BANK OF BARODA vs M/S DEWAN RUBBER INDUSTRIES LIMITED on 23 August 2024

JUDGMENT

1. This Transferred Application has been filed by the applicant Bank under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993, against defendants for the recovery of Rs.22,90,26,600.85 (Rupees Twenty Two Crore, Ninety Lac, Twenty Six Thousand, Six Hundred and Paise Eighty Five Only) together with pendentelite and future interest, costs and other reliefs etc.

2. The brief facts of the case are that the defendant No.1 is a Private Limited company incorporated, registered under the companies Act, 1956 carrying business of Manufacturing of Cycle and Richshaw Tyres and tubes cotton yarns and reclaimed Rubbers, defendant Nos.2 to 7 are the directors of company in their personal capacity stands as Guarantor too for all the credit facilities/advance granted to defendant No.1, 3T.A.385 of 2002

the defendant Nos.8,9&10 are the consortium member of the defendant No.14 (Bank of Baroda) **leader** of the consortium and the defendant Nos.11 to 16 are the financial institutions have pari passu /second charge by with the applicant bank on the properties mortgaged/hypotheccations co obligant with the consortium members and financial Institutions as are the parties to this Transfer application, The defendant No.1 as partnership firm carrying business under the name of M/s Dewan Rubber Industries as the said firm was converted into private limited company under the companies act 1956, (No.1 of 1956) on 09.07.1984 with all assets and liabilities erstwhile Partnership firm concern were taken by incorporated private limited company after conversion on grant of credit facilities through loan application approached the applicant-bank for ;

- (i) Cash Credit(Hypotheccation of stocks) of Rs.100.00 Lac

- (ii) Cash Credit(Hypotheccation of Books debts) of Rs.45.00 Lac

- (iii) Term Loan of Rs.17,15,704.60/-

- (iv) Bill Discounting limit of Rs.86.00 Lac

- (v) Inland letter of Credit Limit of Rs.30.00 Lac

- (vi) Foreign Letter of Credit of Rs.10.00 Lac,

- (vii) Bank Guarantee of Rs.5.00 Lac Dewan which was duly considered and sanctioned by the applicant-bank vide its on passed Board Resolution by the Board of Directors dated 23.07.1984 on certain terms and conditions as mentioned to this transferred application.

3. To secure the aforesaid various Cash Credit facilities of Rs.293,15,704.60/-, the defendant Nos.1 to 7 signed and executed various necessary security documents on company common seal through Directors like Demand Promissory Note for Rs.100.00 Lac, letter of continuing Security for Rs.100.00 Lac, instrument of Hypothecation of goods for Rs.100.00 Lac, demand Promissory Note for Rs.45.00 Lac, Instrument of Hypothecation of Book Debts for Rs.45.00 Lac, Letter of undertaking for Rs.45.00 lac, Letter of continuing security for Rs.45.00 Lac, Power of attorney authorizing the bank to collect book debts Refinance agreement for Rs.17,15,704.60/-, Hypothecation of Movable machinery (for refinance) for 4T.A.385 of 2002

Rs.17,15,704.60/-, Letter of Instalment in respect of term loan with acceleration clause and also authorizing bank to charge penal interest, Letter of undertaking giving authority to applicant bank to collect discount/purchase bills and other instruments, General form of Guarantee for Rs.3,09,39,281.55/- by with defendant Nos.2 to 7 with Sri Dault Ram Dewan(Since Deceased) as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Instrument of hypothecation of movable machinery for Rs.276.00 Lac, Instrument of Hypothecation of goods for Rs.3,09,39,281.55/-, Hypothecation of Book Debts for Rs.3,09,39,281.55/-, Instrument of additional security hypothecating all furniture , fixtures and office fittings equipments, vehicles and stationery, Undertaking not to allow to withdraw the deposit of directors and family members with prior written consent of the bank, Hypothecation of movable machinery, Undertaking to comply with the various terms and conditions on 23.07.1984 in favour of applicant bank(Exhibit No.A-2 to A-22)further defendant No.1(Company) on passed board resolution 28.12.1984 request to the applicant bank to revised the credit facilities of i.e. Cash Credit(hypothecation of Books Debts) limit of Rs.45.00 Lac was enhanced to Rs.50.00 Lac, Bill discounting limit of Rs.86.00 Lac was enhanced to Rs.94.00 Lac, Foreign letter of Credit(FL/C) limit of Rs.10.00 Lac was enhanced to Rs.30.00 Lac, bank guarantee of Rs.5.00 Lac was enhanced to Rs.10.00 Lac, upon defendant No.1 signed and executed various loan and security documents for enhancement i.e. Demand Promissory Note for Rs.5.00 Lac, letter of continuing Security for Rs.5.00 Lac, instrument of Hypothecation of book Debts for Rs.5.00 Lac, demand Promissory Note for Rs.45.00 Lac, Undertaking not to allow to withdraw the deposit of directors and family members with prior written consent of the bank for credit facilities of Rs.150.00 Lac, letter of undertaking giving authority to applicant bank to collect/discount/purchase bills and other instruments, Instrument of pledge to good to secure various credit facilities General form of Guarantee for Rs.3,47,39,281.55/- by with defendant Nos.2 to 7 with Sri Dault Ram Dewan(Since Deceased) as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Instrument of Hypothecation of goods for 5T.A.385 of 2002

Rs.2,47,39,281.55/-, Hypothecation of Book Debts for Rs.2,97,39,281.55/-, Instrument of Hypothecation of machinery for Rs.314.00 Lac, instrument of additional security hypothecating all furniture, fixtures and office fittings equipments, vehicles and stationery, Undertaking to comply with the various terms and conditions on 23.01.1985 in favor of applicant bank(Exhibit No.A-23 to A-35) further defendant No.1(Company) on passed board resolution 04.12.1985 request to the applicant bank to revised the credit facilities of i.e. Cash Credit(hypothecation of Books Debts) limit of Rs.100.00 Lac was enhanced to Rs.120.00 Lac, Bill discounting limit of Rs.94.00 Lac was enhanced to Rs.158.00 Lac, INLAND letter of Credit(IL/C) limit of Rs.30.00 Lac was enhanced to Rs.50.00 Lac, upon defendant No.1 signed and executed various loan and security documents for enhancement i.e. Demand Promissory Note for Rs.20.00 Lac, letter of continuing Security for Rs.20.00 Lac *in addition for Rs.100 Lac belongs dated 23.07.1984*, instrument of Hypothecation of book Debts for Rs.20.00 Lac, letter of B.P. Undertakings(inland bill) General form of Guarantee for Rs.5,53,39,281.55/- by with defendant Nos.2 to 7 with Sri Dault Ram Dewan(Since Deceased) as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Instrument of Hypothecation of goods for Rs.186.00 Lac, Hypothecation of Book Debts for Rs.104.00 Lac, Instrument of Hypothecation of machinery for Rs.104.00 Lac, instrument of additional security hypothecating all furniture, fixtures and office fittings equipments, vehicles and stationery, Undertaking to comply with the various terms and conditions on 25.01.1986 in favor of applicant bank(Exhibit No.A-36 to A-47) Certified issued dated 02.04.1986 by the registrar of the companies defendant No.1 converted into Dewan Rubber Industries( the private limited company was converted into Limited company) fresh documents were not obtained from limited company as under section 23(3) of the companies Act, 1956 the change of the name shall not effective to any right to obligations of the company further defendant No.1(Company) on passed board resolution 17.06.1986 request to the applicant bank for fresh Term loan facility of Rs.11.00 Lac i.e. Demand Promissory Note for Rs.11.00 Lac, letter of instalment with acceleration clause and also agree to 6T.A.385 of 2002

