Decided on July 05,2006



K.J.Paratwar, - (1.) THE borrower company (defendant No. 1), its directors (defendant Nos. 2 and 3) as guarantors and mortgagors (defendant Nos. 3 and 4) are sued in this O.A. for recovery of Rs. 74,98,603.68 being dues under Cash Credit Facility/L.C. Paid Account with interest @ 15.50% p.a. with quarterly rests from the date of the filing of the Original Application till payment and/or full realisation.
(2.) The applicant's short case is that on or about 9.10.2000, it had on the request of the 1st defendant sanctioned Cash Credit Limit of Rs. 50 lacs on guarantee by the defendant Nos. 2 and 3 and equitable mortgage of Flat No. A/2/301, Happy Valley, Phase No. I Co-op. Housing Society Ltd., Manpada, Thane (Wcst)-400607. The borrower executed demand promissory note, agreement of hypothecation and usual security documents; the guarantors gave letter of guarantee; the mortgagors deposited title deeds with intention to create security. The defendant No. 1 availed of the facility. At its instance letter of credit for GBP $ 20,000/- in the name of M/s. Aor Tech Europe Limited was opened. The beneficiary drew bill of exchange dated 19.3.2002 thereunder for the amount of letter of exchange. The applicant accepted the bills and undertook to make payment on due date. However, no payment was made even after the defendant No. 3 had by letter dated 4.2.2003 promised to arrange for Rs. 11.67 lacs being the amount of devolved L/C. Thus, the account became N.P.A. The applicant had then consequently issued notice dated 11.1.2003 under Section 13(2) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 calling upon the defendant Nos. 2 to 4 to make the payment. By letter dated 3.3.2003, the defendant No. 3 suggested for compromise/settlement but did nothing. Therefore, this O.A. is filed.
(3.) VIDE prolix and repetitive written statement (Exh. 54), the defendant No. 2 has disowned the liability. However, the execution of letter of guarantee is not denied but it said that the guarantee was for a restricted period. This defendant has contended that the 1st defendant company was formed in 2000 in which he and the defendant No. 3 had 50% share. The defendant No. 4 was looking after the company on behalf of the defendant No. 3 and was responsible for the marketing. It is contended that he was participating in the affairs of the company till June 2002 whereafter he ceased to have control over the company. The defendant No. 3 mismanaged the affairs and management of the company. The defendant No. 4 committed fraud. He formed another company and carried on business in that name by selling goods of the borrower company itself. The defendant contends that he had repeatedly requested the officers of the applicant Bank to take immediate action and seize the unsold material worth Rs. 55 lacs. But the officer did nothing. This defendant states that since he became ill during June-July 2002 he was required to go to his native place Shrinagar (Kashmir) and stayed there for nearly 3 months whereafter the aforesaid facts came to his notice. The defendant had, therefore, filed criminal complaint with police under Sections 403, 406 and 420 of I.P.C. on 22.10.2002. But, the police did not take recognizance of the complaint taking stand that it was a civil dispute. The O.A. is sought to be dismissed on the said grounds.;

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