SYNDICATE BANK Vs. INDIA MACHINERY CORPORATION

JUDGEMENT

(1.) THE appellant Bank filed the application for recovery of Rs. 10,54,443.40 p. THE respondent defendants 1 and 2 remained absent and they were set ex parte. THE 3rd defendant filed a statement contending that he is not liable and he is not a proper and necessary party and in respect of him no liability has arisen during the course of the business activity and he is not liable for the suit claim.

(2.) The 3rd defendant is the Manager of the Bank and he was in charge of the day-to-day administration of the Bank. The 2nd defendant, a close associate of the 3rd defendant, pressurized the 3rd defendant to commit certain irregularities and the 3rd defendant committed certain fraud in collusion with the customers of the applicant Bank and on 5.6.1992, LD 265/92 for Rs. 5.60 lakhs was arranged against the deposit of VCC Nos. 3528 and 3529 for Rs. 5.00 lakhs each standing in the name of Smt. Venkatamma and Mr. Chikke Gowda and these deposits were to mature on 18.5.1993 and the proceeds of LD 265/92 was credited to CA 643 of M/s. India Machinery Corporation, the 1st defendant who was not connected with the deposits and on the same day a sum of Rs. 5.60 lakhs was transferred from CA 643 to CA 585 of the 2nd defendant and the said LD was authorized by the 3rd defendant. The depositors Smt. Venkatamma and Mr. Chikke Gowda having availed the LD requested to refund the deposits which became due on 18.5.1993 and the deposits were refunded to the depositors on the satisfaction of the applicant about the genuineness of the claim and the LD documents are not available with the applicant Bank and they appeared to have been destroyed,

(3.) AGGRIEVED against that order the appellant Bank has come forward with this appeal. Counsel for the appellant Bank submitted that the defendants 1 and 2 are the beneficiaries of the amount drawn from the Bank and they are the debtors within the provisions of the RDDB&FI Act, 1993 since they are due to the Bank the amount claimed in this suit and the DRT, Bangalore, has got jurisdiction to try this application and the return of the application is erroneous. The significant factor is that the defendants 1 and 2 remained absent and they were set ex parte. The 3rd defendant employee of the Bank alone is the contesting party. Since the defendants 1 and 2 availed the facility and they are the beneficiaries of the amount drawn from the Bank they are liable to pay the claim amount to the Bank. The amount they have drawn clearly falls within the definition of 'Debt' under the provisions of the Act. The respondents 1 and 2 who have availed the benefit of the amount drawn from the Bank clearly come within the provisions of this Act. They did not contest the claim and they are ex parte. So they are liable to pay the suit claim to the plaintiff Bank.