pay penal interest instrument of Hypothecation of movable machinery (for refinance) for Rs.11.00 Lac, instrument of hypothecation of machinery dated 02.09.1986 for Rs.11.00 as collateral security, General form of Guarantee for Rs.5,64,39,281.55/- by with defendant Nos.2 to 7 with Sri Dault Ram Dewan(Since Deceased) as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, on 02.09.1986 in favor of applicant bank(Exhibit No.A-48 to A-54) further defendant No.1(Company) on passed board resolution 15.10.1986 request to the applicant bank to revised/enhanced the credit facilities of i.e. Cash Credit(hypothecation of Books Debts) limit of Rs.120.00 Lac was enhanced to Rs.154.00 Lac, Bill discounting limit of Rs.158.00 Lac was enhanced to Rs.246.00 Lac, Term loan limit of Rs.12.50 Lac, upon defendant No.1 signed and executed various loan and security documents for enhancement i.e. Demand Promissory Note for Rs.34.00 Lac, letter of continuing Security for Rs.34.00 Lac *in addition for Rs.100 Lac belongs dated 23.07.1984 and Rs.20.00 Lac dated 25.01.1986*, instrument of Hypothecation of book Debts for Rs.34.00 Lac, letter of B.P. Undertakings(inland bill), letter Undertaking Charging various securities and Demand Promissory Note for Rs.12.50 Lac, letter of acceleration clause and also agreeing to pay penal interest on amount of installment or interest in default for the period of default, Instrument of Hypothecation of machinery dated 31.10.1986 for Rs.122.00 Lac, General form of Guarantee for Rs.6,98,89,281.55/- by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Instrument of Hypothecation of goods for Rs.111.50 Lac, Hypothecation of Book Debts for Rs.145.50' Lac, instrument of additional security hypothecating all furniture, fixtures and office fittings equipments, vehicles and stationery, Undertaking to comply with the various terms and conditions, Undertaking not to allow withdrawal of deposit by directors and their family members without prior written permission from bank, Under taking to Utilise the facilities advanced by the bank for the purpose for sanctioned on 31.10.1986 in favor of applicant bank(Exhibit No.A-55 to A-71) further defendant No.1(Company) on passed board resolution 18.12.1987 request to the applicant bank to revised/enhanced 7T.A.385 of 2002

the credit facilities of i.e. additional Cash Credit (hypothecation of Books Debts) facility of Rs.50.00 Lac was enhanced to Rs.80.00 Lac upon defendant No.1 signed and executed various loan and security documents for enhancement i.e. Demand Promissory Note for Rs.30.00 Lac, letter of continuing Security for Rs.80.00 Lac *in addition for Rs.45 Lac belongs dated 23.07.1984 and Rs.5.00 Lac dated 23.01.1985*, instrument of Hypothecation of book Debts for Rs.30.00 Lac, Undertaking authorizing bank to collect book debts directly from the customers and not to include book debts of sister concerns in the statement and also deposit the proceeds directly received from the customers in the bank on 17.12.1987 in favor of applicant bank (Exhibit No.A-72 to A-76) further defendant No.1 (Company) on passed board resolution 02.08.1988 request to the applicant bank to revised/enhanced the credit facilities of i.e. Cash credit (hypothecation of goods) limit of Rs.154.00 Lac was enhanced to Rs.175.00 Lac, Cash Credit (hypothecation of Books Debts) limit of Rs.80.00 Lac was enhanced to Rs.100.00 Lac, Bill discounting limit of Rs.246.00 Lac was enhanced to Rs.290.00 Lac, Fresh Term loan limit of Rs.12.00 Lac for plant and machinery, Bank guarantee limit of Rs.10.00 Lac was enhanced to Rs.20.00 Lac, upon defendant No.1 signed and executed various loan and security documents i.e. Demand Promissory Note for Rs.21.00 Lac in addition to D.P. Note for Rs.100.00 Lac dated 23.07.1984, for Rs.20.00 Lac dated 25.01.1986, Rs.34.00 Lac dated 31.10.1986, letter of continuing Security for Rs.21.00 Lac *in addition for Rs.100 Lac belongs dated 23.07.1984 and Rs.20.00 Lac dated 25.01.1986 and Rs.34.00 Lac dated 31.10.1986*, instrument of Hypothecation of goods for Rs.21.00 Lac, Undertaking to Utilise the facilities advanced by the bank for the purpose for sanctioned, letter of B.P. Undertakings (inland bill), Demand Promissory Note for Rs.20.00 in addition to D.P. Note for Rs.45.00 Lac dated 23.07.1984, for Rs.5.00 Lac dated 23.01.1985, Rs.30.00 Lac dated 18.12.1987, Undertaking authorizing bank to collect book debts directly from the customer and not to include book debts of sister concern in the statement and also deposit the proceeds directly received from customers in the bank, letter of continuing security amounting to Rs.20.00 lac, instrument of hypothecation of goods for Rs.116.00 Lac, Hypothecation of Book Debts for 8T.A.385 of 2002

Rs.87.00 Lac dated 06.08.1988, Instrument of Hypothecation of movable machinery for Rs.125.00 Lac, General form of Guarantee for Rs.8,35,89,281.55/- by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Undertaking to comply with the various terms and conditions, Instrument of additional security hypothecating all furniture fixtures and fittings with all Office equipments, vehicles and stationery, Undertaking not to allow withdrawal of deposit by directors and their family members without prior written permission from bank on 06.08.1988 in favor of applicant bank(Exhibit No.A-76 to A-94) further defendant No.1(Company) on passed board resolution 13.03.1989 request to the applicant bank to unused portion of bills purchased facility of Rs.40.00 Lac for availing the Cash credit facility upon defendant No.1 signed and executed various loan and security documents i.e. Demand Promissory Note for Rs.40.00 Lac in addition to D.P. Note for Rs.45.00 Lac dated 23.07.1984 for Rs.5.00 Lac dated 23.01.1985, Rs.30.00 Lac dated 18.12.1987, letter of continuing Security for Rs.40.00 Lac *in addition for Rs.45 Lac belongs dated 23.07.1984 and Rs.5.00 Lac dated 23.01.1985, Rs.30.00 Lac dated 18.12.1987 and Rs.20.00 Lac dated 06.08.1988*, instrument of Hypothecation of goods for Rs.40.00 Lac, Under taking to comply various terms and conditions on 13.08.1989 in favor of applicant bank (Exhibit No.A-95 to A-99) further defendant No.1(Company) on passed board resolution 02.08.1989 request to the applicant bank to revised/enhanced the credit facilities of Rs.175.00 Lac upon defendant No.1 signed and executed various loan and security documents i.e. Demand Promissory Note for Rs.25.00 Lac in addition to D.P. Note for Rs.100.00 Lac dated 23.07.1984, for Rs.20.00 Lac dated 25.01.1986, Rs.34.00 Lac dated 31.10.1986 and Rs.21.00 Lac on 06.08.1988, letter of continuing Security for Rs.25.00 Lac *in addition for Rs.100 Lac belongs dated 23.07.1984 and Rs.20.00 Lac dated 25.01.1986, Rs.34.00 Lac dated 31.10.1986 and Rs.21.00 Lac dated 06.08.1988*, instrument of Hypothecation of goods for Rs.25.00 Lac, Undertaking not to allow withdrawal of deposits of directors and their family members with the company without prior with written consent of bank, instrument of additional security, Under taking to Utilise the facilities advanced by the bank for 9T.A.385 of 2002

