IFCI LTD vs ROHTAS INDUSTRIES LTD on 29 July 2026

FINAL ORDER

This original application has been flled by the applicant, on 14.05.1986 before the Hon'ble High Court of Delhi and the same was transferred to DRT on 25.04.tgg6, through Shri. M'V. Muthu, Manager (Technical) of the applicant against the defendant nos.1 and 2 for recovery of a sum of Rs'2,02,27,850'60 together with cost, charges and pendentellite and future interest @160lo from date of filing of this O'A' till the realization in full.

2. The brief facts of the case are that at the request of the defendant nos.1 and 2, the applicant agreed to advance to defendant no.1 a loan of Rs'1,90,80,000/- for the expansion and moderation of the paper mills of defendant no.1 at Dalmia Nagar, Bihar on the conditions - inter alia, that defendant no'2 shall executed an irrevocable and unconditional personal guarantee in his individual capacity for the due repayment of the loan. It is submitted that pending flnalization of the regular agreement and other legal formalities and documentation, defendant no'1 being the urgent need for money, the defendant on or about 20.10.1978 agreed to advanced to defendant no'1 a bridging loan of Rs.52,50,000/- repayable on demand by this defendant inter-alia, on the guarantee of defendant no.2. The defendant no'1 executed all necessary loaning documents on 20'10'1978' Again, at the request of defendant nos.1 and 2, the applicant sanctioned a bridging loan facility of Rs'15,00,000/-' The defendant no.1 executed all necessary loaning el.

TANO. 1273 of2022 3 documents on 30.03'1979 and 02'04'1979' Again' at the request of defendant nos'1 and 2, the applicant agreed to or about 07.04.L982 to grant a fufther bridging loan of Rs.42,50,000/-' The defendant no'1 executed a deed of pledge dated 07'04'1982 whereby defendant no.1 agreed that the aforesaid debentures of the aggregate face value of Rs'105'25 Lakhs shall be considered as pledge for the said bridging loan of Rs.42,50,000/- and further pledged debentures of the face value of Rs.6.98 Lakhs so as to form security for the said bridging loan as also for the two earlier further debentures of Rs'6,98,000/- are given in schedule to the said deed of pledge. The defendant no'l also executed a hypothecation agreement dated 07.04.1982 hypothecating the whole of the movable assets of the paper expansion p@ect at Dalmianagar' Bihar of defendant no.1 save and expect books debts' to the defendant by way of security for the said bridging loan of Rs'42,50,000/-' Out of the said bridging loan an amount of Rs'35,50,000/- was disbursed by applicant to defendant no'l by cheque dated 12.04.1982. The said cheque was encashed by defendant no.1. Subsequently, on 14'10'1982 a regular common loan agreement was executed between the applicant and defendant nos'3/ Industrial Development Bank of India (IDBI) & 4/ Industrial Credit Investment Corporation of India Ltd on the one hand and defendant no.1 on the other whereby the applicant and defendant nos.3/ Industrial Development Bank of India (IDBI) & 4/ Industrial Credit Investment Corporation of India Ltd agreed to lend to defendant no'1 Rs'190'80 Lakhs' Rs.330 Lakhs and Rs.189.20 Lakhs respectively' By way of security for the said loan of Rs'1,90,80,000/- and the g.l aforesaid loans granted by defendant nos'3/ Industrial Development Bank of India (IDBI) and 4l Industrial Credit Investment Corporation of India Ltd, the defendant no'1 by a common deed of hypothecation dated 14'10'1982 executed by defendant no'1 in favour of the applicant and defendant nos'3/ Industrial Development Bank of India (IDBI) and 4t Industrial Credit Investment Corporation of India Ltd, hypothecated the whole of the moveable plant and machinery, machine spares' tolls and accessories and other moveable both present and future but excluding Jaipur assets containing of vanaspati plant whether installed or not and whether lying loose or in case or lying in the stores on or about or shall thereafter from time to time during the continuance of the security of these presents be brought into upon or stores or be in or about the defendant no.l's factories, premises and godowns or wherever else the same way be or be held by any party to the order or disposition of defendant no'1 in the course of transit or on high sead or on order or delivery however and wheresoever in the possession of defendant no.l and either by way of substitution or addition' The said security by way of hypothecation ranks pari-passu between the applicant and defendant nos.3/ Industrial Development Bank of India (IDBI) and 4l Industrial Credit Investment Corporation of India Ltd' The defendant no.1 was order to be wound up by an order dated 24.10.1988 of the Patna High Court and the official liquidator was appointed as the liquidator of the defendantno.l,whoisthenowrepresentingthesaid defendant no.1. It is submitted that during the pendency of the O'A, the defendant no'2l Shri' A'K' Jain was died on 03'02'1999 and the LRs of defendant <t no.2/ Shri. A'K' Jain were impleaded in the present OA. Thereafter one of the LR of the defendant no'2 i.e. defendant no.2(A)Smt' Indu Jain (w/o Late Shri A.K. Jain) was also died on t3'07'202L and her LRs were already on record as defendant no'2 B & 2C'

