. The terms and conditions of the loan facilities were accepted by the defendant Nos. 1 to 5. Necessary resolution with respect to acceptance of the terms and conditions, so also with respect to execution of necessary documents of the loan facilities, mortgage of immovable and hypothecation of the movable properties, also was passed. Authorization to execute such documents was given to defendant No. 3 Narendra kumar R. Gupta and defendant No. 5 Harshawardhan B. Gupta. They were authorized signatories on behalf of the defendant No. 1 company. The authorization was also given to use the common seal of the defendant No. 1 company on the concerned loan documents as per the consortium Bankers requirement. Accordingly, the defendant Nos. 3 and 5 being authorized signatories under the resolution of Board of Directors dated 29.9.1994 executed in favour of the applicant Bank of Maharashtra and Bank of India, the loan documents i.e. joint deed of hypothecation dated 5.10.1994, deed of hypothecation of creating second charge dated 5,10.1994, on plant and machinery, working capital consortium agreement dated 5.10.1994, letter of indemnity for guarantee/indemnity issued by the Banks on behalf of the defendant No. 1 company dated 5.10.1994 to the extent of Rs. 55 lacs. Then the defendant No. 3 also deposited on 20.7.1995 the title deeds relating to land, building premises, property, plant and machinery, etc. being or to be lying at Chikhalthana Industrial Area, MIDC, Aurangabad of the defendant No. 1 with an intention to create the security thereon by way of joint equitable mortgage by deposit of the title deeds to secure the due repayment of the facilities. In addition to the above, the defendant No. 5 Harshwardhan B. Gupta on behalf of the defendant No. 1 Company as a Director and being authorized to create equitable mortgage, deposited all the title deeds on 12.10.1995 with the Branch Manager of the applicant Bank of Maharashtra at Aurangabad relating to the plot Nos. 129 and 130, forming part of survey number 12, N -l Sector, CIDCO, Aurangabad and more particularly described in the Schedule II of the said Memorandum of Deposit of title deeds together with the building constructed thereon, with an intention to create the first charge and security thereon by way of equitable mortgage for the amounts of the loan facilities mentioned therein. As such, the applicant Bank of Maharashtra obtained the documents from the defendant No. 1 company for Rs. 725 lacs and supplementary documents for Rs. 125 lacs for the funded facilities. For the non -funded facilities, the facilities had been granted to the tune of Rs. 1200 lacs, in which there were shares of the Bank of Maharashtra of Rs. 905 lacs and the Bank of India of Rs. 195 lacs, documents of which were already taken on 5.10.1994. According to the applicant, Bank of Maharashtra, in consortium of the aforesaid limits, sanctioned to and availed by the defendants, the defendant Nos. 2 to 5 executed deed of guarantee by guaranteeing the due payment of loan amount to the applicant Bank of Maharashtra in respect of the various loan facilities. Likewise, ad hoc limit of bills discounting to the tune of Rs. 60 lacs in the name of the defendant No. 1 company also was sanctioned. The defendant Nos. 3 and 5 executed and delivered the documents like, (a) a request letter for availment of the credit facility to the tune of Rs. 60 lacs under the bills discounting limit dated 27.10.1995, and (b) bills discounting/BP agreement dated 27.12.1995. The said limit was also renewed and lastly it was renewed on 8.5.1996. It was the case of the applicant Banks that all the loan facilities, which were enjoyed by the defendant No. 1 company, became irregular and different amounts became due and payable to the applicant Bank of Maharashtra. The defendants, however, neglected to comply with the various requirements under various security documents. They committed defaults in repayment of the loan amounts and its interest as per the terms and conditions. The defendants Nos. 2 to 5 failed to pay the repayment as guaranteed. The applicant Bank repeatedly called upon the defendants to regularize the accounts and repay the amounts due and payable to the Banks. However, only oral assurances were given but no amount was repaid. Thus, the defendants committed breach of the promise. The accounts became non -performing and, therefore, the applicant Banks recalled the entire amount from the defendants. On 10.3.1997, a legal notice through their Advocate was given to the defendant Nos. 1 to 5 to repay the amounts and its interest under the various facilities. However, the defendants