the purpose for sanctioned, Undertaking to comply with various terms and conditions, Hypothecation of Book Debts for Rs.25.00 Lac dated 12.08.1989, Instrument of Hypothecation of movable machinery for Rs.25.00 Lac, General form of Guarantee for Rs.8,60,89,281.55/- by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due on 12.08.1989 in favor of applicant bank(Exhibit No.A-100 to A-110) further defendant No.1(Company) on passed board resolution 02.07.1990 request to the applicant bank to revised/enhanced the credit facilities of i.e. Cash credit(hypothecation of goods) limit of Rs.200.00 Lac was enhanced to Rs.220.00 Lac, Cash Credit(hypothecation of Books Debts) limit of Rs.140.00 Lac was enhanced to Rs.150.00 Lac, Bill discounting limit of Rs.290.00 Lac was enhanced to Rs.320.00 Lac, Fresh Term loan of Rs.40.00 Lac, INLAND letter of credit of Rs.80.00 Lac was enhanced to Rs.100.00 Lac Bank guarantee limit of Rs.20.00 Lac was enhanced to Rs.80.00 Lac, upon defendant No.1 signed and executed various loan and security documents i.e. Demand Promissory Note for Rs.20.00 Lac in addition to D.P. Note for Rs.100.00 Lac dated 23.07.1984, for Rs.20.00 Lac dated 25.01.1986, Rs.34.00 Lac dated 31.10.1986, Rs.21.00 Lac dated 06.08.1988 and Rs.25.00 Lac dated 12.08.1989, letter of continuing Security for Rs.20.00 Lac *in addition for Rs.100 Lac belongs dated 23.07.1984 and Rs.20.00 Lac dated 25.01.1986, Rs.34.00 Lac dated 31.10.1986, Rs.21.00 Lac dated 06.08.1988 and Rs.25.00 Lac dated 12.08.1989*, instrument of Hypothecation of goods for Rs.20.00 Lac, letter of B.P. Undertakings(inland bill), letter Undertaking charging various securities, Demand Promissory Note for Rs.10.00 in addition to D.P. Note for Rs.45.00 Lac dated 23.07.1984, for Rs.5.00 Lac dated 23.01.1985, Rs.30.00 Lac dated 18.12.1987, Rs.20.00 Lac dated 06.08.1988 and Rs.40.00 Lac dated 13.03.1989, letter of continuing Security for Rs.10.00 Lac *in addition earlier for Rs.40 Lac belongs dated 23.07.1984, Rs.5.00 Lac dated 23.01.1985, Rs.30.00 Lac dated 18.12.1987, Rs.20.00 Lac dated 06.08.1988 and Rs.40.00 Lac dated 13.08.1989*, Undertaking to comply with various terms and conditions of sanctioned in respect to the hypothecation of Book debts, Hypothecation of Book Debts for Rs.10.00 Lac, Undertaking to comply 10T.A.385 of 2002

with various terms and conditions, Undertaking not to allow withdrawal of deposits of directors and their family members without the prior written permission, instrument of addition security hypothecating all furniture fixtures fittings with office equipment vehicles and stationery, Undertaking to comply various terms and conditions including that bank shall be entitled to change the contractual rate of Interest at its directions without any intimation to the company to bring it in conformity with rate of interest prescribed by the Reserve bank of India or other eventuality such as reintroduction of interest tax and it will be binding on the company as if such changes were incorporated in the documents executed by the company Instrument of Hypothecation of movable machinery for Rs.140.00 Lac, General form of Guarantee for Rs.10,80,89,281.55/- by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Instrument of Hypothecation of goods for Rs.160.00 Lac, Hypothecation of book Debts for Rs.170.00 Lac on 17.07.1990 in favor of applicant bank(Exhibit No.A-111 to A-128) in between applicant bank sanctioned two Bridge loan in 1990 of Rs.10.00 Lac and Rs.25.00 Lac later on were settled and further defendant No.1(Company) on passed board resolution 25.03.1991 request to the applicant bank to grant adhoc Cash Credit (Hypothecation of stocks) facility of Rs.25.00 Lac as raising it from Rs.220.00 Lac to Rs.245.00 Lac upon defendant No.1 signed and executed various loan and security documents i.e. Demand Promissory Note for Rs.25.00 Lac in addition to D.P. Note for Rs.100.00 Lac dated 23.07.1984, for Rs.20.00 Lac dated 25.01.1986, Rs.34.00 Lac dated 31.10.1986, Rs.21.00 Lac dated 06.08.1988, Rs.25.00 Lac dated 12.08.1989 and Rs.20.00 Lac dated 17.07.1990, instrument of Hypothecation of goods for Rs.25.00 Lac, letter of continuing Security for Rs.25.00 Lac *in addition for Rs.100 Lac belongs dated 23.07.1984 and Rs.20.00 Lac dated 25.01.1986, Rs.34.00 Lac dated 31.10.1986, Rs.21.00 Lac dated 06.08.1988, Rs.25.00 Lac dated 12.08.1989 and Rs.20.00 Lac dated 17.07.1990* Hypothecation of book debts for Rs.25.00 Lac, instrument of Hypothecation of machinery for Rs.25.00 Lac, General form of Guarantee for Rs.11,05,89,281.55/- by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 11T.A.385 of 2002