3. It is fufther submitted that the defendants enjoyed and utilized the Loan facility' but failed to maintain the financial discipline and failed to repay the due amounts. The applicant bank requested the defendantstoregularizetheloanaccountbyvisitsand lefters, but there was no response from the defendants'Therefore,theapplicantbankserueda notice dated 09'08'1984 and 16'04'1985 to the defendants, demanding the amount due as on that date, butJailed to recover the same Thus' the present O.A.ff.A' is preferred by the applicant bank to recover its dues.

On notice by this Tribunal' defendant nos' 3/ (IDBI) and Investment Industrial defendant DeveloPment Bank no.4l Industrial of India Credit Corporation of India Ltd put appearance through counsel but failed to file written statement' Thereafter' thedefendantnos'3/IndustrialDevelopmentBankof India (IDBI) & defendant no'4/ Industrial Credit Investment Corporation of India Ltd failed to put appearance in the matter' Accordingly' the defendant nos.3i Industrial Development Bank of India (IDBI) & 4/ Industrial Credit Investment Corporation of India Ltd were proceeded against exparte on 06'11'2001' The LR's of defendant no'2 and defendant no'2(A) i'e', defendantno.(2B)/Shrisameer]ain&(2C)/ShriVineet s,\

lain Put appearance through counsel and filed written statement and evidence'

5. In the written statement of the LRs of defendant no.2 and defendant no'2 (A) have denied the fact mentioned in the O.A' It is submitted that the original application as filed by the applicant is not maintainable as the same is not filed, signed and verified by an authorizedperson.Itissubmiftedthattheapplicanthas not furnished the particulars of the guidelines and the notification on the basis of which the applicant has alleged charged the interest' In the absence of the details as to the said notiflcations and guidelines the original application cannot be entertained' The applicant is bound to make specific averments and give specific details in its original application which has got material bearing on the subject matter' However' the applicant has failed to do so, therefore' the original application is liable to be dismissed' It is submitted that the applicant has not given a correct statement of account' The applicant has charged a highly excessive rate of interest, in contravention and violation of the guidelines and circulars issued by the Reserve Bank of India which the defendants are not liable to pay' It is submittedthatthepresentoriginalapplication,flledby the applicant, is barred by the period of limitation and the original application is silent on the cause of action and does not explain as to when the cause of action lastaroseforfillingthepresentoriginalapplicationand hence the original application is hopelessly time barred and is liable to be dismissed' It is further submitted that defendant nos'2, 3 (now defendant no'28) and 4 (now defendantno.2C)arenotnecessarilypartyinthe <A