failed to comply with the said notice. The Banks, therefore, were constrained to file original applications for recovery of the amount as due from the defendants and for enforcement of their securities. In response to the summons, the defendant Nos. 1, 2 and 4 appeared and filed their written statement on 31.5.2001. Usual stock defences and contentions were taken by the defendants in their written statement, which was a common written statement filed by these defendants. Thereafter, however, the defendant No. 4 Surendra kumar Sitaram Gupta with the permission of the Tribunal filed additional written statement on 6.2.2002 and came out with a new submission that he had resigned as a whole time working Director of the defendant No. 1 company with effect from 1.10.1994 though he continued to work as a Director. According to him, certain facts came to light subsequently. It was alleged by him in the said additional written statement that he was expressly absolved by the Banks of the guarantee executed in favour of the Bank of Maharashtra and Bank of India, and hence he could not be held liable as a guarantor by the applicant Banks of the amount whatsoever due against the defendant No. 1 company. It was contended that the Banks had suppressed the material facts about waiver of defendant No. 4's personal guarantee by the consortium of Bankers. According to him, he stood discharged from the liability of surety and responsibility for ever. His claim was based on some correspondence and documents which were filed by him. In the earlier written statement, which was a common written statement filed by the defendant Nos. 1, 2 and 4, usual stock defences were taken like signatures were taken on blank documents, that particulars were filled in subsequently, that interest rate was not filled in, that those documents could not be considered as evidence and that statements of account relied upon by the Bank were not correct, though it was admitted that the defendant No. 1 had availed Banking facilities. It was contended that interest rate was not as per the Reserve Bank of India guidelines. It was also contended that the company was the borrower and there was no personal liability of any of the Directors. It was also submitted that the defendant No. 1 company became sick and that proceedings were pending before the BIFR. Coming back to the additional written statement filed by the defendant No. 4, it was the contention of the defendant No. 4 that the defendant No. 4 had resigned from whole time directorship of the defendant No. 1 company from 1.10.1994, that he was persistently pointing out mismanagement in the day -to -day workings/affairs of the defendant No. 1 company by other Directors and that for want of corrective measures by the rest of the directors, the defendant No. 4 had asked the chairman of the company to withdraw the personal guarantee given by him to the Bank of Maharashtra and Bank of India with immediate effect. It was submitted that his resignation as a whole time Director came to be accepted by the Board of Directors on 11.11.1994. It was further submitted that the Banks in the consortium meeting with the company's Directors had agreed to waive personal guarantee of the defendant No. 4 Surendra kumar Sitaram Gupta and had agreed to release him from the personal guarantee. For this purpose, the defendant No. 4 relied upon extract of the minutes of the said meeting, which was attended by the office -bearers of the Bank of Maharashtra and Bank of India and the Directors of the defendant No. 1 company. It was further contended that on 28.12.1994, the Bank of Maharashtra informed the defendant No. 4 that a suitable substitute guarantee or other collateral security from the company was required for absolving the personal guarantee of the defendant No. 4. Ultimately, as per contention of the defendant No. 4, on 21.8.1995, the Board of Directors of the defendant No. 1 company passed a resolution to mortgage the land and building of the company at plot Nos, 129 and 130, situated in N -l Sector, CIDCO, Aurangabad in favour of the consortium of Bank of Maharashtra and the Bank of India by creating equitable mortgage as collateral security for total working capital facilities sanctioned by the consortium Bankers in lieu of the personal guarantee of the defendant No. 4 Surendra kumar Sitaram Gupta. Accordingly, on 12.10.1995, the defendant No. 1 company executed equitable mortgage of the said property in favour of the consortium Bankers in lieu of personal guarantee of the defendant No. 4 Surendra kumar Gupta. The defendant No. 4 contended in his additional written statement that in view of additional security which was furnished as per desire of the consortium Bankers, in lieu of his personal guarantee, he was relieved. 