7 are co-extensive, Jointly and severally Liable to pay the entire amount due Undertaking to comply various terms and conditions, Undertaking not to allow withdrawal of deposit of directors and their family members with out the prior written permission, instrument of additional security for hypothecating all furniture, fixtures and fittings with Office equipments vehicles and stationery on 26.03.1991 in favor of applicant bank (Exhibit No.A-129 to A-138) defendant No.1(Company) on passed board resolution 27.09.1991 request to the applicant bank to revised/granted the various credit facilities as Cash Credit(Hypothecation of Books Debts) Limit of Rs.150.00 Lac was enhanced to Rs.200.00 Lac, Bill Purchase/Bill discounting limit of Rs.320.00 Lac was enhanced to Rs.370.00 Lac upon defendant No.1 signed and executed various loan and security documents i.e. Demand Promissory Note for Rs.50.00 Lac in addition to D.P. Note for Rs.45.00 Lac dated 23.07.1984, for Rs.5.00 Lac dated 23.01.1985, Rs.30.00 Lac dated 18.12.1987, Rs.20.00 Lac dated 06.08.1988, Rs.20.00 Lac dated 13.03.1989, Rs.40.00 Lac dated and Rs.10.00 Lac dated 17.07.1990, Hypothecation of book debts for Rs.50.00 Lac, instrument of Hypothecation of goods for Rs.100.00 Lac instrument of Hypothecation of machinery for Rs.140.00 Lac, Undertaking not to allow withdrawal of deposits of directors and their family members with out the prior written permission, instrument of addition security hypothecating all furniture fixtures fittings with office equipment vehicles and stationery, Undertaking to comply various terms and conditions letter of B.P. Undertakings(inland bill), Instrument charging various securities, letter of continuing Security for Rs.50.00 Lac *in addition earlier for Rs.45 Lac belongs dated 23.07.1984, Rs.5.00 Lac dated 23.01.1985, Rs.30.00 Lac dated 18.12.1987, Rs.20.00 Lac dated 06.08.1988, Rs.40.00 Lac dated 13.08.1989 and Rs.10.00 Lac dated 17.07.1990*, General form of Guarantee for Rs.12,05,89,281.55/- by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Undertaking to comply with various terms and conditions in respect of hypothecation, Hypothecation of Book debts for Rs.50.00 Lac on 28.09.1991 in favor of applicant bank(Exhibit No.A-129 to A-152) further defendant No.1(Company) on passed board resolution 17.02.1992 request to the

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12T.A.385 of 2002

applicant bank to revised/enhanced the credit facilities of i.e. Cash Credit(hypothecation of stocks) limit of Rs.220.00 Lac was enhanced to Rs.325.00 Lac, Fresh Term loan of Rs.250.00 Lac for 100% E.O.U. tyre/tube Unit, Bill discounting limit of Rs.370.00 Lac was enhanced to Rs.455.00 Lac, inland letter of credit limit of Rs.100.00 Lac was enhanced to Rs.120.00 Lac, Fresh Demand Loan of Rs.6.00 Lac for purchasing Vehicle, Fresh Term loan for Rs.10.00 Lac and Specific Foreign letter of US\$ 3,59,554/-, upon defendant No.1 signed and executed various loan and security documents for enhancement i.e. Demand Promissory Note for Rs.105.00 Lac in addition to D.P. Note for Rs.100.00 Lac dated 23.07.1984, for Rs.20.00 Lac dated 25.01.1986, Rs.34.00 Lac dated 31.10.1986, Rs.21.00 Lac dated 06.08.1988, Rs.20.00 Lac dated 12.08.1989 and Rs.20.00 Lac dated 17.07.1990, letter of continuing Security for Rs.105.00 Lac *in addition for Rs.100 Lac belongs dated 23.07.1984, Rs.20.00 Lac dated 25.01.1986 Rs.34.00 Lac dated 06.08.1988, Rs.25.00 Lac dated 12.08.1989, Rs.20.00 Lac dated 17.07.1990 and Rs.25.00 Lac dated 26.03.1991*, instrument of Hypothecation of goods for Rs.105.00 Lac, Demand Promissory Note for Rs.250 Lac, Hypothecation of movable machinery for Rs.250.00 Lac, letter of Installment in respect to the term loan of Rs.250.00 Lac Demand Promissory Note For Rs.10.00 Lac, Instrument of Hypothecation of movable machinery for Rs.10.00 Lac, letter of Installment in respect of term loan of Rs.10.00 Lac, Letter of B.P. Undertaking, Instrument of Hypothecation of goods for Rs.371.00 Lac, General form of Guarantee for Rs.16,81,89,281.55/- by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Instrument of Hypothecation of book Debts for Rs.476.00 Lac as collateral security, instrument of Hypothecation of movable machinery for Rs.216.00 Lac as collateral security, instrument of additional security hypothecating all furniture, fixtures and office fittings equipments, vehicles and stationery, Undertaking to comply with the various terms and conditions, Undertaking not to allow withdrawal of deposit by directors and their family members without prior written permission from bank, Under taking to Utilise the facilities advanced by the bank for the purpose for sanctioned on 18.02.1992 in 13T.A.385 of 2002

favor of applicant bank(Exhibit No.A-153 to A-171) further defendant No.1(Company) on passed board resolution 22.09.1992 request to the applicant bank to revised/enhanced the credit facilities of i.e. Cash Credit(hypothecation of stocks) limit of Rs.325.00 Lac was enhanced to Rs.400.00 Lac, Cash Credit (Hypothecation of Book Debts) of Rs.200.00 Lac enhanced to Rs.275.00 Lac upon defendant No.1 signed and executed various loan and security documents for enhancement i.e. Demand Promissory Note for Rs.75.00 Lac Lac in addition to D.P. Note for Rs.100.00 Lac dated 23.07.1984, for Rs.20.00 Lac dated 25.01.1986, Rs.34.00 Lac dated 31.10.1986, Rs.21.00 Lac dated 06.08.1988, Rs.25.00 Lac dated 12.08.1989, Rs.20.00 Lac dated 17.07.1990, for Rs.25.00 Lac dated 26.03.1991 and Rs.105 Lac dated 18.02.1992, letter of continuing Security for Rs.75.00 Lac *in addition for Rs.100 Lac belongs dated 23.07.1984, Rs.20.00 Lac dated 25.01.1986 Rs.34.00 Lac dated 31.10.1986, Rs.21.00 Lac dated 06.08.1988, Rs.25.00 Lac dated 12.08.1989, Rs.20.00 Lac dated 17.07.1990, Rs.25.00 Lac dated 26.03.1991 and Rs.105 Lac dated 18.02.1992*, instrument of Hypothecation of goods for Rs.75.00 Lac, Demand Promissory Note for Rs.75 Lac *in addition earlier for Rs.45 Lac belongs dated 23.07.1984, Rs.5.00 Lac dated 23.01.1985, Rs.30.00 Lac dated 18.12.1987, Rs.20.00 Lac dated 06.08.1988, Rs.40.00 Lac dated 13.08.1989, Rs.10.00 Lac dated 17.07.1990 and Rs.50.00 Lac dated 28.09.1991*, Hypothecation of book Debts for Rs.75.00 Lac on all Hypothecation letter continuing security of Rs.75.00 Lac of Cash Credit (Hypothecation of Book Debts) *in addition earlier for Rs.45 Lac belongs dated 23.07.1984, Rs.5.00 Lac dated 23.01.1985, Rs.30.00 Lac dated 18.12.1987, Rs.20.00 Lac dated 06.08.1988, Rs.40.00 Lac dated 13.08.1989, Rs.10.00 Lac dated 17.07.1990 and Rs.50.00 Lac dated 28.09.1991*, Power of attorney in respect of Hypothecation of Book debts, Undertaking not to include book debts of associate concern Instrument of Hypothecation of goods for Rs.75.00 Lac as collateral security of Cash credit (hypothecation of Book debts) Instrument of Hypothecation of goods for Rs.75.00 Lac as collateral security of Cash Credit (Hypothecation of stocks) of all hypothecation , instrument of charging various securities, General form of Guarantee for Rs.1648/- Lac by with defendant Nos.2 to 14T.A.385 of 2002

