- (1.) The appellant, Industrial Investment Bank of India Limited ("IIBIL" for short), is the successor of the Industrial Reconstruction Bank of India ("IRBI" for short) constituted under section 3(1) of the Industrial Reconstruction Bank of India Act, 1984, ("the 1984 Act" for short).
(2.) In the year 1985, the IRBI had sanctioned a loan of rupees twenty two lakhs (Rs.22,00,000/-) in favour of M/s Jain Cables Pvt. Ltd., respondent no.1. Out of the sanctioned amount a sum of rupees twenty lakhs (Rs.20,00,000/-) was actually disbursed in the year 1991 and the balance amount of the loan was cancelled. The repayment of the loan was secured by mortgage of the immovable properties of the borrower company and by creating the charge of hypothecation over its immovable properties in favour of the IRBI. The borrower company defaulted in repayment of the loan and in 1994, on its request, the IRBI granted to it an amended schedule of payment under which the last installment of the loan amount was to be paid on February 15, 1996. The respondent no.1 did not adhere even to the rescheduled payment plan.
(3.) On March 27, 1997, the Industrial Reconstruction Bank (Transfer of Undertaking and Repeal) Act, 1997 ("the 1997 Act" for short) came into force and by virtue of notification, S.O. 242 (E), dated March 25, 1997 the undertakings of the IRBI were transferred to and vested in the IIBIL with effect from March 27, 1997.;