4, The learned Presiding Officer after hearing both the sides and after going through the entire material placed before him accepted the contention of the defendant No. 4 Surendra kumar Gupta and though the learned Presiding Officer allowed the claim of the applicant Banks in their respective original applications against the defendant Nos. 1,2,3 and 5, he dismissed the original applications against the defendant No. 4. Hence, these appeals. 5.I have heard Mr. Umesh Shetty for the appellant Banks and Mr. Nitin Thakkar for the respondent No. 4.1 have also heard Mr. Gangapurwala for the respondent No. 3 and Mr. Dhanuka for the respondent No. 2 who supported the Banks' contentions that the learned Presiding Officer committed an error in dismissing the original applications as against the defendant No. 4 Surendra kumar Gupta, that he was not released by the Bank of the personal guarantee given by him and that he ought to have been made jointly and severally liable along with the defendant Nos. 1, 2, 3 and 5. 6. Mr. Umesh Shetty, the learned Advocate appearing for the appellant Banks in all these appeals, vehemently pointed out that there was no express waiver granted by the Banks to the defendant No. 4 and that he was never released from his personal guarantee. He pointed out that contentions raised by the defendant No. 4 in his additional written statement, were completely contradictory to what was stated by him in his earlier written statement dated 31.5.2001. He submitted that after the original written statement was filed, there was change of Advocate and, thereafter, with the permission of the Tribunal an additional written statement was filed, in which, new averments were made, which were clearly an afterthought. Mr. Shetty drew my attention to the waiver granted by Saraswat Bank and submitted that if the waiver was granted, the Banks would have communicated the same to the defendant No. 4, which was not the case at all. By referring to the meeting held on 28.11.1994, he submitted that the Banks had merely agreed to absolve the defendant No. 4 provided an additional security was given, but actually, the defendant No. 4 was never released from his personal guarantee. He drew my attention to the several letters and other correspondence highlighting the fact, that every time when there was reference with respect to relieving the defendant No. 4 in lieu of additional security to be given by the defendant No. 1 company, it was only with respect to enhanced facilities and that did not mean that the defendant No. 4 was intended to be absolved from existing liability also. He also pointed out that though the defendant No. 4 discontinued to work as a whole time director of the defendant No. 1 company, he was participating in all the proceedings including those pending before the BIFR and was signing as a Director of the defendant No. 1 company on documents including balance sheets of the years 1994 -95 and 1995 -96. 7. On this background, Mr. Shetty submitted that there were disputes among the Directors themselves, with which the applicant Banks were not concerned and that the defendant No. 4 could not be allowed to get away from the guarantee -ship. He further highlighted the fact that the defendant No. 4 was the promoter and Director of the defendant No. 1 company and had signed the guarantee deed wherein there were express clauses whereby, defendant No. 4 had expressly agreed and consented (i) for making any variance, change or modification that the Bank might think fit in terms of Banks' contract with the borrowers, (ii) for determining, enlarging or varying any credit facilities to the borrower, (iii) for not suing the borrowers or the Bank for parting with any security which it might be holding for the guaranteed credit facilities, (iv) for not being discharged from his liability to the Bank, by the Bank releasing the borrower or by any act or omission of the Bank Mr. Shetty pointed out that the defendant No. 4 had expressly waived all the rights under Sections 133, 134, 135, 139 and 141 of the Contract Act. Mr. Shetty, therefore, prayed that the appeals filed by the Banks be allowed and the impugned order be set aside to the extent, it exonerated the defendant No. 4. Mr. Shetty also make grievance with respect to rate of interest granted by the learned Presiding Officer. He submitted that the rate of interest granted by the learned Presiding Officer was abysmal and that the rate of interest which was claimed namely 19.25 per cent per annum ought to have been granted. He prayed that the appeals be allowed in terms of these prayers. 