7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, instrument of additional security hypothecating all furniture, fixtures and office fittings equipments, vehicles and stationery, Undertaking to comply with the various terms and conditions, Undertaking not to allow withdrawal of deposit by directors and their family members without prior written permission from bank on 18.02.1992 in favor of applicant bank(Exhibit No.A-172 to A-187) further defendant No.1(Company) on passed board resolution 11.11.1992 request to the applicant bank to revised/enhanced the credit facilities of i.e. Cash Credit (Hypothecation of Book Debts) of Rs.275.00 Lac enhanced to Rs.480.00 Lac by decreasing B.P./B.D. limit from Rs.455.00 Lac to Rs.250.00 Lac, Fresh Term loan of Rs.6.00 Lac for 100% export oriented unit cotton yarn project, Specific Foreign letter of Credit Swiss Franc 30,77,088/- upon defendant No.1 signed and executed various loan and security documents for enhancement i.e. Demand Promissory Note for Rs.205.00 Lac in addition to D.P. Note for Rs.45.00 Lac dated 23.07.1984, for Rs.5.00 Lac dated 23.01.1985, Rs.30.00 Lac dated 18.12.1987, Rs.20.00 Lac dated 06.08.1988, Rs.40.00 Lac dated 13.03.1989, Rs.10.00 Lac dated 17.07.1990, for Rs.50.00 Lac dated 28.09.1991 and Rs.75 Lac dated 22.09.1992, letter of continuing Security for Rs.205.00 Lac for Cash Credit (Hypothecation of Book Debts) *in addition earlier for Rs.45 Lac belongs dated 23.07.1984, Rs.45.00 Lac dated 23.07.1984, Rs.5.00 Lac dated 23.01.1985 Rs.30.00 Lac dated 18.12.1987, Rs.20.00 Lac dated 06.08.1988, Rs.40.00 Lac dated 13.08.1989, Rs.10.00 Lac dated 17.07.1990, Rs.50.00 Lac dated 28.09.1991 and Rs.75 Lac dated 22.09.1992,* Hypothecation of Book Debts for Rs.205.00 Lac, Power of attorney in respect of Hypothecation of Book debts, Undertaking not to include book debts of associate concern, Demand Promissory Note for Rs.600.00 Lac, Hypothecation of movable machinery for Rs.600.00 Lac, Letter of Installment in respect of term loan Rs.600.00 Lac, Instrument of Hypothecation of goods for Rs.600.00 Lac as collateral security of Cash credit (hypothecation of goods), Hypothecation of book debts for Rs.395 Lac as collateral security of Cash Credit (Hypothecation of Book Debts) of all hypothecation , instrument of Hypothecation of movable machinery as collateral 15T.A.385 of 2002

security to secure in various fund and non fund based facility aggregating to Rs.2,248/- Lac, General form of Guarantee for Rs.2248/- Lac by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, instrument of additional security hypothecating all furniture, fixtures and office fittings equipments, vehicles and stationery, Undertaking not to undertake any major expansion diversification invest any money in associate concern and to have adequate insurance against all possible risk, Stocks, plant and machinery hypothecation and the building mortgage, Undertaking not to allow withdrawal of deposit by directors and their family members without prior written permission from bank, letter of B.P. Undertaking(inland Bills), Undertaking in respect of securities issued by government and local authorities debentures, all good document, Resolution dated 26.02.1993 stating that Mr. K.L. Dewan could not signed the guarantee dated on 12.11.1992 hence request him to signed the separate guarantee and General form of Guarantee for Rs.2248/- Lac by with defendant No.5 as Guarantors defendant No.5 co-extensive, Jointly and severally Liable to pay the entire amount due to the limit extension on 12.11.1992 in favor of applicant bank(Exhibit No.A-188 to A-207) further defendant No.1(Company) on passed board resolution 30.03.1993 request to the applicant bank to revised/enhanced the credit facilities of i.e. Cash Credit (Hypothecation of Book Debts) of Rs.30.00 Lac bill purchase/Bill discounting limit of Rs.20.00 Lac upon defendant No.1 signed and executed various loan and security documents for enhancement i.e. Demand Promissory Note for Rs.30.00 Hypothecation of Book Debts for Rs.30.00 Lac hypothecating all the book debts, Letter of B.P. Undertaking((INLAND BILL), Instrument of Hypothecation of goods for Rs.50.00 Lac as collateral security of Cash credit (hypothecation of goods), Instrument of Hypothecation of movable machinery to secure various fund based and non fund based facility aggregating to Rs.50.00 Lac, General form of Guarantee for Rs.50.00 Lac by with defendant Nos.2 to 7 on 30.03.1993 in favor of applicant bank as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due(Exhibit No.A 208 to A-214) *Defendant No.1 company consortium of Bank of Baroda and*

16T.A.385 of 2002

*Punjab National Bank formed in terms of R.B.I guidelines on which Bank of Baroda was designated as leader of consortium Sharing various working capital facilities as agreed between BOB and PNB as BOB stated in first schedule of working capital agreement* defendant No.1(Company) on passed board resolution 26.02.1993 request to the applicant bank/PNB to revised/enhanced the credit facilities of i.e.

- (i) Cash Credit(hypothecation of stocks) limit of Rs.340.00 Lac of BOB as of Rs.60.00 Lac of PNB ,

- (ii) Cash Credit (Hypothecation of Book Debts) of Rs.408.00 Lac of BOB as of Rs.72.00 Lac of PNB

- (iii) Bill discounting /Bill Purchase of Rs.213.00 Lac of BOB as of Rs.37.00 Lac of PNB

- (iv) Inland/Foreign letter of credit of Rs.102.00 Lac of BOB as of Rs.18.00 Lac of PNB

- (v) Guarantee Limit of Rs.68.00 Lac of BOB as of Rs.12.00 Lac of PNB

**Total Rs.1,131 Lac of BOB Sharing 85% as of Rs.199 Lac of PNB** **Sharing 15%**

Authority letter dated 26.03.1993 signed and executed senior branch Manager of PNB meerut in favor of BOB vide nominating, appointing and constituting BOB as lawful attorney therefore between BOB, PNB and defendant No.1 company signed and executed various loan and security documents i.e. working capital consortium agreement, Inter se agreement, Joint deed of Hypothecation, Deed of personal guarantee dated 10.06.1993 by with defendant Nos.2 to 7 as guarantor defendants are co-extensive, Jointly and severally liable to pay the dues of principal borrower on 24.03.1993 on certain terms and conditions further defendant No.1(Company) on passed board resolution 29.06.1994 request to the applicant bank to revised/enhanced the credit facilities of i.e. Cash Credit (Hypothecation of Book Debts) of Rs.340.00 Lac enhanced to Rs.365.00 Lac, Packing credit limit from Rs.150.00 Lac, Foreign Bills purchased/discounting Limit of Rs.250.00 Lac, INLAND /Foreign letters of credit Rs.120.00 Lac, Bank guarantee Limit of Rs.300.00 Lac, upon defendant No.1 signed and executed various loan and security documents i.e. Demand Promise Note for Rs.25.00 Lac letter of continuing Security for Rs.25.00 Lac in addition 17T.A.385 of 2002

