ICICI BANK LTD Vs. PREMIER HOUSING AND INDUSTRIAL ENTERPRISES LTD

JUDGEMENT

(1.) THE applicant Bank has filed this Original Application against the defendant for recovery of a sum of Rs. 2,44,73, 270/- (rupees two crores forty-four lakhs seventy-three thousand two hundred and seventy only) together with interest @ 23.50 % p.a. from the date of application till the date of realisation. THE applicant Bank has also pray for cost of the proceedings and for other reliefs in order to render justice.

(2.) (a) It is the case of the applicant Bank that the defendant is carrying on business in building constructions and development of properties. The defendant approached the applicant Bank on 16.5.1997 with a request to subscribe for redeemable non-cumulative non-convertible preference shares of the defendant company to the tune of Rs. 3 crores to augment the working capital requirement and in this regard submitted a proposal along with executive summary of the defendant company.

(3.) IN order to establish its case, the applicant Bank has filed Proof Affidavit of its Manager, Shri S. Ramaswamy, who has confirmed the averments made by the applicant Bank in the OA and as described in precise in the proceeding paras of this judgment. The applicant Bank has further filed original documents pertaining to the share certificates purchased by the applicant Bank from the defendant company time-to-time to substantiate its OA claim. Apart from this, it can be seen that the applicant Bank purchased the above said shares on the request of the defendant company vide defendant company's letter dated 2.6.1997. Thus it can be seen that the Bank has granted a financial assistance to the defendant company by way of purchasing preference share certificates from time-to-time. This fact is not disputed by the defendant company as the defendant company has failed to file any counter to the OA or counter proof affidavit or has filed any rebuttable documents in this Court. Moreover, the defendant company, by its letter dated 16.5.1997, wrote to the applicant Bank by giving an offer for purchasing of non-convertible redeemable preference shares wherein the D1 company has stated that the defendant company has been promoted by professionals in association with established Civil Construction Company and the company has ever since its public issue in 1990 has made significant strides in terms of growth, profitability and has uninterrupted dividend track record. The defendant company has also shown in this letter its financial highlights and profit of the company in order to pursue and mobilise the applicant Bank for purchase of said shares. Believing this offer, the applicant Bank acted bona fidely and purchased the said shares. But later on, the defendant company failed to keep its promise or to pay the dividend or to redeem the said share certificates. Hence, the present litigation.