8. Mr. Thakkar, the learned Counsel appearing for the respondent No. 4 Surendra kumar Gupta, on the other hand, argued that the guarantee given by the respondent No. 4 was waived by the Bank of Maharashtra and the Bank of India. He argued that the respondent No. 4 resigned as a whole time working Director of the defendant No. 1 company from 1.10.1994 and that there was mismanagement in the day to day affairs of the company by the other Directors, which was pointed out by the respondent No. 4. He further argued that the funds of the defendant No. 1 company were siphoned off to their sister concerns and for these reasons, the defendant No. 4 wanted to distance himself and wanted to be released from his personal guarantee. He submitted that the Banks had agreed to waive personal guarantee of the respondent No. 4 in lieu of additional security to be given by the defendant No. 1 company and the same was done on 12.10.1995. He submitted that on 21.10.1995 the defendant No. 1 company executed an equitable mortgage of the plot No. 129 and plot No. 130 in favour of the consortium Bankers in lieu of personal guarantee of the defendant No. 4 Surendra kumar Gupta, Mr. Thakkar submitted that in view of this, the learned Presiding Officer had correctly passed the order exonerating the defendant No. 4. He supported the impugned order. He submitted that the conduct of the Banks showed that the defendant No. 4 was exonerated. He submitted that in view of the correspondence, which was placed before the learned Presiding Officer, the original applications against the defendant No. 4, were rightly dismissed. 9. I have heard all the sides. I have also gone through the voluminous proceedings and record of all these five appeals including the impugned judgment and order and in my view, the learned Presiding Officer has committed error in exonerating the defendant No. 4. 10. At first glance, what is striking is, that a completely new defence taken by the defendant No. 4 in his additional written statement filed on 6.2.2002. In the first written statement, which was a common written statement filed by him on 31.5.2001 along with other defendants, only stock and usual defences were taken by him as mentioned earlier. In this additional written statement (there was change of Advocate after filing of the original common written statement) there was complete turn around and complete new defence was taken, about which, there was not a whisper in the earlier written statement. That new defence was that the consortium of Bank of Maharashtra and Bank of India had expressly waived his personal guarantee in lieu of the defendant No. 1 company executing equitable mortgage of the two plots at No. 1 Sector, CIDCO, Aurangabad and that this additional security was given by the defendant No. 1 company as per condition put by the Bank for releasing the defendant No. 4 Surendra kumar Gupta. He also came out with an allegation of mismanagement and siphoning off the funds by the other Directors of the defendant No. 1 company to their sister concerns. It is clear that there were internal disputes between the Directors of the defendant No. 1 company, However, question is whether the defendant No. 4 can be absolved from his guarantee? Question is whether additional security given by the defendant No. 1 company was in lieu of waiver of personal guarantee by the defendant No. 4 and if yes, whether it was with respect to waiver of his responsibility as a guarantor with respect to enhanced facilities or whether it was with respect to existing facilities. Another question is whether the Bank had simply agreed to waive the personal guarantee of the defendant No. 4 or whether that agreement was only in the nature of consent given by the Bank on certain conditions, which were never implemented, meaning thereby that the Bank though agreed in principle to absolve the defendant No. 4 but, in fact, never released him. Issue really boils down to this, whether giving additional security by the defendant No. 1 company had the effect of releasing the defendant No. 4 with respect to enhanced facilities or with respect to earlier, existing facilities? After going through the plethora of correspondence and after hearing both the sides and considering the legal position, in my view, the defendant No. 4 cannot be allowed to wriggle out of his earlier guarantee deed though it may be said that he may not be liable for the enhanced facilities because he had indicated his unwillingness to do so and the defendant No. 1 company was constrained to execute equitable mortgage of