STATE BANK OF INDORE Vs. G P ECONOMICAL TRADERS P LTD
DEBTS RECOVERY APPELLATE TRIBUNAL
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(1.) THIS is a transfer application under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 as arisen out of Suit No. 1169/95 initiated by the applicant State Bank of Indore against the defendant Nos. 1 to 5 for issuance of recovery certificate to the tune of Rs. 12,47,284.13 together with interest, costs and other usual reliefs.
(2.) The defendant No. 1 M/s. G.P. Economical Traders Pvt. Ltd., Kanpur Nagar carries a business of Cotton Merchants and Yarn dealers. The defendant No. 2 Sri G.P. Kothiyal and the defendant No. 3 Smt. Indu Kothiyal being the directors of the company approached the applicant State Bank of Indore, Kanpur Nagar to open a current account in order to avail demand bill purchase limit of Rs. 25.00 lacs on the ground that the company was continuing a C.D. account on and from 11.4.1998 and was already availing DBP limit from time to time. A resolution was passed by the defendant No. 1 company in this regard on 15.1.1990. Personal guarantees of defendant Nos. 2 and 3 were also secured for the availment of DBP limit of Rs. 25.00 lacs. It was also resolved that defendant No. 2 should equitably mortgage his immovable property No. 117/418, 'O' Block, Geeta Nagar, Kanpur in favour of the applicant as collateral security in granting the financial facilities.
The DBP limit was sanctioned by the applicant Bank on execution of the following documents by the defendant Nos. 2 and 3 on behalf of the defendant No. 1 company in favour of the Bank.
(i) D.P. Note for Rs. 25.00 lacs dated 17.1.1990.
(ii) D.P. Note Delivery letter for Rs. 25.00 lacs dated 17.1.1990.
(iii) Bills Purchase Discount agreement dated 17.1.1990 for Rs. 25.00 lacs.
(iv) Letter of undertaking by defendant No. 1 company not to create any further charge in respect of the property and assets dated 17.1.1990.
(v) Letter requesting for grant of the aforesaid limit of Rs. 25.00 lacs dated 17.1.1990.
(vi) A letter dated 17.1.1990 executed by defendant Nos. 2 and 3 for and on behalf of defendant No. 1 company.
(vii) Agreement for bills limit not covered by security and stocks by the guarantors, dated 17.1.1990.
(viii) A copy of the extract of the minutes of the meeting of the Board of Directors of the defendant No. 1 company dated 15.1.1990.
(ix) Agreement of guarantee dated 17.1.1990 executed by defendants Nos. 2 and 3.
(3.) THE defendant No. 2 executed an equitable mortgage of his immovable property i.e. premises No. 117/418, '0' Block, Geeta Nagar, Kanpur in favour of the applicant Bank by depositing the original title deeds on 18.1.1990 along with affidavit and a letter confirming deposit of title deed as a collateral security for repayment of dues.;
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