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present suit in as much as they are neither the borrowersnortheguarantors.Hence,nothingcanbe recoverd from the defendant nos'2' 3 (now defendant no.2B) and 4 (now defendant no' 2C) in their personal capacity. The said defendants were neither the borrowersnortheguarantorsinthepresentcase.Itis submitted that the afore said matter was previously fited before the Hon'ble High Court of Dethi sometimes in May, 1986 and was registered as Suit No'1199 of 1986. It is further submitted that a Winding Up Petition for winding up of M/s Rohtas Industries Ltd' the defendantno.l(PrincipalDebtor)waspendingbefore the Patna High Court being the Company Application No.3 of 1984. Vide orders dated 22'5'1985' the Hon'ble PatnaHighcourtpassedorderforappointmentof Provisional Liquidator for the said defendant no'1' In the mean while a Public Interest Litigation was commenced before the Hon'ble Supreme Court and the same was registered as CivilWrit Petition No'5222/85' The Hon'ble Supreme Couft was pleased to stay the Winding Up proceedings' The Hon'ble Supreme Court also referred the matter to the BIFR twice and the BIFR ultimately repofted that the various undertakings of Mis Rohtas Industries Ltd were not viable for various reasons.Duringthecourseoftheproceedingsthe Hon'ble Supreme Court with a view to make an attempt to rehabilitate the various IAS officer aforesaid undertakings, appointed as the Rehabilitation Commissioner and directed the Government of India as well as the State Government to pay a sum of Rs'40 Crores for that purpose out of which Rs'15 Crores were directedtobeheldseparatelyformeetingtheliabilities of the various secured creditors including the financial e..\

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institutions and banks including the applicant in the OA. It is further submitted that while appointing the Rehabilitation Commissioner, the Hon'ble Supreme Couft, with a view to assess the liabilities of M/s Rohtas Industries Ltd', towards the secured and unsecured creditors made further directions to appoint a Claims Commiftee to be headed by a retired judge of a High Court and accordingly a Claims Committee was appointed which considered the claims of various financial institutions and banks, including the applicant in the O.A., and precisely assessed the liabilities' It is submittedthattheapplicantintheo.A.dulyplacedits claim before the Claims Committee' The Hon'ble Supreme Court vide its flnal orders dated 18'10'1995 referred the matter to the Patna High Court to resume the winding up of M/s Rohtas Industries Ltd'' and also issued directions to consider the claims of various creditors with reference to the report of the Claims Committee including that of the applicant in the present O.A. It is submitted that the report of the Claims Committee thus stands merged in the orders of the Hon.bleSupremeCourtoflndiaandtheapplicantinthe O.A., who has acquiesced to the recommendation of the Claims Committee and is bound by the orders of the Hon'ble Supreme Court to the effect that the claims be consideredbytheCompanyJudge'PatnaHighCoutt' has no right or locus standi to file/pursue the present O.A. in view of the aforesaid orders dated 18'10'1995 of the Hon'ble Supreme Court of India and thus this Hon'ble Tribunal has no occasion and ought not to reconsider the present OA' The applicant in the O'A' cannotbeallowedtoruntwoparallelproceedingsfor the same claim in two different forum' It is further d.

TA NO. 1273 of2022

submitted that during the course of proceedings before the Hon'ble Supreme C-ourt of India was pleased to direct the Claims Committee to get a valuation of the total assets of M/s Rohtas Industries Ltd', by an approved and authorised valuer and accordingly M/s Price Waterhouse of Calcutta was appointed to value the assets. The said valuers reported to the Clams Committee that the value of the assets of M/s Rohtas Industries Ltd was about Rs'250 Crores and the Rehabilitation Commissioner accordingly reported to the Hon'ble Supreme C-ourt the aforesaid valuation which finds a reference in the aforesaid orders dated 18.10.1995 of the Hon'ble Supreme Court of India' The present matter was, previously flled before the Hon'ble Delhi High Court and was registered as Suit No.1 1199/86' It is submitted that the Provisional Liquidator had been appointed in the Winding Up Petition by the Hon'ble Patna High Court the said suit could not be proceeded with in law without the permission of the said company court in view of the provisions of Section 446 of the Companies Act' 1956' Fufther since the provisions of the Sick Industrial Companies (Special Provisions) Act' 1985 had also been invoked therefore even the consent of the BIFR is also required even for continuing with the proceedings in thesuit.Itissubmiftedthatcontrarytotheaforesaid thesaidsuitwaswronglytransferredbytheregistryof Delhi High Court to this Honble Tribunal' It is fufther submitted that the applicant has already put up its claim before the Claims Committee appointed by the Rehabilitation Commissioner pursuant to the orders of the Hon'ble Supreme Couft aforesaid' As per the provisions of the said orders.dated 18'10'1995 the g,^

