IDBI BANK vs M/s venus Extructions Pvt Ltd and ors on 24 August 2026

FINAL ORDER

This original application has been filed by the applicant bank on 16.08.2002 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.54,85,328/- (Rupees

Fifty Four Lacs Eighty Five Thousand Three Hundred Twenty Eight only) along with pendentelite and future interest @18.50% per annum with quarterly rests from 12.08.2002 till the date of 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. It has been submitted that Inland Bills Discounting facility under Letter of Credit limit of Rs.500 lacs on 10.08.1998 in favour of defendant nb.3 being procurement agent/supplier for supply of various types of chemicals etc.was sanctioned by applicant bank in pursuance of Board Resolution dated 08.01.1998. 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 13 amounting Rs.37,00,000/- plus interest of Rs.17,85,328/-, totaling Rs.54,85,328/- were returned back / dishonored.

4. In order to avail the loan facility, the defendant no.3 executed Demand Promissory Note, Agreement to collect, purchase and/or discount bills/Hundies, Agreement of Hypothecation of Inventories of Book Debts all dated 16.10.1998., Agreement to Collect, Purchase and/or Discount bills/Hundies etc. dated 28.07.1999, Letter of

Acknowledgement in respect of bill discounting under letters of Credit facility with the applicant bank dated 27.09.2001.

5. It has further been submitted that various Bills of Exchange/Hundies drawn by various part es 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 present OA.

6. 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 and return criginal hundies but the defendants neglected the same and account remained out of order along with interest at agreed rates. Ultimately, the applicant bank issued recall notice dated 08.07.2002 calling upon defendants to pay outstanding amount but the defendants failed to clear the dues.

7. It has been submitted that defendant no.2 have filed their written statement before this Hon'ble tribunal have raised the objection that the application is based on false, fabricated and manufactured documents and no cause of action arise upon such documents. The defendant no.2 could be called to make payment only if transactions taken place strictly in terms of LCs but there are various discrepancies and violation of the terms of LCs and negotiation were not done in accordance with terms of LC, hence is not liable to make the payments and this application is liable to be dismissed as filed beyond the limitation period prescribed as per law. This Tribunal has gone through the documents which are duly filled and executed by the defendants and this Tribunal is of the view that plea of blank documents is no plea in the eyes of law as has been held by the Hon'ble Delhi Court in the matter of "Indian Bank Vs. Cheese Wafers (India) Pvt. Ltd.

8. It was held by applicant that defendant no.2 confirmed and certify that documents were in order and payment would be made on respective due dates. Further, the defendants have not filed any complaint before higher authorities of the bank or filed any complaint before police authorities. The act of defendant no.2 in dishonoring irrevocable letters of Credit is illegal and beyond established practice of banking in contravention of various clause of Uniform Customs and Practice for Documentary Credit 1993.

9. This Tribunal is of the view that statement of account is duly certified under Section 4 of the Bankers Books of Evidences Act and the same cannot be challenged unless specific entry is pointed by the defendants. Hence, the objections are not maintainable and the same are hereby rejected.

10. The defendant no.1 filed application dated 05.08.2003 seeking suspension of proceedings for recovery of money as declared as sick company duly protected under Section 22(f) of Sick Companies (Special Provisions) Act 1985 and no permission sought from BIFR.

11. 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 sct defendant no.3 also filed a complaint against defendant no.2 before National Commission for Redressal of disputes.

12. That in order to prove its case, the applicant bank has filed its evidence by way of the documents such as Letters of Credit no.101/99, Letter no.20108 dated 15.7.1999, Letter No.20107 dated 15.07.1999, Letter dated 16.07.1999, Letter dated 20.07.1999 for Confirming and sending original Hundies, Letters of Credit no.102/99 dated 28.07.1999, Letter dated 02.08.1999 for Confirmation of LC, Letter dated 04.08.1999, Letter dated 02.08.1999 for Irrevocable Confirmation, Letter dated 04.08.1999 admitting hundies dully accepted, Letter dated 21.09.1999 seeking Confirmation of Bills, Letter dated 10.08.1999, Letters dated 18.08.1999, 19.08.1999, 25.08.1999 regarding Confirmation, Letter of Credit with Purchase Agreements, Letters dated 31.08.1999, 01.09.1999, Letter dated 31.07.1999, Letters seeking Confirmation of Bills, 13 Dishonoured Bills of Exchange in Original returned by defendant no.2, Letters on various dates defendant no.2 to honor its commitments under Irrevocable Letters of Credit, Recall Notice dated 08.07.2002, UPC & Regd. Post Receipts/AD Cards, and Certified Statement of Dishonoured Bills of Exchange / Hundies and Power of Attorney marked as AW-1/1 to AW-1/49.

13. The witness of the applicant bank has fully corroborated the averments made in this O.A. The evidence lead by the applicant bank which consists of mainly written / typed documents has gone unchallenged and there is no question of disbelieving the same based upon the documents. This Tribunal has also observed that not an iota evidence/documents has been led by the defendants against the claim of the applicant bank and has made only submission on fact as stated in the written statement evidence. In the civil proceedings it cardinal principle, that whosoever alleges a fact he/she has to prove in the court of law by leading evidence mere assertion are not sufficient and nowhere defendants have denied about the availment of the loan.

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.

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.54,85,328/- (Rupees. Fifty Four Lacs Eighty Five Thousand Three Hundred Twenty Eight 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 27.10.2026. (IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost. .507- (GOVIND BALLABH SHARMA) PRESIDING OFFICER DRT-I, DELHI (Dictated and pronounced in open court) Dated: 24.08.2026