INDIAN OVERSEAS BANK Vs. ESSAR MACHINE WORKS LTD

JUDGEMENT

(1.) THESE two petitions are filed by Indian Overseas Bank ('the bank') under Section 614(1) of the Companies Act, 1956 ('the Act') against Essar Machine Works Ltd. ('the company') and the Registrar of Companies seeking the following reliefs :

(2.) According to Shri S. Srinivasan, Practising Company Secretary and authorised representative of the bank, the bank had sanctioned a miscellaneous cash credit limit of Rs. 5 lakhs in consideration of which the company had created a charge on 10-7-1999 in favour of the bank in respect of the company's immovable properties by way of equitable mortgage by depositing the title deeds. The company ought to have filed the particulars of the charge in accordance with the provisions of Section 125 of the Act within 30 days after the date of its creation. In the meanwhile, the bank had enhanced the miscellaneous cash credit limit from Rs. 5 lakhs to Rs. 10 lakhs in favour of the company, in pursuance of which the latter created modification to the original charge on 21-7-1997 by way of extension of equitable mortgage in respect of the company's immovable properties. The company ought to have filed the particulars of the modification of the charge made on 21-7-1997 on or before 20-8-1997. In spite of repeated requests, the company had neither filed the particulars of the charge as well as the modification with the second respondent, nor signed Form Nos. 8 and 13 forwarded by bank. Consequently, the bank was constrained to send a notice of 27-3-2000 (Annexure-1 in C.P. Nos. 11 and 12 of 2001) in accordance with Section 614(1) calling upon the company to file Form Nos. 8 and 13 with the second respondent, but the company had failed to respond to the notice of the bank. Hence, the petition.

(3.) THE company in its reply statement urged that the sanction letter dated 9-7-1997 of the bank is not addressed to the company and that though the title deeds were deposited with the bank, there was no intention on the part of the company to create any charge on the properties belonging to the company. THE company has narrated the circumstances under which the documents were deposited with the company, but without any intention to create a charge over the property as well as Form Nos. 8 and 13.