Decided on March 17,2005



K.J.Paratwar, - (1.) THIS is an application for recovery of Rs. 41,71,08,481.03 together with further interest thereon @ 17% p.a. with quarterly rests from 3.7.1998 till payment and/or full realisation.
(2.) The Borrower Company (defendant No. 1) was engaged in the manufacture of Iron and Steel Billets/Rods. The defendant Nos. 3, 4, 7 and 8 have been sued as Guarantors while the defendant No. 2 (since deceased during the pendency of the O.A.) and the defendant Nos. 5 and 6 are sued as Legal Representatives of the late Shri B.D. Aggarwal, Chairman of the defendant No. 1 company who was also a guarantor. The defendant No. 1 was the applicant Bank's constituent since 1975 and some time in 1988 enjoyed following credit facilities. JUDGEMENT_711_TLDR0_20050.htm The facilities were granted against personal guarantee by the above referred defendants. In lieu thereof, the 1st defendant executed Demand Promissory Note, Agreement of Hypothecation and usual security documents. On or about 30th March, 1991, the defendant No. 8 executed guarantee agreement for Rs. 1125 lacs. The defendant No. 8 by the said agreement, also agreed to create mortgage of 18 shop premises on the 1st floor in the "C" Wing of Vashi Plaza situated at Plot Nos. 80, 81 in Sector 17, Vashi, New Mumbai, admeasuring about 8,000 sq.ft. in favour of the applicant. The defendant No. 1 enjoyed all the facilities.
(3.) THE 1st defendant ultimately became sick unit and its reference was registered by B.I.F.R. on 22.7.1991. THE 1st defendant suspended its manufacturing activities in August 1991. Efforts to review the 1st defendant proved futile and B.I.F.R. ordered the company to be wound up vide its order dated 17.10.1994. THE 1st defendant's appeal against the said order came to be dismissed on 21.3.1996. THEreafter the applicant through its advocate's notice dated 11.6.1998 called upon the defendants to pay the entire outstanding with interest aggregating to Rs. 3,591.06 lacs as on 31.3.1998 with further interest. As no payments were made this O.A. has been filed for recovery of money (not clarifying how the claim has gone up by about Rs. 6 crores in 6 months or so) and as also for direction to create mortgage of the above referred shop premises. In the next breath surprisingly, declaration that the shops are mortgaged is also sought.;

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