the two plots at N1 Sector, CIDCO, Aurangabad and that equitable mortgage of the above two plots was executed in lieu of personal guarantee of the defendant No. 4 with respect to enhanced facilities granted by the Banks. It was contended by Mr. Thakkar that though new defence came out in the additional written statement, the said additional written statement was filed with the leave of the learned President Officer and that order could have been challenged by the Bank in the Appellate Forum, but that was not done and, therefore, that order has attained the finality. It is true that the Banks did not challenge at that stage the said order allowing the defendant No. 4 to file additional written statement by filing misc. appeal, but they cannot be prevented from challenging the said order or raising this point at the time of hearing of this appeal. It is indeed true that there is not even a whisper in the original written statement about the Bank's alleged willingness to release the defendant No. 4 in lieu of defendant No, 1 company giving additional security. His discontinuation to work as a whole time Director of the defendant No. 1 was from 1.10.1994. Meeting of the consortium of the Banks was held on 28.11.1994. It was, in this meeting that the question of additional foreign letter of credit limit of Rs. 550 lacs, so also issue with respect to withdrawal of Mr, S.K. Gupta's personal guarantee were on the agenda of the said meeting. Minutes of the said meeting dated 28.11.1994 with respect to withdrawal of personal guarantee of Mr. S.K. Gupta can be reproduced below, as follows: "The company informed that Mr. S.K. Gupta has resigned from whole time directorship due to his pre -occupation with other activities and the company's board has accepted his resignation as whole time Director in its meeting held on 16.11.1994. It was also informed that Mr. S.K. Gupta will continue on the board though not actively involved. In view of above, it was requested by the comany to the consortium to relieve him from the personal guarantee. It was also claritied that Mr. S.K. Gupta was not allotted any specific work exclusively and the existing whole time Directors are capable of looking after the day to day work of the company without any difficulty. When asked, about his shareholding in the company and possibility of any change in the management it was clarified that 60 per cent of the company's shares are held by the general public and as such there would not be any change in the management due to resignation of Mr. S.K. Gupta. Accordingly, (Emphasis supplied) Thus, in the meeting dated 28.11.1994, it was agreed in principle to waive the guarantee of Mr. S.K. Gupta in his personal capacity. Thereafter, however, the Banks wrote that it was not possible for the Banks to relieve the defendant No. 4 of his personal guarantee with respect to existing facilities, in lieu of additional security to be given by the defendant No. 1 company. Subsequently on 12.10.1995 such additional security was given by the defendant No. 1 company but this was obviously with respect to enhanced facility, which was granted by the Banks and availed by the defendant No. 1 company. Since relations between the defendant No. 4 and other Directors were strained, the defendant No. 4 was not ready to be burdened anymore and, therefore, he declined to give any personal guarantee, obviously with respect to additional/enhanced facilities which were granted by the Banks to the defendant No. 1 company. The Banks were not willing to grant facilities unless additional security was given and, therefore, on 12.10.1995 the said additional security was given by the defendant No. 1 company. But all this has to be viewed on the background of granting additional facilities only. This is clear from agenda for the proposed consortium meeting, which was to be held on 7.7.1995 at Hotel President Park, Aurangabad and the relevant clause is Sub -clause (1) of Clause 8, which reads as under: 8. Non -compliance of the sanction terms: (i) furnishing personal guarantee of Shri S.K. Gupta for enhanced limits of Rs. 850.00 lacs. Letter dated 16.12.1995 written by the Bank of Maharashtra to M/s. Ellora Steels Limited/ defendant No. 1 throws much light on this point. In the beginning only, the said letter states that "it was regarding request for review with enhancement" (emphasis supplied). In the body of the said letter, it is stated that "total funded facilities are enhanced from Rs. 640 lacs to Rs. 670 lacs in total consortium limits of Rs. 900 lacs on the following terms and conditions.'' 