CHATURVEDI HOLDINGS P LTD Vs. VYSYA BANK LTD

JUDGEMENT

(1.) COUNSEL for the appellants submits that the jurisdiction for this case lies within the Bombay DRT and not the Bangalore DRT, since the defendants are residents of Bombay and they have availed the loan at Bombay and the Bangalore DRT has no jurisdiction to entertain this case and since jurisdiction of the Court is under dispute the appellant is not liable to pay any amount and the appellant is entitled for waiver under Section 21 of the Act. He further submits that the appellant also gave shares as security to the Bank given absolute right to the Bank to sell the shares in case there is any default but the Bank do not sell the shares and till now the Bank is keeping the shares and by not selling to shares in time the appellants have also sustained loss and even on this ground the appellants are entitled for waiver under Section 21 of the Act. The third point argued to the COUNSEL for the appellants is that the waiving of interest to 19% per annum arbitrary and the appellants are liable to pay only a lesser rate of interest and the interest charged is also exorbitant and on these grounds the appellants are entitled for waiver under Section 21 of the Act.

(2.) Counsel for the respondent Bank submits that the loan was sanctioned at Bangalore and all the documents were executed at Bangalore and the loan was availed at Bangalore and the Bangalore Court alone has got jurisdiction and the order passed by the Presiding Officer, DRT, Bangalore, is perfectly justified and it does not warrant any interference on the point of jurisdiction. He further submitted that with regard to the pledged shares, the appellant gave the shares to the Bank for selling but the appellant sent letter Ex. A-22 dated 4.11.1.994 in which the defendants requested the Bank not to proceed with the sale of the shares and it was also made clear in the letter that the very sale should be the last resort. The appellant also wrote another letter Ex. A-24 dated 21.6.1995 seeking accommodation without taking any untoward action in that matter, indirectly suggesting not to proceed with the sale of the shares. Ex. A-14 is a letter addressed by the applicant Bank to the Company Secretary of ATV Projects India Ltd., to convert the shares into marketable lots and to issue new share certificates and this was done by the Bank with the intention of selling of the shares. The defendants sent letter Ex. D-13 on 9.8.1997 authorising the Bank to sell the shares and recover the dues and pay the balance to the defendants but since the shares were not in a marketable lot, the Bank did not proceed with the sale and only after the suit was filed, the defendants converted the shares into marketable lots and they sent the same with its certificates through their letter dated 2.3.1998.

(3.) FROM the submission made by the Counsel for the respondent Bank and the finding of the Presiding Officer, DRT, it is prima facie evident that the shares could not be sold in time because the appellants prevented the Bank from selling the shares by sending the letter Ex. A-22. Counsel for the appellants submitted that the Bank was at liberty to sell the shares and even though the defendants wrote letter to the Bank not to sell the shares the Bank is not bound by that letter and the Bank was entitled to sell the shares but the Bank did not choose to do so and they were negligent in not selling the shares in time and thus the appellants are entitled for the waiver. It is seen from the documents that the appellant only wrote to the Bank not to sell the shares and because of the letter written by the appellant to the Bank, the Bank did not sell the shares and now the Bank should not be blamed for that. Moreover, it is also not open to the defendants to contend that the Bank could have sold the shares at the proper time even though the defendants sent letter to the Bank not to sell the shares. So, the arguments advanced on this aspect by the Counsel for the appellants does not hold good.