- (1.) Heard Mr. Ashutosh Srivastava, counsel for the petitioners and Mr. Anil Kumar, for the respondent No. 3.
(2.) The petitioners, Messrs. Lal and Kumar, is otherwise a proprietorship firm whose proprietor happens to be Heera Lal, Son of Sri Jamuna Prasad. Heera Lal, the petitioner No. 2, proprietor of the firm, aforesaid, is otherwise a contractor. His business is construction and building works. He took a loan from the Nagar Sahkari Bank Limited, Nagar Maha Palika Branch, Gorakhpur. The loan was against a cash credit limit given to him for running his business in 1989. This cash credit limit was extended to Rs. 15 Lacs. The petitioner mentions these facts in paragraph 5 of the writ petition. With a cash credit limit running to Rs. 15 lacs, the petitioner borrowed from the Bank on the basisof his credit worthiness. The Bank permitted overdrafts. While the petitioner was taking overdrafts against the cash credit limit provided by the Bank, the petitioner was slow in clearing his debts. The overdrafts remained and the Bank required the petitioner to makeup the deficit and wipe out the overdrafts. Instead of clearing the loans which he took against the overdrafts, the petitioner told the Bank that he is running another business of building and constructions as a contractor and a supplier to several government departments including the railways and certain other "different authorities" and his payments from these government departments are outstanding. What the petitioner was telling the Bank was that as soon as he receives the payment from the other Government departments against the contracts which had been assigned to him, he would discharge the overdraft against his account. Finding that the petitioner was avoiding the discharging of overdrafts, the outstandings were swelling with interest being added to the borrowings. Overdraft is a loan. When ordinary means of persuasion failed requiring the petitioner to clear the loans, the Bank took out recovery proceedings. The petitioner was faced with a recovery citation amounting to a sum of Rs. 11,93,654-00, the amount outstanding until 30/06/1993. Instead of discharging the payment or satisfying the recovery, the petitioner filed the present writ petition.
(3.) In so far as the outstandings are concerned, there is no issue and it is admitted in the writ petition. There are submissions on record and reiterated by counsel, in effect, that by law the petitioner was entitled to a notice of thirty days, before the recovery proceedings were set in motion. The attempt by the Bank to retrieve its moneys by recovery proceedings, thus, is bad.;