11. Thus, it is evident that all this correspondence was with respect to enhanced facilities and for this purpose, as was done before, the Banks were insisting for personal guarantee of the defendant No. 4 Surendra Kumar Gupta, which he was not willing to give. since defendant No. 4 Surendra Kumar Gupta was not willing to give personal guarantee, the Banks insisted for additional security, which was given by the defendant No. 1 by executing equitable mortgage of the plots at N1 Sector, CIDCO, Aurangabad on 12.10.1995. Thus, everything was with respect to the enhanced facility only. However, what happens to the liabilities which are already existing? They obviously remain in tact including the liability of the defendant No. 4 as a guarantor and the terms of the guarantee deed executed by him, binds him. By the said guarantee, he has agreed to waive all his rights under Sections 133, 134, 135. 139 and 141 of the Contract Act. All these sections of the Contract Act deal with conditions under which the surety is discharged. Useful reference can be made to the Division Benchjudgment of the Bombay High Court in the case of Mr. Deepak C. Dalaland Anr. v. Indian Bank and Ors. passed on 16.8.2000 in Writ Petition No. 6518 of 1999, wherein Division Bench of the Bombay High Court has clearly upheld the view of the Single Judge of the Bambay High Court that "the rights available to the surety can be waived by the surety." 12. The moot question is, as to how the defendant No. 4 can be absolved from the liability when the guarantee executed by him with respect to existing facilities is not revoked? His liability under the said guarantee deed, will not evaporate or melt away. It will continue to exisc with respect to the facilities availed by the defendant No. 1. As far as enhanced facilities are concerned, the defendant No. 4 had liberty to stand as a guarantor. He also had a liberty to decline to be the guarantor for this enhanced facilities. He declined to be the guarantor for the enhanced facilities and that forced the defendant No. 1 company to give additional security, in addition to the guarantees given by other Directors because the Banks were insisting for it. This was also in the context of the enhanced facilities only. Therefore, at the most, it can be said that the defendant No. 4 cannot be held liable for the enhanced facilities granted by the Banks and availed by the defendant No. 1 company. Thus, it was wrong on the part of the learned Presiding Officer to exonerate the defendant No. 4 as a guarantor with respect to earlier facilities availed and enjoyed by the defendant No. 1 company, for which the defendant No. 4 was a guarantor. 13. As far as awarding of future interest is concerned, in my view, the learned Presiding Officer has correctly awarded the same at the rate of 12 per cent per annum with yearly rests from the date of the suit till its realization because all accounts became NPA and, therefore, interest rate asked by the Bank was rightly held to be exorbitant. The Banks have already had considerable amount by way of interest. It is to be kept in mind that the defendant No. 1 company was before the B.I.F.R. On this background, no interference is required in the rate of future interest awarded by the learned Presiding Officer as he has exercised his discretion judiciously with respect to awarding of pendente lite and post -decree interest. Therefore, prayer made by the applicant Bank for enhancement of the future interest is hereby rejected. In view of the aforesaid discussion, the appeals will have to be partly allowed. Hence, following order is passed: ORDER Appeal No. 89 of 2003, Appeal No. 90 of 2003, Appeal No. 91 of 2003, Appeal No. 92 of 2003 and appeal No. 93 of 2003 are hereby partly allowed in terms of prayer Clauses 6(a) and 6(b) of the respective appeal memo. Impugned order dated 4.4.2003 passed by the learned Presiding Officer of Debts Recovery Tribunal, Aurangabad in Original Application Nos. 126 -A/2001, 139 -A/2001, 374 -A/2001, 101 -A/2001 and 137 -A/2001 is hereby set aside to the extent these original applications are dismissed against the respondent No. 4 Surendra Kumar Sitaram Gupta and that portion of the order is substituted as follows: The respondent No. 4 is hereby jointly and severally held liable along with respondent Nos. 1 to 3 only with respect to existing facilities and not with respect to enhanced facilities
(3.) Rest of the order remains as it is. In view of this order M.A. 334/03, M.A. No. 335/2003, M.A. No. 336/2003, M.A. No. 337/2003 and M.A. No. 338/2003 in Appeal Nos. 89 of 2003 to 93 of 2003 do not survive and are disposed of accordingly.;


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