*belongs to earlier letter of continuing securities, instrument of Hypothecation of goods for Rs.25.00 Lac, letter of B.P. Undertaking(Foreign bills) Undertaking in respect of securities issued by government and local authorities, debenture, all goods document, Demand Promissory Note for Rs.150 Lac for packing credit as RBI guidelines, instrument of Hypothecation of goods for Rs.150.00 Lac for 100% E.O.U. cotton Yarn and 100% E.O.U. Tyre and Tube Unit, letter of continuing security amounting to Rs.150.00 Lac, Trust receipt export for Rs.150.00 Lac for packing credit account, letter of Undertaking for penal interest rate (Packing credit advance) Rs.150.00 Lac, instrument of Hypothecation of goods for Rs.625.00 Lac as collateral security for all hypothecations, instrument of hypothecation of machinery executed as collateral security to secure fund based on non fund based facility aggregating to Rs.650.00 Lac, General form of Guarantee for Rs.650.00 Lac by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Instrument of Hypothecation of Book debts as collateral security of all the credit facilities CC PC FBP LC and guarantee for Rs.650 Lac on 30.03.1993 in favor of applicant bank(Exhibit No.A-215 to A-236) defendant No.1(Company) on passed board resolution 29.02.1996 request to the applicant bank to revised/granted the credit facilities on branch letter No. BR/MRT/ADV/95 dated 09.10.1995 applicant bank sanctioned as enhanced the various credit facilities as Cash Credit (Hypothecation of goods)limit of Rs.365 Lac was enhanced to Rs.540.00 Lac, Cash Credit (Hypothecation of Books Debts) Limit of Rs.425.00 Lac was enhanced to Rs.557.00 Lac, Doc. Usance bill discounting of Rs.240.00 Lac reduced to Rs.187.00 Lac, Foreign Bill Purchased/discounting limit of Rs.250.00 Lac was enhanced to Rs.376.00 Lac, INLAND/foreign letter of credit Rs.120.00 Lac was enhanced to Rs.233.00 Lac, Bank guarantee limit of Rs.300.00 Lac was reduced to Rs.233.00 Lac, on passed Board resolution dated 29.06.1996 upon defendant No.1 signed and executed various loan and security documents i.e. Demand Promissory Note for Rs.175.00 Lac, letter of continuing security for Rs.175.00 Lac in addition to earlier letter of continuing securities for cash credit(hypothecation of goods limits), instrument of Hypothecation of goods for*

18T.A.385 of 2002

Rs.175.00 Lac, Demand Promissory Note for Rs.149.00 Lac for cash credit(Hypothecation of book debts), instrument of Hypothecation of Book debts for Rs.149.00 Lac, Letter of continuing security for Rs.149.00 Lac in continuing to the earlier letters of continuing securities, letter of Undertaking not to include books debt of associates concerns, power of attorney in respect to the hypothecations, General form of Guarantee for Rs.30,92,27,000/- by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Demand Promissory Note for Rs.26.00Lac, instrument of hypothecation of goods for Rs.26.00 Lac, Letter of continuing security for packing credit Rs.26.00 Lac, Undertaking to liquidate each specific credit advance within 90 days Undertaking to authorizing bank to charge usual rate of Interest If defendant No.1 fails to liquidate the packing credit account within stipulated time period, trust receipt for Rs.26.00 Lac, Letter of B.P. Undertaking(foreign Bills), Undertaking in respect of securities issued by government and local authorities debenture, all goods documents etc, Instrument of Hypothecation of goods for Rs.795.00 Lac, Instrument of Hypothecation of Book debts for Rs.1022 Lac as collateral security for cash credit(hypothecation of book debts), Instrument of Hypothecation of Machinery as collateral security to secure fund based or non fund based credit facility aggregating to the Rs.1171.00 Lac, General form of Guarantee for Rs.1171.00 Lac by with defendant Nos.2 to 7 as Guarantors defendant Nos.2 to 7 are co-extensive, Jointly and severally Liable to pay the entire amount due, Instrument of additional security as collateral security, Undertaking not to allow withdrawal of deposits of directors and their family without prior written consent of the bank Undertaking to comply with all the terms and conditions, Undertaking giving details of Legal Heirs of guarantors, Under taking to create second charge on the fixed assets of 100% EOU Cotton yarn division on pari passu basis for working capital facility and plant and machinery of tyre and tubes on 09.03.1996 in favor of applicant bank(Exhibit No.A-237 to A-263) further defendant No.1(Company) on passed board resolution 29.06.1994 request to the applicant bank agreed to allow interchangeability from BP/BD Limit to cash credit(Hypothecation of book debts) to the extent of Rs.135.00 Lac, on passed board 19T.A.385 of 2002

resolution dated 20.10.1997 defendant No.1 signed and executed various necessary security documents i.e. Demand Promissory Note for Rs.135.00 Lac letter of continuing Security for Rs.135.00 Lac in addition belongs to earlier letter of continuing securities, and after introduction of credit facility system under RBI guidelines existing working capital facilities were bifurcated into working capital demand Loan, operative Cash Credit facility bill purchased/discounting facility as fund sanctioned under working capital limits by applicant bank for cash credit facility (hypothecation of goods) limit of Rs.540.00 Lac, Cash Credit(hypothecation of Book debts) limit of Rs.557.00 Lac and documentary bill discounting limit of Rs.187.00 Lac total of Rs.1284.00 Lac bifurcated <table> <tr> <td>(i) Cash Credit(hypothecation of stocks) of</td> <td>= Rs.256.80 Lac</td> </tr> <tr> <td>(ii) Working capital Demand Loan out of this Rs.890.20 Lac WCDL Limit a limit of</td> <td></td> </tr> <tr> <td>Rs.50.00 Lac was parked with Meerut Branch of Nanital Bank</td> <td>= Rs.840.20 Lac</td> </tr> <tr> <td>(iii) Documentary Bill discounting limit</td> <td>= Rs.187.00 Lac</td> </tr> <tr> <td><hr/>Total</td> <td><hr/>=Rs. 1284.00 Lac</td> </tr> </table>

*The current assets including plant and machineries are Hypothecated to the applicant bank on pari passu Charge basis with State bank of Patiala, PNB, UTI Bank Ltd. and Bank of Baroda Trustees(For Rs.1050.00 Lac in respect of 3 series of debentures) UTI has pari passu Charge on Movable Machineries on Only, upon applicant bank has exclusive Charge over the plant and Machineries out of term loan granted to defendant No.1.*

4. Further in order to secure the repayment of the bank dues, in respect to all the credit facilities of Rs.3,09,39,281.55/- dated 23.07.1984 the defendant No.1 through directors created the equitable mortgage of all that pieces and parels comprising to land and Buildings of his immovable properties as collateral **securities 1. I.e. land and Building of M/s Dewan Rubber Industries(Pvt.) Ltd. and (i) Title deed of Khasra No.44/3 situated at Village Rithani Pargana Tehsil and District Meerut (ii) Title deed of Khasra No.53 situated at Village Rithani Pargana Tehsil and District Meerut measuring 2500 Square yards(iii) Title deed of Khasra No.54 situated at Village Rithani Pargana Tehsil and District Meerut measuring 1512 Square Yards (iv) Title deed of Khasra No.55 situated at Village Rithani**

