CENTRAL BANK OF INDIA AND ANR. Vs. TESTEELS LTD. AND ORS.
LAWS(DR)-2005-3-18
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on March 11,2005

Central Bank Of India And Anr. Appellant
VERSUS
Testeels Ltd. And Ors. Respondents

JUDGEMENT

Pratibha Upasani, J. (Chairperson) - (1.) BOTH these appeals can be conveniently disposed off by this common judgment and order as they arise from the same judgment and order, parties are same and issue involved is also the same. Appeal No. 30 of 2004 is filed by the appellants/original applicants Central Bank of India and Canara Bank being aggrieved by the judgment and order dated 4th November, 2003 passed by the learned Presiding Officer of D.R.T., Ahmedabad in T.A. No. 568 of 1995 in civil suit No. 70 of 1992. Appeal No. 31 of 2004 is filed by the appellants/original applicant Central Bank of India being aggrieved by the judgment and order dated 4th November, 2003 passed by the learned Presiding Officer of D.R.T., Ahmedabad in T.A. No. 567 of 1995 in Civil Suit No. 69 of 1992. For the sake of convenience, facts are taken from the appeal No. 30 of 2004.
(2.) THE appellant Central Bank of India and Canara Bank, at the request of the defendants agreed to provide general credit facilities aggregating to Rs. 6,00,00,000/ - in the ratio of 50:50 to the defendant No. 1. The details of break -up of the credit facilities sanctioned Bank -wise are given in para 7 page No. 3 of the suit. Besides general credit facilities, the appellant Banks agreed to provide diverse credit facilities aggregating to Rs. 15.35 crores to the defendant No. 1 for execution of the export order No. 4472 received by it from National Electricity Board of the State of Malaya, Malesia. As per the consortium agreement various facilities like cash credit facility, inland documentary bills, packing credit facility, (performance and other guarantee facility) etc. were also granted by the appellant Banks, which were availed by the defendant No. 1 Testeels Limited. The defendant No. 2 Dr. S.K. Somaiya and defendant No. 3 Mr. Kamal Morarka were the directors of the defendant No. 1 company, who had both personally guaranteed repayment of the advance made by the appellant Banks to the defendant No. 1 company. The defendant No. 1 company acknowledged indebtedness towards appellant Bank. The appellant No. 2 called upon the defendant No. 1 and its directors vide its advocate's notice dated 18th June, 1990 to repay the outstanding dues under various facilities granted by it and further served notices of demand dated 13th February, 1992 through its advocate. However, the defendant Nos. 2 and 3 had neither cared to give any reply nor to comply with the requisition. Therefore, the Original Application came to be filed in the City Civil Court, Ahmedabad for recovery of their dues from the defendants. After establishment of the D.R.T., Ahmedabad as per the provisions of the RDDBFI Act, 1993, suits came, to be transferred to the D.R.T., Ahmedabad under Section 31 of the Act. All the three defendants appeared and filed their written statement denying contentions of the Banks. The learned Presiding Officer after hearing both the sides allowed the claim of the applicant No. 1 Central Bank of India in T.A. No. 568 of 1995 and ordered the defendant Nos. 1 to 3 to jointly and severally pay to the Banks a sum of Rs. 6,95,54.016.73 alongwith costs and further interest at the rate of 12% per annum from the date of filing of the suit till realization. The learned Presiding Officer allowed the claim of the applicant No. 2 Canara Bank and ordered the defendant Nos. 1 and 2 to jointly and severally pay to the Banks a sum of Rs. 8.54,80.214.81 alongwith coats and further interest at the rate of 12% per annum from the date of filing of the suit till realization. The learned Presiding Officer dismissed the claim of the Canara Bank against the defendant No. 3. The learned Presiding Officer also allowed the claim of the Banks in T.A. No. 567 of 1995 and ordered the defendant Nos. 1 to 3 to jointly and severally pay to the Banks a sum of Rs. 12,24,97,957.28 alongwith costs and further interest at the rate of 12% per annum from the date of filing of the suit till realization. The learned Presiding Officer further gave direction in both the matters, by his order contained in Clause No. (B) of the operative portion of the order as follows: (B) The defendant Nos. 1 to 3 are given one month's time to settle the claim of the plaintiff Bank; failing which, the plaintiff Banks may proceed to sell the hypothecated movable assets and mortgaged and other immovable properties firstly of defendant Nos. 1 & 2 and adjust the sale proceeds towards the amount due and in case of shortfall in decretal dues of plaintiff No. 1 the same be realized from the assets of defendant No. 3. This period of one month will not bar the Recovery Officer to issue demand notice.
(3.) IT is this portion of the order contained in Clause (B) which is hurting the appellant Banks. The Banks therefore, approached this Appellate Tribunal praying that Clause (B) of the operative portion of the order wherein directions was given to the Bank to proceed against the assets of the defendant No. 3 as a last resort in case there would be a shortfall in decretal dues of the appellant Banks was not in accordance with law and was void. The appellant Banks prayed that this portion of the order to be set aside.;


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