l0 report of the said Claims Committee is to Oe decided by the Company Court at Patna High Court' The present Original Application by the applicant bank therefore is not maintainable and cannot be proceeded with. The present Original Application by the applicant bank cannot be allowed to pursue two independent proceedings for the same set of facts. Besides this in view of the pendency of the proceedings before the Honble Patna High Couft pursuant to the orders of the Hon'ble Supreme Court in relation to the subject matters involved in the present Original Application this Hon'ble Tribunal has no jurisdiction to entertain and try the present O.A. It is further submitted that present O'A is even otherwise not maintainable and this Hon'ble Tribunal has no jurisdiction to entertain the same in view of the provisions of Section 446 of the Companies Act, 1956, without leave/permission / consent of the Company Court. it is submitted that the present O'A' is even otherwise not maintainable and this Hon'ble Tribunal has no jurisdiction to enteftain the same in view of the fact that in law there is no application as contemplated under RDB Act, 1993 and the Debt Recovery Tribunal (Procedure) Rules, 1993 made thereunder as there has been no compliance of the provisions thereof by the applicant and even the Registrar has not passed any orders confirming the compliance thereof. It is further submitted that the present O.A. is even otherwise not maintainable and this Hon'ble Tribunal has no jurisdiction to entertain the same in view of the fact that the provisions of the RDB Act, 1993 and the Debt Recovery Tribunal (Procedure) Rules, 1993 made thereunder do not apply to a guarantor. The defendant no'2 is alleged to be a s^

I I guarantor. The present O.A' is therefore, not maintainable and hence is liable to be dismissed' It is submitted that the present O.A. is even otherwise not maintainable as against the defendant no'2 in view of the fact that the applicant bank has already approached the Claims Committee and is conducting its case for recovery therein and has waived its right, if any, against Late Shri A.K. Jain' It is further submitted that the defendants were able to procure a copy of the Report of the Claims Committee (which had earlier been appointed under the directions of the Hon'ble Supreme Court of India, for determining, among others' the amounts due by the Principal Debtor Rohtas Industries Limited to the Banks and Financial Institutions) submitted by the said Committee before the Hon'ble Supreme Couft of India in the Writ Petition Civil No' 5222 of 1985 titled as "Workmen of M/s Rohtas Industries Limited Vs. M/s Rohtas Industries Limited"' It is apparent from the said Claims Committee's Report that the applicant had indeed submitted a claim before the said Claims Committee' The said Claims Committee hadrecommendedforpaymenttotheapplicantonlyof an amount of Rs.81.12 lacs, after deducting an amount of Rs.65.07 lacs that had already been realized by the applicant from the Principal Debtor Rohtas Industries Limited and the said recommended amount was also subject to further reduction on account of waiver of interest, reduction in the rate of interest' etc' It is further submitted that the policy of the Financial Institutions not only to substantially reduce the rate of interestbutalsotowaivethecompleteoutstanding interestinadditiontosacrificingasubstantialpartof the principal amount itself while seftling their account 9'\

with Sick Industries. Whereas the condition of the Principal Debtor Rohtas Industries Ltd' in this case is worse than that of a Sick Company, the same having already been wound up/ liquidated even after the efforts for its revival under the supervision of the Hon'ble Supreme Court of India, and infusion of huge amounts of money by the State Govt' of Bihar at the instance of the Hon'ble Supreme Court of India in pursuance of the directions issued under the above mentioned WP (Civil) No' 5222 of 1985, did not bear fruit even after the appointment of a full time Rehabilitation Cornmissioner from the Bihar State IAS Cadre to Rehabilitate the Company' It is submitted that vide Orders dated 22nd May, 1986' the Official Liquidator attached to the Hon'ble Patna High Court was appointed as the Provisional Liquidator of the defendant no. 1 i.e. M/s. Rohtas Industries Limited and was directed to take charge of the propefties of the said Company. Thereafter, the Ld/ Official Liquidator started selling the various assets and properties of the Principal Debtor M/s Rohtas Industries Ltd' from time to time and realized substantial funds from such sale' For example, vide Order dated 11'01'2007 the Hon'ble High Court of Patna was pleased to direct the sale of some properties of M/s Rohtas Industries Limited' the Company under Liquidation, to the Indian Railways for a sum of Rs'140 Crores' Similarly, vide Orders dated 31.05.2007, sale of dry wood was ordered in favour of one Shri Sajid Parwez for Rs'1,95,000/-' There have been many similar sales in the past and this process is an ongoing process and the current status of the Winding up proceedings of Rohtas Industries Ltd'' to the best of the information of the defendants is that the e.\

