STATE BANK OF INDIA Vs. RIZVI EXPORTS LTD

JUDGEMENT

(1.) ORIGINAL Application No. 6 of 2000 was filed under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for recovery of Rs. 1,89,38,751 44 (Rs. one crore eighty-nine lakhs thirty-eight thousand seven hundred fifty-one and paise forty-four) only against the defendant Nos. 1 to 6 who are joint ly and severally liable to repay the Bank's dues together with interest thereon @ 16.83% per annum with quarterly rests in respect of debts due in the Cash Credit (Hypothecation) and EPC accounts and @ 20% per annum with quarterly rests in respect of the debts due in the FBP Account. The applicant-Bank has also claimed the recovery of this amount through the sale of the hypothecated goods and immovable properties equitably mortgaged with the applicant-Bank. A cost of the suit has also been claimed. The said suit has been received on transfer under operation of law in this Tribunal and re-numbered the case as T.A. 1593 of 2000.

(2.) The facts of the case as contained in the application are that the applicant-Bank is a body corporate constituted under the State Bank of India Act, 1955, having its central office at Mumbai and one of its Local Head Offices at Lucknow and inter alia a Branch known as Overseas Branch, Kanpur Nagar. The Assistant General Manager and Principal Officer Mr. G.D.S. Banga of the said branch is duly conversant with the facts of the present case and is duly authorized by a Power of Attorney to verify and sign the plaint on behalf of the plaintiff-Bank.

(3.) THE defendants accepted the terms and conditions contained in the agreement letter dated 31.12.1996 and the Board of Directors of the defendant No. 1 by virtue of resolution passed in a meeting of Board of Directors held on 01.01.1997 resolved and gave consent and allowed the defendant No. 1 to borrow from the applicant-Bank various credit facilities to the tune of Rs. 200.00 lakhs secured by hypothecation and pledge of entire goods, movable and other assets, present and future holding documents of title to goods, book debts, outstanding moneys, receivables, by way of first charge and create second charge on the fixed assets of the defendants and personal guarantee of the defendant Nos. 2, 3, 4 and 5 and corporate guarantee of defendant No. 6. THE rate of interest was also agreed in between the parties as per the Reserve Bank of India directives from time-to-time.