20T.A.385 of 2002

Pargana Tehsil and District Meerut measuring 2700 Square yards(v) Title deed of Khasra No.56 situated at Village Rithani Pargana Tehsil and District Meerut Measuring 2850 Square Yards(vi) Title deed of Khasra No.58 situated at Village Rithani Pargana Tehsil and District Meerut Measuring 2033.33 Square Yards. (vii) Title deed of Khasra No.58/1 situated at Village Rithani Pargana Tehsil and District Meerut measuring 1561.67 Square Yards. by depositing the Supplementary memorandum of title deed in favour of applicant bank dated 23.01.1985 for Rs.3,47,39,281.55/- and dated 11.06.1985 to secure additional limit in all Rs.4,07,39,281.55/-, 2. I.e. land and Building of M/s Dewan Rubber Industries(Pvt.) Ltd to secure additional limit of Rs.5,09,39,281.55/- dated 01.11.1985 and Original title deed bearing house No.20, situated on plot No.70 at Saket Meerut City by depositing the Supplementary memorandum of title deed in favour of applicant bank dated 25.01.1986 for Rs.5,53,39,281.55/-, dated 02.06.1986 to secure additional limit in all Rs.5,64,39,281.55/-, dated 31.10.1986 for Rs.6,98,39,281.55/- and dated 06.08.1988 to secure additional limit in all Rs.8,85,39,281.55/- and 3. I.e. land and Building of M/s Dewan Rubber Industries(Pvt.) Ltd to secure additional limit of Rs.8,35,89,281.55/- dated 06.08.1988 for three properties i.e. Sale deed bearing house No.310, situated at purva Sheikh Lal, Meerut with/ Sale deed of Kothi No.Old 60, new 244 total area 1300 Square yards situated at Shivaji Road Meerut with/ Title deed of Khasra Plot No.421/7 area 2000 Square Yards situated at Village Rithani District Meerut by depositing the Supplementary memorandum of title deed in favour of applicant bank dated 12.08.1989 for Rs.8,60,89,281.55/-, dated 17.07.1990 to secure additional limit in all Rs.10,80,89,281.55/-, dated 26.03.1991 for Rs.11,05,89,281.55/-, dated 28.09.1991 to secure additional limit in all Rs.12,05,89,281.55/- and dated 18.02.1992 to secure additional limit in all Rs.16,81,89,281.55/- (Exhibit No.A-264 to A-283) 4. I.e. land and Building of M/s Dewan Rubber Industries(Pvt.) Ltd to secure additional limit of Rs.1648.00 Lac dated 22.02.1992 for two properties i.e. Two title deed of Khasra No.40/2 Village Rithani Meerut area 831 Square Yards each and other properties 21T.A.385 of 2002

already mortgaged as mentioned by depositing the Supplementary memorandum of title deed in favour of applicant bank dated 12.11.1992 for Rs.2448.00 Lac, dated 01.08.1994 to secure additional limit in all Rs.3950.00 Lac, dated 18.03.1995 for Rs.4870.00 Lac, dated 09.03.1996 to secure additional limit in all Rs.5282.00 Lac and dated 23.11.1996 to secure additional limit in all Rs.6600.00 Lac 5. I.e. land and Building of M/s Dewan Rubber Industries(Pvt.) Ltd to secure additional limit of Rs.6200.00 Lac dated 16.05.1998 for two properties i.e. (i) Landed property situated at Village Rithani District Meerut Khasra No.58/1 area 1442 Square meter(ii) Landed property situated at Village Rithani District Meerut Khasra No.58/1 area 1442 Square meter and other properties already mortgaged as mentioned by depositing the Supplementary memorandum of title deed in favour of applicant bank dated 25.07.1995 for Rs.7865.00 Lac(Exhibit No.A-284 to A-291A) and in respect to the term loan of Rs.600.00 Lac granted to defendant No.1 of 100% E.O.U. textile Unit by *first pari passu Charge with F.I.* and other credits advance and further secured by the way of *second pari passu Charge on 30.10.1994 with State bank of Patiala PNB and first charge with F.I. Bank of Baroda* Upon all that part and parcel of free Hold land measuring 6.0838 hectare of Land comprising Khasra No.991P, 995p, 997, 997, 994, 1006, 1007, 1008, 1008P, 993, 994, 995, 1006, 1008P, situated at Village Daurala Tehsil- Sardhana District Meerut and all the credit facilities sanctioned to defendant No.1 secured by second charge on 04.05.1996 in respect to the immovable properties and fixed assets including plant and machinery defendant No.1(tyre/tube Unit) is with PICUP as detailed peace and parcel of free Hold land measuring 1056 Square yards out of khasra No.43, Purchase by Tej Ram and Sri Mool Chand of Village Rithani District Meerut vide registered Sale Deed dated 01.01.1992 as the applicant bank has pari passu Charge with BOB Trustees for debentures on immovable properties of defendant No.1 reclaimed rubber unit situated at A-3 Industrial Area Site No.3 Meerut Road Ghaziabad admeasuring 25,684 Square yards with all the plant and Machinery fixtures fittings in respect to the aforesaid credit facilities, in charge's search from Registrar of companies on position of charges applied o 22T.A.385 of 2002

defendant No.1 under common seal of directors, defendant Nos.2 to 7, defendant Nos.8 to 16 on entire assets, common guarantees movable machinery, plant and machinery book debts, Stocks and immovable properties and as acknowledged the debts and securities as confirming the balance (Exhibit No.A-268 to A-293)

<thead> <tr> <th>Sl. No.</th> <th>Nature of facility</th> <th>Date</th> <th>Exhibit No.</th> </tr> </thead> <tbody> <tr> <td>1.</td> <td>CC(Hypothecation of goods)</td> <td>06.04.1987</td> <td>A-294</td> </tr> <tr> <td>2.</td> <td>CC(Hypothecation of Book Debts)</td> <td>06.04.1987</td> <td>A-295</td> </tr> <tr> <td>3.</td> <td>BP/BD</td> <td>06.04.1987</td> <td>A-296</td> </tr> <tr> <td>4.</td> <td>DPG</td> <td>06.04.1987</td> <td>A-297</td> </tr> <tr> <td>5.</td> <td>CC(Hypothecation of goods)</td> <td>02.08.1989</td> <td>A-298</td> </tr> <tr> <td>6.</td> <td>BP/BD</td> <td>02.08.1989</td> <td>A-299</td> </tr> <tr> <td>7.</td> <td>Term loan I</td> <td>02.08.1989</td> <td>A-300</td> </tr> <tr> <td>8.</td> <td>Term loan II</td> <td>02.08.1989</td> <td>A-301</td> </tr> <tr> <td>9.</td> <td>CC(Hypothecation of Books Debt)</td> <td>02.08.1989</td> <td>A-302</td> </tr> <tr> <td>10.</td> <td>BP/BD</td> <td>02.08.1989</td> <td>A-303</td> </tr> <tr> <td>11.</td> <td>CC(Hypothecation of Book Debt)</td> <td>28.11.1990</td> <td>A-304</td> </tr> <tr> <td>12.</td> <td>CC(Hypothecation of goods)</td> <td>12.07.1991</td> <td>A-305</td> </tr> <tr> <td>13.</td>