TA NO. 1273 of2022

same is still going on. The defendants have learnt from a newspaper report that the Gow' of India, Railway Board (Ministry of Railways), New Delhi has invited request for Qualification vide a Public Notice for setting up a new factory at Dalmianagar where the industrial complex of the Principal Debtor Rohtas Industries Ltd. is situated' This is after having secured the above-mentioned properties of Rohtas Industries Ltd., through the Hon'ble Patna High Court for Rs.140.00 crores. The said amount of Rs'140 Crores and various other amounts which would have been realized by the sale of the various assets and properties of the said Principal Debtor Company under Liquidation' over a number of years, are lying with the Ld' Official Liquidator attached with the Hon'ble High Court of Patna and the same is more than sufficient and available for the applicant to satisfy its claim, as may be finally and legally determined' The claims before the Claims Committee were filed by the applicant directly before the said Committee. This fact finds specific mention in the report of the Claims Committee' Similarly, the objections to the Repoft of the Claims Committee submitted before the Hon'ble Supreme Court of India were also filed by the applicant directly before the Claims Committee' The Order dated 18.10.1995 of the Hon'ble Supreme Court of India takes full cognizance of the fact of the claims of the applicant having been submitted and also of the objections filed by the applicant to the Repolt of the Claims C'ommittee' Hence, neither of these facts can be disputed or controverted by the applicant' All these records were remitted by the Hon'ble Supreme Court of India to the Hon'ble Patna High Court an( form part of the Winding c\

up proceedings of the Principal Debtor Rohtas Industries Ltd. which are currently pending before the Hon'ble Patna High Court. It is submitted that after selling all the assets and properties of the Principal Debtor Rohtas Industries Ltd. and realizing the sale proceeds thereof, the Official Liquidator would in due course of time and process distribute the same to the various claimants, including the applicant as may be determined by the Official Liquidator and the Hon'ble Patna High Court and after considering the recommendations of the Claims Committee' The defendants beg to submit that even though the applicant had submitted a claim of Rs'383'88 lacs before the Claims Committee, the said Claims Committee had recommended only Rs'81'12 lacs and that too subject to further waiver/ reduction of interest etc. It is submitted that the observations of the Claims Committee in relation to the conduct of the applicant about the claims submitted by it to the said Claims Committee that despite having received a sum of Rs.65,07,000/- from the Principal Debtor Rohtas Industries Ltd', IFCI i.e. the applicant had failed to give credit of this amount in their claims' The defendants were able to procure various orders of the Hon'ble High Court of Judicature at Patna passed in Company Petition No. 3 of 1984, being the Winding up Petition of the Principal Debtor Rohtas Industries Ltd' from time to time after the year 2004 which would have a direct bearing on the present O.A. No' 701 of 1996' While the Winding Up proceedings of the Principal Debtor Rohtas Industries Ltd. were pending before the Hon'ble Patna High Court, various developments of great signiflcance in support of the case of the defendants took place' The r^

