DIAMOND AND GEM DEVELOPMENT CORPORATION Vs. KARNATAKA STATE FINANCIAL CORPORATION

JUDGEMENT

(1.) THE appellant filed IA-II before the DRT, Bangalore for disposal of the Original Application (OA) as not maintainable. That IA was dismissed by the Tribunal by Order dated 30.4.2001. Aggrieved against that Order the appellant has preferred this appeal.

(2.) The appellant contends that the Term Loan facility and Working Capital facility granted to several individual beneficiaries ought to have been identified by Government of Karnataka and the applicant Karnataka State Financial Corporation (KSFC) and the amount of loan granted to each beneficiary is in the order of Rs. 25,000/- which is towards the machinery and the working capital and each loan transaction in respect of individual beneficiary is a distinct and different loan transaction and admittedly none of the beneficiaries are made parties in the OA nor the documents executed by various beneficiaries in respecl of the individual loan transactions have been produced before this Tribunal and no loan documents executed by the defendant in favour of the applicant and the defendants only supplied the machineries to the beneficiaries as per the term loan sanctioned to it and the working capital amount was also received on behalf of the beneficiaries and the ultimate liability as per the documents produced by the applicant vests with the beneficiaries and so the OA itself is not maintainable. It is further contended that the individual transaction is only around Rs. 25,000/- and the amount granted under each loan is far less than Rs. 10 lakhs and so the DRT has no jurisdiction to entertain that OA and it is barred by Rule 10 of the DRT Rules, 1995 and DRT has no jurisdiction to entertain the OA and so the OA filed by the applicant has to be dismissed as not maintainable.

(3.) COUNSEL for the appellant submitted that no loan document was executed by the defendant to KSFC and all the loan documents were executed by the beneficiaries and the loan transactions are individual transactions with the KSFC by the beneficiaries and the defendant never executed any loan document with KSFC and the defendant is not liable for the Suit claim and the OA filed by the applicant has to be dismissed as not maintainable and so the IA-II filed by the defendant has to be allowed. COUNSEL for the appellant further submitted that the defendant only supplied the machineries to the beneficiaries and for those machineries only the KSFC paid the Cheque on all the individual loan transactions and there is no contract with regard to the payment of the loan amount granted to the beneficiaries by the defendant. He further submitted that no documents pertaining to the grant of loan has been filed by the KSFC and the documents filed by KSFC do not reveal with regard to the sanction of the loan and the loan transactions are only individual transactions and all the loan documents are inter se between the KSFC and the individual beneficiaries and since the loan documents were not executed by the defendant, the defendant is not liable for the Suit claim. COUNSEL for the appellant also drew my attention to the list showing the sanction amount to the individual beneficiaries and COUNSEL for the appellant emphatically contends that the loan was sanctioned by the KSFC for individual beneficiaries only and the sanction amount is Rs. 25,000/- for each of the beneficiaries and the loan was sanctioned on 30.12.1993 to the beneficiaries mentioned in the list and with regard to the loan transaction the defendant does not come in the picture at all and the defendant is not at all liable for the Suit claim and the OA filed against the defendant has to be dismissed as not maintainable.