- (1.) The appellant herein was the plaintiff in Civil Suit No. 398 of 2000. He approached the Court complaining mis-appropriation of fixed deposit amount by the respondent bank, which was offered as collateral security by the father of the appellant, that is, Mr. Navrang Rai Lohia. According to the appellant, the defendant No. 2 herein, that is, the respondent-defendant No. 2 herein, approached the first respondent bank for financial assistance in respect of Ad-hoc Export Packing Credit limit of Rs. 16 Crores and credit facility and the consortium agreement limit of Rs. 9.80 Crores (Export packing of Rs. 3.90 Crores plus Export Bill Discounting for Rs. 5.90 Crores). It is also admitted that such collateral security was towards non-refund facilities to the extent of Rs. 5.50 Crores as well. It is their contention that a bank guarantee was also executed by the first respondent bank in favour of Customs and Central Excise authority towards the obligations of the defendant No. 3 before the Learned Single Judge.
(2.) It is contended on behalf of the appellant that at the request of the second defendant borrower, Late Navrang Rai Lohia pledged his NRE term deposits value of Rs. 15,33,88,279/- with the first respondent bank for creation of the collateral security towards credit facilities offered to four companies, that is, 1) M/s. Uniworth Limited, formerly Woolworth (India) Limited, 2) Queowrth India Limited, 3) Aditya Shroff, and 4) M/s. Texprint Overseas Limited.
(3.) According to the appellants, there was express undertaking and declaration by Late Navrang Rai Lohia that the aforesaid collateral security by NRE term deposit was only towards specific and exclusive loans limiting them only to the above Rs. 4 Crores and the transaction referred to. The security was way back in 1996 and after the maturity of the NRE term deposit the loan automatically stood extinguished. As could be seen from October, 1999 onwards, there seems to be other financial assistance after liquidation of 1996 loan amount.;