TANO. 1273 of 2022

said developments also contradicted the stand that had been taken by the applicant herein before not only this Hon'ble Tribunal but also before the Hon'ble Appellate Tribunal in the said Appeal No' 320 of 2004' It is submitted that the applicant appeared before the Hon'ble Patna High Couft in the liquidation proceedings of M/s Rohtas Industries Limited (the principal debtor of IFCI) and filed an Application being IA No' 1428 of 2009 on or around 02.03.2009 under Sections 529 and 529 A of the Companies Act, 1956 and under Section 151 of the C.P.C. as a secured creditor wherein and whereby it admitted various facts which had so far been denied by the applicant in the current proceedings before this Hon'ble Tribunal' In the said application sought an interim order for payment of at least the alleged admitted principal amount to the tune of Rs.37.93 Lakhs as well as for another sum of Rs'1'65 Crores to be paid to another financial institution viz' IDBI who is not a party in these proceedings' It is fufther submitted that the applicant IFCI has always submitted and maintained its stand before this Hon'ble Tribunal that it was not pursuing remedies in different (i.e. more than one) forums for the same dues owed to it. However, the various events that have taken place and the various additional documents now sought to be brought on record by the defendants clearly prove beyond doubt that the actual facts are to the contrary and the applicant IFCI is indeed pursuing two independent proceedings in two different forums for the recovery of the same alleged dues and with the same set of facts. Further, by participating in the proceedings before the Hon'ble Patna High Coutt' only an s^ which Proceedings are extension of the

TANO. 1273of2022 16 proceedings initiated by the High Powered Claims Committee constituted by the Hon'ble Supreme Court, which has already fully and substantially quantified and recommended the proper and final dues owed by the Principal Debtor Rohtas Industries limited (save & except the objections filed thereto by the financial institutions, and save & except further reduction to be made by the claimants) to all creditors including the applicant IFCI, and having in fact even received the payment of its dues from the Official Liquidator in terms of the adjudication by the Claims Committee, the applicant IFCI has bound itself to pursue its remedy before the Hon'ble Patna High Couft only. Further, it is evident that the applicant IFCI has elected its remedy and the same is reaffirmed by its actions in filing the impugned application before the Hon'ble Patna High Court, which has also accepted the same on record and made further directions to the applicant IFCI to file its claim before the Official Liquidator of M/s Rohtas Industries limited by 30.06.2009 and by its action of actually receiving the payment from the Official Liquidator and undeftaken to refund the excess payment received, if any. It is submitted that the applicant IFCI had even earlier also so elected by participating in the proceedings before the Hon'ble Claims Committee set up by the Rehabilitation Commissioner under the directives of the Hon'ble Supreme Court of India. Therefore, it is prayed that this Hontle Tribunal may dismiss the present O.A.

6. The applicant bank as well as the LRs of defendant nos.2 have filed their respective evidence. Ee

7. Heard the Ld. Counsels of the applicant bank and LRs ofdefendant no. 2 and also perused the record.

8. The first contention of the Ld. counsel of the applicant is that in 1984 a company petition CP No.3/1984 was filed at Honble Patna High Court against the defendant no.1. On 16.04.1985 the applicant issued letter to defendant no.2 invoking guarantee and calling upon defendant no.2 to make a payment of Rs.1,52,69 ,0691- in terms of the guarantee deed dated 10.11.1982. In the above case the defendant no.1 has denied all the claims of the applicant and filed the reply. The defendant no.2 has also filed the reply on 06.06.2025 denying the liability to pay any dues. The workmen of defendant no.l approached the Hon'ble Supreme Court of India by way of Writ Petition C(52221t985) seeking inteference to revive the defendant no.1 and rehabilitate the workman. The Hontle Patna High Couft ordered the winding up of defendant no.1 on 22.05.1986 and appointed a Provisional Liquidator in winding up company petition. The claim of the defendant is that the Hon'ble Supreme Couft in the Writ Petition has directed the State of Bihar to appoint an Authorised Officer from the senior IAS Cadre to be Rehabilitation Commissioner and Provisional Liquidator to administer all assets of defendant no.1 which has been taken over under the orders of the Hon'ble Patna High Court. The officer was entrusted with the power to take over the assets and further directions were passed that the assets of defendant no.1 incumbered with the financial institution cannot be proceeded against for a period of one year and there shall be a moratorium for the same and the limitation perio{ w;p also suspended. The sl'

