BANK OF BARODA Vs. TEGS MUSRADO LTD
LAWS(DR)-2005-11-6
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on November 29,2005

Appellant
VERSUS
Respondents

JUDGEMENT

Motilal B. Naik, J. (Chairman) - (1.) THE appellant-bank instituted suit in O. A. No. 511 of 2000 before the Debts Recovery Tribunal (DRT), Chandigarh, for recovery of certain amounts. On the basis of pleadings and evidence, the Tribunal by order dated January 13, 2005, dismissed the suit claim of Rs. 2,33,59,138 in TL-I, Rs. 1,14,29,922 in TL-II and Rs. 1,07,18,243 holding that these claims are barred by limitation. However, by the same order, the Tribunal directed to proceed for recovery of Rs. 3,87,50,236 claimed as interest on the bank guarantee invoked and further directed for fixing the case on February 28, 2005, for arguments for recovery of aforesaid amount. It is this order which is under challenge before this Tribunal.
(2.) Mr. Ashok Jagga, learned Counsel for the appellant-bank mainly contended that the Tribunal has committed an error in dismissing the suit on three counts. According to learned Counsel, the claim of the applicant-bank is secured by equitable mortgage of four properties of the defendants. Initially, a consortium of three banks, namely, Bank of Baroda, Syndicate Bank and UCO Bank had advanced loan facilities to the defendants. The claim of the Syndicate Bank and UCO Bank have been satisfied in toto whereas the claim of the appellant-bank, i.e., the Bank of Baroda was not accepted. Counsel stated the finding recorded by the Tribunal is contrary to the pleadings of the defendants and drew my attention to paras. Nos. 1 and 2 of the plain pleadings. Counsel also drew my attention to the corresponding reply in the written statement filed by the defendants. It is alleged that the letter dated April 3, 1995, written by the defendants had not been taken into consideration by the Tribunal for the purpose of considering limitation in the claims of the appellant-bank. He also drew my attention to Section 19 of the Limitation Act, 1963, and stated, the last correspondence dated April 3, 1995, is material for the purpose of counting the period of limitation. Counsel also stated as per the agreement in terms of letter dated March 29, 1995, though the appellant-bank did not receive any amount, but however, by letter dated April 3, 1995, the defendants deposited certain amounts which are kept in "no lien account" and as such, this letter should have been taken into consideration for the purpose of limitation. Counsel further stated that as per the provision of Order XXXIV, Rule 2 of the Code of Civil Procedure, in a suit for enforcement of mortgage, the period of recovery is 12 years and as such, since the properties are mortgaged, the Tribunal could not have held that the period of limitation is of three years and the suit is hit by limitation. Counsel also stated, in their statement of account submitted as evidence, when a few entries dated December 12, 1994, December 13, 1994 and March 31, 1994, had been placed before the Tribunal, the Tribunal should not have ignored these entries in examining whether the suit claim is within limitation. The suit is filed in the month of March, 1997, and each of these entries in the statement of account, would bring the suit within limitation and therefore, stated this factor has also been ignored by the Tribunal. Counsel finally contended that the Tribunal has committed a great error in rejecting the suit on the ground of limitation and pleaded allowing the appeal. Though there are ten respondents in the appeal, however, Mr. Kamaljeet Singh appears on behalf of respondents Nos. 1 to 8 who are the contesting parties. Respondents Nos. 9 and 10 are only pro forma parties and none appeared on their behalf. According to learned Counsel for the respondents, the letter dated November 25, 1994 is the offer by the appellant and was accepted. However, by letter dated April 19, 1995, new conditions are imposed and as such, the Tribunal having regard to the facts of the case held that the suit is hit by limitation. Counsel also stated that in the pleadings by the appellant-bank, the entries in the statement of account which are referred to by the appellant are not found as a ground on which basis the cause of action against these respondents could be invoked nor was there any whisper before the Tribunal at the time of making submissions on this aspect. Counsel stated even though the appellant filed the statement of accounts, it is for them to pinpoint to the court and bring to the notice of the court the entry which brings the suit within limitation. Mere marking of documents would not help the appellant to say that the suit is not barred by limitation. Exhibiting documents is subject to relevancy and proof. As long as these entries are not proved by way of evidence, the appellant cannot now raise new grounds before this Appellate Tnbunal. Counsel also drew my attention to the written statement filed by these defendants where a specific stand has been taken about the suit being hit by limitation and stated, the suit is only for recovery of money and not a suit for enforcement of mortgage and therefore, the plea of period of limitation of 12 years cannot be accepted. While making this submission, counsel also drew my attention to a decision of the Debts Recovery Appellate Tribunal, Mumbai, in Kishor Kumar Agarwal v. State Bank of India [2000] II BC 97 (DRAT) wherein the Presiding Officer of the Debts Recovery Appellate Tribunal, Mumbai, has discussed the scope of Sections 17 and 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and the provisions appearing under Order XXXIV of the Code of Civil Procedure. Counsel pleaded dismissal of the appeal on all these counts.
(3.) ON the basis of submissions by both counsel, the point for consideration is whether the impugned order is sustainable. The Tribunal has considered the facets of contentions and recorded the findings in the following manner. In para. 3 of the order, the Tribunal recorded that the applicant-bank sanctioned certain credit facilities to the defendants on January 11, 1990, which are cash credit hypothecation of Rs. 45 lakhs, sub limit (BP clean) for Rs. 6 lakhs, sub limit (BP documents) for Rs. 6 lakhs and term loan of Rs. 58 lakhs. Thereafter, the limits were enhanced on October 5, 1990, which are as follows : (i) Term loan : enhanced from Rs. 58 lakhs to Rs. 396 lakhs. (ii) CC hypothecation : enhanced from Rs. 45 lakhs to Rs. 72 lakhs. (iii) Sub limit-- (a) Packing credit-cum-foreign bill purchase Rs. 55 lakhs ; (b) Bill documents (inland) for Rs. 5 lakhs (fresh) ; (c) Bills documents (letter of credit for import of raw material) Rs. 15 lakhs (fresh) ; (d) Foreign letter of credit for import of plant and machinery DFL Rs. 19.72 lakhs Dutch guilders.;


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