IDBI BANK LTD vs M/s Core Organics Ltd and ors on 5 June 2026

FINAL ORDER

This original application has been filed by the applicant bank on 12.08.2002 before DRT-III, Delhi and then transferred to DRT-1, Delhi under Section 19 of Recovery of Debts Due to

Banks and Financial Institutions Act, 1993 against the defendant no.1 & 2 for recovery of Rs.14,84,170/- (Rupees Fourteen Lacs Eighty Four Thousand One Hundred Seventy only) along with pendentelite and future interest @18.50% per annum with quarterly rests from the date of filing of this application till the date of its realization along with costs. The defendant no.3 has been made Performa party as separate OA has been filed against defendant no.3.

2. The brief facts of the case are that 0.A was initially filed by United Western Bank Ltd. through Sh. Madan Narhar Tambekar, AGM. Subsequently, the United Western Bank Ltd. was merged with IDBI Bank Ltd. and IDBI Bank Ltd. was amalgamated with Industrial Development Bank of India and the name has been changed to IDBI Bank Ltd.

3. The defendant no.1 and 2 opened various Inland Irrevocable Revolving LC in favour of defendant no.3 and defendant no.2 undertaken irrevocable for the payment of bills/ Hundies subject to Uniform Customs & Practice for Documentary Credit.

4. It has been submitted by the applicant bank that Inland Bills Discounting facility under LC limit of Rs.5.00 Crores (Rupees Five Crores only) on 16.10.1998 in favour of defendant no.3 being procurement agent/supplier for supply of various types of chemicals etc.

5. That in order to avail the above facilities, the defendant no.3 based on approval of Board Resolution dated 08.01.1998 executed & delivered loan documents i.e. Demand Promissory Note for Rs.5.00 crores, Agreement to Collect, purchase and/or discount bills/Hundies, Agreement of Hypothecation of

Inventories of Book Debts, Agreement to Collect all dated 16.10.1998 and Purchase and/or Discount bills/Hundies etc. dated 28.08.1999. The defendant no.3 executed Letter of Acknowledgement in respect of bill discounting under letters of Credit facility with the applicant bank on 27.09.2001.

6. The applicant bank negotiated / purchase / discounted various Usance Bills of Exchange / Hundis of different dates drawn under Inland Irrecoverable Revolving LC opened by defendant no.2 in favour of defendant no.3 and duly accepted by defendant no.1, out of which 4 bills out of number of bills submitted by applicant bank were dishonored for non-payment on respective dates as per details: LC No. Hundi No. Amount in lacs Due Date

2.50

2.50 29.12.1999

2.50 31.12.1999

2.50 22.1.2000 Hence, the defendant no.1 to 3 are liable to pay the amount of dishonored four bills along with interest i.e. Rs.14,84,170/- which was demanded from defendant no.2 which was not made on the ground that payment has not been received from defendant no.1.

7. It has been submitted that defendant no.2 failed to honor commitments made under Inland Irrevocable revolving letters of Credit and defendant no.1 under Bills of Exchange/Hundies which were dishonored. The applicant bank sent various letters requesting defendant no.2 to honor the commitments but defendant no.2 not made the payment on the ground that payment not been received from defendant no.1, neglected the same and account remained out of order along with interest at agreed rates. Ultimately, the applicant bank issued legal recall notice dated 08.07.2002 calling upon defendants to pay outstanding amount but the defendants failed to clear the dues.

8. It has further been submitted that various Bills of Exchange/Hundies drawn by various parties were also dishonored, so the applicant bank filed O.A. titled 'The United Western Bank Limited v. M/s CG Worldwide Impex Private Limited & ors. for aggregate claim of Rs.2,29,98,783/- and no relief is prayed against defendant no.3 in the present OA.

9. It has been submitted that defendant no.2 have filed their written statement before this Hon'ble tribunal submitted that Purchase Agreement executed by defendant no.1 dated 01.01.1999 mentioning that revolving letter of credit will be re- instated on expiry of 30 days for six times and the liability to pay only arises if LC is reinstated and is compliant as per agreed terms and conditions. As such, defendant no.2 is not entitled to any relief on account of non-reinstatement as per the agreed terms and conditions.

10. It has been submitted that defendant no.3 has also filed written statement and submitted that liability of the defendant no.2 is beyond question and he cannot plead any defense to refuse to pay the amounts. It has also been submitted that defendant no.3 also filed a complaint against defendant no.2 before National Commission for Redressal of disputes.

11. In order to prove its case, the applicant bank has filed its evidence by way of the documents such as Letter of Credit Sd- along with Purchase Agreement dated 01.01.1999, Letter dated 16.07.1999 for Confirming the Authority to open LC, Letter dated 22.07.1999 of Defendant no.2, Letter dated 16.07.1999 for Confirmation of Bills, Letter dated 22.07.1999 of defendant no.2 reg. Confirmation for making payment on Due Dates of Bills, Letter of Credit ILC 6/99 dated 03.08.1999 with Purchase Agreement, Letter dated 03.08.1999 for Confirming the Authority to open LC, Letter dated 04.08.1999 reg. Confirmation of L/C, Letter dated 03.08.1999 for seeking Confirmation for making payment on due dates, Letters of Defendant no.3 for Discounting Bills, Bills under LC due on 10.12.1999, 29.12.1999, 31.12.1999 and 22.01.2000 for Rs.2.50 lacs each, Letter dated 22.11.1999, 16.12.1999, 17.01.2000, 14.02.2000 & 04.12.2000 for making Payment of Bills/Hundies, Letter dated 16.03.2001 of Defendant no.1, UPC, Regd. Post Receipts & AD Cards, Statement of Dishonored Bills/Hundies and Power of Attorney marked as Exhibit AW-1/1 to Exhibit AW-1/26.

14. In view of the above facts and circumstances, this Tribunal is of the view that the defendants have failed to convince this Tribunal and this Tribunal do not find any merit and reject the contentions of the defendants as baseless. I hereby allow this O.A. as the applicant bank has proved its claim beyond reasonable doubt.

15. In the light of the above discussions, the Original Application deserves to be allowed. „Sci-

ORDER

I, allow this OA and direct the defendants no.1 and 2 to pay to the applicant bank, jointly or severally, within a period of 30 days, a sum of Rs.14,84,170/- (Rupees Fourteen Lacs Eighty Four Thousand One Hundred Seventy only) together with pendentelite and future interest @18.50% per annum along with costs from the date of filing of this application till the date of realization failing which the aforesaid amount shall be recovered from the sale of movable and immovable properties of defendant no.1 and 2. (II) The recovery certificate be issued forthwith and be sent the Recovery Officer, Debt Recovery Tribunal-I, Delhi. (III) Parties are directed to appear before Recovery Officer, DRT I, Delhi on 04.08.2026. (IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost. 5d- (GOVIND BALLABH SHARMA) PRESIDING OFFICER DRT-I, DELHI (Dictated and pronounced in open court) Dated: 05.06.2026