TANO. 1273 of2022 l8 moratorium was kept extending by various orders of the Honble Supreme Court until 31.12.1995. It is further submitted that the State Government undertook to deposit Rs.15 Crores and Union of India was directed to deposit Rs.15 Crores with the Administrator which may be utilized for payment of wages and disbursement of secured loans of financial institution from which defendant no.1 has taken loan and mortgaged its assets. Out of Rs.300 Crores, Rs.6 Crores was given by the State Government as grant and Rs.24 Crores was to be paid by the defendant no.1. The defendant no.1 could not be revived despite best efforts and therefore, the Hontle Supreme Court constituted a Claims Committee. The Claims Commiftee filed its report on 09.10.1991. It is submitted that by the Claims Committee it was recommended that an amount of Rs.1,46,18,9321- & paid to the applicant out of which Rs.65,07,000/- was already realized and therefore, only a balance of Rs.81,11,932/- was left. It is submitted that the Honble Supreme Court has again directed that efforts may be made to revive the defendant no.1 and it was directed that the defendant no.1 may be sold through public auction. The defendant no.1 was put for auction but could not be sold as the no bid was received as per valuation report. Therefore, the Hontle Supreme Court on 18.10.1995 has came to conclusion that revival of defendant no.1 is not feasible and further directed that proceedings before the Hontle Patna High Court shall be resumed. It is submitted that the applicant has already submitted his claim before the Claims Committee and in the winding up proceedings before the Honble Patna High Court, therefore, applicant cannot be permitted to proceed with the OA e^

and therefore, the OA is liable to be dismissed. On the other hand the Ld. counsel of the applicant FI has submitted that the claim of the applicant has not been paid by the defendants and no order has been passed against the applicant that the applicant cannot pursue this OA against the defendant and therefore, the proceedings initiated under the Companies Act and proceedings before the Honble Supreme Court cannot restrict the applicant from claiming the amount against the defendants. In this regard I have perused the entire record. From perusal of the record it is clear that a Writ Petition has been filed before the Hontle Supreme Court for rehabilitation of the workmen and revival of the defendant no.l. Despite being taken so much efforts and appointing Rehabilitation Commissioner, the defendant no.1 could not be revived and therefore, ultimately the Hon'ble Supreme Coutt has resumed the proceedings before the Honble Patna High Couft under the Company Petition. Therefore, the order passed by the Hon'ble Supreme Court cannot debar the applicant FI from taking action under the provisions of the RDB Act for recovery of their legitimate dues. So far as the company petition before the Honble Patna High Court is concerned, I have gone through the record. From perusal of the record it is clear that the claim of the applicant has not been finally decided by the Hon'ble Patna High Coutt. Therefore, the applicant has every right to proceed under RDB Act for recovery of their legitimate dues. Therefore, the contention of the defendants that the present OA is liable to be dismissed on the ground that the Claims Committee has adjudicated the amount to be paid and the amount has been paid cannot be accepted. The Claims Committee has been constituted for revival of 9T

TANO. 1273of2022 20 the defendant no.1 and has nothing to do to quantify the dues of the applicant. From perusal of the entire record it is clear that the claim of the applicant has not been adjudicated either by the Hontle Supreme Couft or by the Honble Patna High Court. Therefore, the contention of the defendants has no force.

9. The next contention of the defendant is that all amount has already been paid to the applicant and therefore, the defendants are not liable to pay any dues. In this regard I have perused the record and also gone through the statement of account filed by the applicant FI. From perusal of the entire record it is clear that the dues ofthe applicant has not been paid by the defendants and therefore, the contention of the defendant has no force.

10. The next contention of the defendant is that the defendants have never executed the deed of guarantee and therefore, the applicant bank cannot proceed against the defendants. In this regard I have perused the record. From perusal of the record it is clear that the applicant has duly proved the execution of the guarantee and has filed the evidence in this regard. The evidence filed by the applicant can be duly accepted as per Banker's Book Evidence Act. Therefore, the contention of the defendant has no force.

11. The next contention of the defendant is that the applicant is charging exorbitant rate of interest. It is submitted that the applicant is charging an interest @l7o/o p.a. and liquidated damages @2olo. It is submitted that such a high rate of interest cannot be g.)

