CANARA BANK Vs. KALINGA TRANSFORMERS PRIVATE LIMITED

JUDGEMENT

(1.) THE suit which has been instituted by the applicant Bank against a number of the eight defendants not only for the purpose of recovering the huge amount of Rs. 25,39,688.56 p but also for the enforcement of the mortgage as well as the hypothecated properties described respectively in the schedules 'B' as well as the annexures containing the detailed enumeration of the thirty-five lands and machineries as on March 31, 1982; which has partaken the character of a claim application after the transfer of itself being caused by the operation of law to this judicial body, has been taken up for the due consideration of itself. For the recovery of the said amount being claimed by the applicant Bank as the "due and recoverable" amount from those defendants under the different heads of the credit facilities like (a) overdraft credit facility (Rs. 11,45,579.05 p), (b) K.C.C. for a sum of (Rs. 5,04,182.51 p), (c) Produce loan (Rs. 49,501.25 p) and (d) the Bank guarantee (Rs. 40,425.75 p), the said Bank did present necessarily one plaint before the learned Subordinate Judge (First Court), Cuttack after impleading those defendants therein. Such plaint was presented under Section 26 of the Code of Civil Procedure, 1908 (Act No. V of 1908). Such suit was also meant for the enforcement of the mortgage as well as the sale of the immovable mortgage property to be covered under Order 34 of the First Schedule to the said Code.

(2.) The said suit was then instituted by the applicant Bank before the above Civil Court, because the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Act No. LI of 1993) was not brought on the statute book as apiece of legislation for the purpose of conferring the relief upon such Bank. The averments as contended in the said plaint being popularly called and known as the plaint-allegation had been able to satisfy prima facie the then trying judicial forum to issue the summons upon each of those eight defendants, out of whom the defendant No. 1 is a corporate entity. The said defendant No. 1 is not only a corporate entity, but also a close company (Palmer), because of its composition as well as the paid up share capital of itself being almost held by the members of the same family i.e. the family of Mishra, as the share-holders of the said defendant company. Out of such eight defendants, the defendant Nos. 6 and 8 were described as the minors to be represented through their natural guardian being no other than the defendant No. 5 in its plaint by the applicant Bank as the plaintiff. Those defendants made thereafter their specific appearance before the said adjudicating body; and also participated in T.M.S. No. 5 of 1989 by way of filing the different sets of written statements, one of which had been filed by the defendant Nos. 1 to 3, whereas the other had been presented by the rest. Thereafter, before the said judicial forum, one application was necessarily moved by the said applicant plaintiff Bank under the provisions laid down in Rule 5 Order 38 of the said Code.

(3.) MOREOVER, the defendants/opposite parties, while availing the suit loan, factually mortgaged their immovable properties; and also executed the deed of equitable mortgage in respect of such properties; and also executed as the condition precedent the deed of hypothecation in respect of the machineries and equipments of the factory to arrange for the security of the Bank, which is traditionally and popularly known as the movable mortgage. Thereafter, as decree would have been passed on the special contest but in substance on admission against the defendants, the petitioner could realise as of right the decretal due by way of sale of both the mortgaged and hypothecated properties. Here is also being taken into consideration the further observation of the said Court like an order or attachment before judgment is an "harshest remedy" that has been perhaps made in the background of the submission made with force by the learned Advocate, appearing for the defendant Nos. 4 to 8. In the ultimate analysis, the application presented under the aforementioned legal provisions had been dismissed by the said Court by its Order No. 57 on March 26, 1993.