Pratibha Upasani, -
(1.) THIS appeal is filed by the appellants/original applicant. State Bank of India being aggrieved by the judgment and order dated 30th April. 2003 passed by the learned Presiding Officer of the Debts Recovery Tribunal, Aurangabad in Original Application No. 329-A/2001. By the impugned judgment and order, the learned Presiding Officer partly allowed the Original Application with proportionate costs and ordered the defendant Nos. 1 to 7 to jointly and severally pay to the applicant Bank certain amount of Rs. 18,49,913/- as mentioned in serial No. 2 of the operative portion of the order with interest at the simple rate of Rs. 6% per annum from 1st August, 1993 onwards till date of filing of the suit. The learned Presiding Officer also ordered the defendant Nos. 1 to 7 to jointly and severally pay future interest to the applicant Bank on the said amount at the simple rate of Rs. 6% per annum from the date of the suit till realization of the amount. The Bank is aggrieved because simple rate of interest at the rate of Rs. 6% per annum was awarded by the learned presiding Officer. Hence, the appeal to that limited extent.
(2.) I have heard Mr. Nasikwala for the appellant Bank. The respondents are absent though they appear to have been duly served. I have gone through the entire proceedings and in my view, the learned Presiding Officer was correct in awarding pendente lite and post-decree interest at the rate of Rs. 6% per annum.
Few facts, which are required to be stated are as follows:
The respondent No. 1/defendant No. 1 S.S. Plastics Industries is a firm carrying on business of manufacturing P.V.C. pipes etc. in the factory situated at M.I.D.C. Industrial area, Waluj. The defendant Nos. 2 and 3 are the partners of this firm. One deceased Shyam Manjrekar was also a partner of defendant No. 1 firm who is represented now through his legal representatives namely Satischandra Manjrekar, who has been joined as defendant No. 4 in the proceedings when the suit was filed in the Civil Court. The defendant Nos. 5 to 7 are permanent residents having then-agricultural lands at Nipani situated within district Aurangabad and they are guarantors for the loan liability of the defendant Nos. 1 to 4. The Bank granted various credit facilities and accommodation by way of term loan, working capital and equity funds to the defendant No. 1, who approached the Bank through its partners. This was for the purpose of their manufacturing business of the P.V.C. pipes etc. Accordingly, the applicant Bank sanctioned medium term loan of Rs. 34.80 lacs for construction of factory at the interest rate of 4% below S.B. advance rate of subject minimum 12% p.a. with quarterly rests and subject to change as per the advance rate prescribed by RBI from time to time. Working capital of Rs. 2.6 lacs and equity fund of Rs. 1,00,000/- also was sanctioned as per sanction letter dated 2nd August, 1989. Accordingly, security documents were executed by the defendant Nos. 2 and 3 and deceased defendant No. 4 as a principal borrower and the defendant Nos. 5 to 7 as guarantors. Usual hypothecation agreement was entered into, so also for the term loan, registered mortgage of land and factory-building and hypothecation of machinery and equipment was also executed by the defendant Nos. 1 to 4. The properly of guarantor/defendant No. 7 was also given by way of registered mortgage. Necessary permission from M.I.D..C. was also obtained by the defendant Nos. 2 to 4 for executing the mortgage of the land, building situated within M.I.D.C. area. The defendant No. 1, through its authorized persons enjoyed the loan facility by withdrawing necessary amounts from the applicant Bank. However, the working capital equity fund amounts could not be advanced and disbursed for want of progress of work and completion of formalities. The equity fund of Rs. 1,00,000/- was cancelled. Progress of the construction of the installation of machinery was very slow.
In due course of time, the defendant No. 1 through its partners confirmed the balance of medium term loan account by executing confirmation of balance letter on 12th August, 1993, 8th December, 1994. 30th June, 1995 and 20th May, 1996 for the outstanding on the dates mentioned above and had acknowledged the liability of the loan and repayment of the loan amount. The defendants, however, failed to repay the amount and their account became Non Performing Assets in June 1995, so the interest could not be debited since after 1st July, 1995 onwards till filing of the suit. It is the Bank's case that as the defendants failed to maintain the financial discipline to repay the amount, the Bank was constrained to recall the amount and its interest. The defendants however failed and neglected to regularize the account and repay the amount. The demand notices and reminders were issued and ultimately, suit came to be filed by the Bank for recovery of the amount of Rs. 26,30,903.51 as outstanding upto 30th June, 1995 and accrued but not charged and debited interest of Rs. 5,68,361.49 from 1st July, 1995 to 11th August, 1996 and notice charges of Rs. 500/-.
It is further the case of the Bank that the defendant No. 1 through its partners had approached the Bank for change of location and for additional finance and further time for repayment of the loan. Though the defendant Nos. 2 to 4 and 5 to 7 executed revival letters and acknowledgements, considering the financial position of the defendants and working of the defendant No. 1 unit, the Bank found that unit of defendant No. 1 was not a viable unit and therefore, the Bank had called the defendants to liquidate the same amount, the defendants however, failed to do so. Therefore, a legal notice on 7th August, 1996 through advocate was issued and thereafter suit was filed. Thus, the suit was for recovery of Rs. 31,99.765/- and future interest at the rate of 18.25% per annum with quarterly rests.
(3.) THE defendant Nos. 1 to 3 filed their written statement in the Civil Court itself. THE defendant Nos. 5 to 7 failed to appear though they were duly served. Hence, ex pane, order was passed against them on 16th January, 1998. THEreafter mutter was transferred to D.R.T. Accordingly, transfer notices were sent to the defendants and at that stage, the defendant Nos. 1 to 3 and 5 to 7 appeared through their advocate. THE defendant No. 4 was already on record as defendant No. 3. No written statement order was set aside on the payment of costs.;