TANO. 1273 of2022 2l permitted to be recovered from the defendants. On the other hand the Ld. counsel of the applicant FI has submitted that the applicant FI is claiming agreed rate of interest. From perusal of the record it is clear that the applicant is claiming the rate of interest as per agreement entered into between the pafties. There is no ground to hold that the rate of interest claimed by the applicant is too high. When the defendant has entered into an agreement accepting the terms of the agreement, there is no occasion for this Tribunal to hold that the rate of interest is too high. The debt has been taken for the commercial purpose and therefore, the rate of interest shall be governed by the agreement entered into between the parties. Therefore, it cannot be said that the rate of interest is so exorbitant which requires interference of the Tribunal. Therefore, the contention of the defendants has no force.

12. The next contention of the defendant is that the LRs of defendant no.2 have not inherited any property from defendant no.2. Therefore, the LRs of defendant no.2 are not liable to pay any dues. It is further submitted that the OA may be dismissed against the LRs of defendant no.2 as they have not inherited any property from defendant no.2. On the other hand the Ld. counsel of the applicant has submitted that the LRs of defendant no.2 has inherited the propefi from defendant no.2 and are liable to pay the dues of the applicant FL In this regard I have considered the contention of the defendants. When an application under Section 19 of the RDB Act has been filed before this Tribunal and during pendenry of the original application, one or any of the defendant expires, the legal representative of the deceased defendant can be held liable only to the extent they have inherited the 9tr, TA NO. 1273 of2022

propety from the deceased defendant. The amount of the liability on the legal representatives of the deceased shall be restricted only to the extent of the property inherited by them. There is no independent liability of the legal representative/ legal heir. In an application under Section 19 of the RDB Act this Tribunal has to decide whether the amount claimed by the applicant is liable to be recovered from the defendant and a recovery ceftificate may be issued or not. At this stage this Tribunal has no authority to dispose of the claim of the rival pafties as to whether they have inherited any property or not. Once the recovery certificate is issued, the Ld. Recovery Officer will proceed under the recovery certificate and at that time it may be decided as to whether any LR has inherited any property from the deceased defendant. Therefore, this plea cannot De decided by this Tribunal in an OA filed under Section 19 of the RDB Act but it has to be decided under Second Schedule of Income Tax Act and under Chapter V ofthe RDB Act by the Ld. Recovery Officer.

13. From perusal of the entire evidence, it is clear that the defendants have failed to prove their case as claimed in the written statement. On the other hand, the applicant bank has proved his case against the defendants and therefore, the defendants are liable to pay jointly and severally the amount claimed by the applicant bank and the OA of the applicant bank is liable to be allowed. In the light of the above discussiong the present TA deserues to be allowed. e',\

TANO. 1273of2022 23

ORDER

1) I hereby allow this T.A. of the applicant bank and direct the LRs of defendant no.2 Shri A.K.Jain namely Shri Sameer Jain and Shri Vineet Jain to pay jointly and severally to the applicant a sum of Rs.2,02,27,850.60 along with cost, expenses and interest @ L7o/o from the date of filing of this O.A. which has become T.A till the date of realization. However, the liability of LRs of deceased Shri A.K. Jain/defendant no.2 namely Shri Sameer lain and Shri Vineet Jain is limited to the extent of property/assets inherited by them from deceased Shri A.K. lain and Smt. Indu Jain.

2) In case of failure to deposit the above amount within the stipulated period, the same shall be recovered from the sale of personal movable and immovable assets of the LRs of defendant no.2 namely Shri Sameer Jain and Shri Vineet Jain.

3) Recovery Certificate be issued forthwith and be sent to Recovery Officer, Debts Recovery Tribunal-Il, Delhi.

4) The registry of this Tribunal is hereby directed to issue free copy of the order and send the same to both the parties.

5) Pafties are directed to appear before the Ld. Recovery Officer, DRT-II, Delhi on 29.09.2026. Pending IAs, if any, stand disposed of. File be consigned to records. !9A (susHr L KIJM-AR np,frbcil PRESIDING OFFICER DRT-II, Delhi Date:29.07.2026 .-,..

TANO. 1273 of 2022 '

This judgement has been signed, dated and pronounced in open court. Date i 29.07.2026

(susHrL KUMAR RASTOG) PRESIDING OFFICER DRT-II, Delhi t a