- (1.) By this order, we propose to decide Letters Patent Appeal Nos.594 and 409 of 2010 as they arise out of the judgement dated 5.2.2010, allowing the writ petitions in which the appellants herein were respondents. For disposal of these appeals, the facts are being taken from L.P.A. No.594 of 2010.
(2.) The brief facts of the case are that M/s Shiv Shankar Rice Mills, respondent No.1, took cash credit limit from the appellant-Bank of Rs. 100 lacs, which was later on enhanced to Rs. 130 lacs and contingency limit of Rs. 5 lacs, totalling Rs. 135 lacs by way of term loan and cash credit facility against its primary and collateral security. There had been default in due payment of the loan and the account became irregular. Respondent No.1 instead of clearing the dues, duped the appellant-Bank by disposing off the pledged stocks without the permission of the Bank and even the sale proceeds amounting to Rs. 1.75 crores had not been deposited with the Bank according to the stock statement dated 15.12.2002. As per the condition of the agreement, respondent No.1 could not have sold the stocks without the permission of the Bank as the same had been hypothecated with the Bank.
(3.) As the default in payment of the deals persisted, it was declared a Non-Performing Asset (for short, "NPA") on 31.03.2003. A notice was issued by the Bank on 20.6.2003 to respondent No.1 to repay the entire amount within seven days. However, instead of submitting his reply to the said notice, respondent No.1 wrote a letter dated 27.6.2003, seeking permission of the Bank to allow them to use the sheller for shelling purpose for a period of one month as a Finance Company was ready to finance their entire project. Respondent No.1 had also conveyed to the Bank that efforts were being made to raise finances from other financiers against the rice mill, which has already been mortgaged with the respondent Bank. Since the conduct of respondent No.1 was doubtful and the appellant Bank was apprehending that respondent No.1, a willful defaulter, will try to cheat the appellant-Bank did not accept the same but instead lodged a complaint dated 21.7.2003 with the Station House Officer, Safidon, Jind, for registration of FIR against respondent No.1, its partners and guarantors for theft and misappropriation etc.;