- (1.) In 1981, a loan of Rs.500 lacs was sanctioned by the ICICI Bank in favour of U.P. State Cement Corporation Ltd.(hereinafter referred to as UPSCCL), which is a corporation incorporated under the Companies Act and which was also a Government of Uttar Pradesh undertaking. In 1983, the State of Uttar Pradesh gave an unconditional guarantee for repayment of the loan. Subsequently, this Company became a sick industry and eventually, in the year 1997, BIFR recommended winding up of this Company. An appeal was filed and AIFR maintained the order of the BIFR. Eventually, the High Court issued a winding up order and appointed the Official Liquidator to liquidate the assets of the Company.
(2.) In the year 2001, ICICI Bank filed an original application under Section 19 of the Recovery of Debts Due to Banks & Financial Institution Act, 1993 (hereinafter referred to as the Act of 1993) against UPSCCL and the State of Uttar Pradesh for recovery of Rs.56.41 Crores. During its pendency, ICICI Bank assigned its rights for recovery of the amount to Kotak Mahindra Bank Ltd., who were accordingly, substituted. It transpires that inspite of a notice being issued, the State of Uttar Pradesh did not contest the matter and the Debts Recovery Tribunal proceeded ex parte against the State of Uttar Pradesh. On 6th December, 2006, the Debts Recovery Tribunal allowed original application directing recovery of the amount from UPSCCL. For facility, the operative portion of the order is extracted hereunder:- "It is therefore, ordered:-
(3.) That the original application no.291 of 2001 of the applicants-ICICI Ltd. and Kotak Mahindra Bank Ltd., for issuance of recovery certificate to the tune of Rs.56,41,37,770.00 (Rs. Fifty Six Crores Forty One Lacs Thirty seven Thousand Seven Hundred Seventy only) together with pendentelite and future interest @ 12% per annum with half yearly rest is allowed with cost on contest against the defendant no.1 now represented by the Official Liquidator and dismissed on contest against defendant no.4 (IFCI), defendant no.6 (Allahabad Bank) and defendant no.7 (State Bank of India) and disposed of ex parte against the defendant no.2 and dismissed against defendant no.3 (IDBI) and defendant no.5 (LIC). The applicant bank is entitled the said interest from the date of filing of the application till the full recovery is made through the Official Liquidator appointed by the order of the Hon'ble High Court.";