CENTRAL BANK OF INDIA Vs. PRITHVI ISPAT P LTD
DEBTS RECOVERY APPELLATE TRIBUNAL
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(1.) THIS is an application for recovery of Rs. 8,93,86,852.41 from defendants 1 to 3, 15 and 16 with interest at 17.5% p.a. with quarterly rests. The amount is outstanding under three facilities as below:
From out of the aforesaid amount, a sum of Rs. 2,04,14,940.67 along with interest as above is sought to be recovered from defendant Nos. 4, 5, 6, 9, 12 to 14 and Rs. 1,54,93,780.50 from defendant Nos. 7, 8, 10 and 11.
(2.) The amounts are sought to be recovered by liquidating 1st defendant's hypothecated properties and mortgaged properties of defendant Nos. 1 to 3.
The defendant No. 1, the borrower company is the applicant's constituent since from when it was partnership firm of defendant Nos. 2 and 3. The borrower (defendant No. 1) is a company since from 1994 of which defendant Nos. 2 and 3 are directors sued as guarantors along with defendant Nos. 15 and 16 and rest of the defendants as guarantors to a limited extent.
(3.) IN or about February, 1994, the defendant No. 1 took over by agreement dated 1st February, 1994 M/s. Mehta Steels Ltd. along with all assets and liabilities. The 1st defendant executed security documents namely D.P. Note, Deeds of hypothecation, etc. on 10th February, 1994 in favour of the Bank in respect of Demand Cash credit limit of Rs. 149 lakhs and Bank Guarantee upto Rs. 25 lakhs. This was secured by personal guarantee of defendant Nos. 4 to 7, 14, 2, 3 and 8 to 12 and registered mortgage by defendant No. 2. On or about 10th April, 1995 the applicant renewed and enhanced the facilities to become Cash Credit (hypothecation) -- Rs. 100 lakhs, Overdraft -- Rs. 50 lakhs, L/C. -- Rs. 50 lakhs and Bank Guarantee -- Rs. 25 lakhs. Defendant Nos. 2 to 6, 9 and 12 to 14 gave personal guarantees. The further security was equitable mortgage by deposit of title deeds of 2nd defendant's flat. The borrowers and guarantors executed usual security documents and letters of guarantee, as the case may be. The borrower availed of the facilities.;
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