<td>12.07.1991</td> <td>A-306</td> </tr> <tr> <td>14.</td> <td>BP/BD</td> <td>12.07.1991</td> <td>A-307</td> </tr> <tr> <td>15.</td> <td>Term loan</td> <td>12.07.1991</td> <td>A-308</td> </tr> <tr> <td>16.</td> <td>CC(Hypothecation of goods)</td> <td>05.10.1991</td> <td>A-309</td> </tr> <tr> <td>17.</td> <td>CC(Hypothecation of Book Debts)</td> <td>05.10.1991</td> <td>A-310</td> </tr> <tr> <td>18.</td> <td>Term Loan</td> <td>02.07.1993</td> <td>A-311</td> </tr> <tr> <td>19.</td> <td>Term Loan</td> <td>02.07.1993</td> <td>A-312</td> </tr> <tr> <td>20.</td> <td>Term Loan</td> <td>27.01.1995</td> <td>A-313</td> </tr> <tr> <td>21.</td> <td>Term Loan</td> <td>21.01.1995</td> <td>A-314</td> </tr> <tr> <td>22.</td> <td>CC(Hypothecation of stocks)</td> <td>09.03.1996</td> <td>A-315</td> </tr> <tr> <td>23.</td> <td>CC(Hypothecation of book debts)</td> <td>09.03.1996</td> <td>A-316</td> </tr> <tr> <td>24.</td> <td>W.C.D.L.</td> <td>09.03.1996</td> <td>A-317</td> </tr> <tr> <td>25.</td> <td>BP/BD</td> <td>09.03.1996</td> <td>A-318</td> </tr> <tr> <td>26.</td> <td>Packing Credit</td> <td>09.03.1996</td> <td>A-319</td> </tr> <tr> <td>27.</td> <td>Foreign Bills purchase</td> <td>09.03.1996</td> <td>A-320</td> </tr> <tr> <td>28.</td> <td>Term loan</td> <td>09.03.1996</td> <td>A-321</td> </tr> <tr> <td>29.</td> <td>Term loan</td> <td>09.03.1996</td> <td>A-322</td> </tr> <tr> <td>30.</td> <td>Book Debts</td> <td>04.03.1999</td> <td>A-323</td> </tr> <tr> <td>31.</td> <td>CC(Hypothecation of Stocks)</td> <td>04.03.1999</td> <td>A-324</td> </tr> <tr> <td>32.</td> <td>W.C.D.L.</td> <td>04.03.1999</td> <td>A-325</td> </tr> <tr> <td>33.</td> <td>BP/BD</td> <td>04.03.1999</td> <td>A-326</td> </tr> <tr> <td>34.</td> <td>Packing Credit</td> <td>04.03.1999</td> <td>A-327</td> </tr> <tr> <td>35.</td> <td>FBP/FBD</td> <td>04.03.1999</td> <td>A-328</td> </tr> <tr> <td>36.</td> <td>Term loan</td> <td>04.03.1999</td> <td>A-329</td> </tr> <tr> <td>37.</td> <td>Term loan</td> <td>04.03.1999</td> <td>A-330</td> </tr> </tbody> </table>

As the defendant No.1 availed the various aforesaid credit facilities granted by applicant bank but not maintain the loan accounts

5. For availing aforesaid Credit loan facility the applicant bank opened loan accounts in the name of defendant No.1/Limited Industries.

6. After availing the aforesaid credit facilities, the defendants fails to maintain financial discipline and also failed to comply with the terms and conditions of loan 23T.A.385 of 2002

agreements as not adhere to the financial discipline, as required in the matter the applicant bank made all possible efforts through oral persuasion, several applications, reminders, various letters etc reminded times to times to regularize the loan accounts but the defendants kept mum and have not come forward to make any efforts regarding payment of dues since loan account of defendants remained irregular as the defendants did not care to deposit the amount to adjust/regularize the loan account despite giving various assurances, consequently the said loan accounts of defendant No.1 is classified as NPA since 30.06.2000 as stop charging interest in the loan account of defendant No.1 from 30.06.2000 to 30.04.2001 in the meantimes the defendant No.1/company had acknowledged the dues 06.04.1987, 02.08.1989, 18.11.1990, 12.07.1991, 05.10.1991, 02.07.1993, 27.01.1995, 09.03.1996 and 04.03.1999 as the limitation has been extended thereafter the applicant-bank issued Legal Notice dated 31.03.2001(Exhibit No.A-331) on dues of Rs.22,90,26,600.85/- to the defendants being director/guarantor, requesting them to liquidate but failed as the loan account of the defendant No.1/company is still un-liquidated hence, the application has been instituted and became the Transferred Application.

7. As per books of the bank maintained in the usual and ordinary course of banking business, an outstanding of Rs.22,90,26,600.85(Rupees Twenty Two Crore, Ninety Lac, Twenty Six Thousand, Six Hundred and paisa Eighty Five Only)(Rs.3,27,40,111.74/- in Cash Credit (Hypothecation of Stock) A/c + Rs.1,56,11,654/- in Cash Credit(Hypothecation of Book Debt )A/c + Rs.10,89,60,040/- in Working Capital Demand loan A/c + Rs.46,88,938/- in Term loan I(Rs.250 Lac EOU Tyre Tube Unit) A/c + Rs.2,46,56,202/- in Term loan II(Rs.600 Lac EOU Textile Unit) A/c + Rs.12,33,455/- in BP/BD Limit A/c + Rs.1,86,56,813/-in Packing Credit Unit A/c + Rs.1,46,87,494/- in Foreign bills purchase' 100% EOU cotton Yarn Unit A/c + Rs. 8,53,897/- in Advance Bill(devolved Letter of credits) Tyre tube Division + Rs.57,21,965/- in 100% EOU cotton Yard Division A/c + Rs.10,83,421.70/- in Current A/c No.2085 + Rs.1,32,608.51/- in Current A/c No.2353) including interests upto 30.04.2001 were lying due for payment, for which the defendants are jointly and severally liable 24T.A.385 of 2002

repay the same, which they did not pay despite repeated requests and demands. The applicant Bank has filed the copy of Statement of Accounts (Exhibit No.A-332 to A-343) as mentioned to this Transferred application.

8. The cause of action for in filing of the present Transferred application arose firstly when Credit facilities were sanctioned on 09.07.1984 by the applicant bank on passed board of Directors Resolutions dated 23.07.1984 as the same were availed by defendants/borrowers on the execution of necessary security documents and mortgages as collateral securities of immovable properties and applicant bank already enhanced/ revised the credit facilities of defendant Nos.1 and directors on 23.01.1985, 25.01.1986, 02.04.1986, 02.09.1986, 31.10.1986, 18.12.1987, 06.08.1988, 13.03.1989, 12.08.1989, 17.07.1990, 28.09.1991, 18.02.1992, 22.09.1992 and 12.11.1992, the cause of action further arose in 1993 when consortium of BOB and PNB was formed in need of defendant No.1 jointly executed documents on 24.03.1993, 09.03.1996 and 21.10.1997 by defendant No.1 as confirming the balance on various occasions on 06.04.1987, 02.08.1989, 18.11.1990, 12.07.1991, 05.10.1991, 02.07.1993, 27.01.1995, 09.03.1996 and 04.03.1999 and confirmed the liabilities the cause of action arose finally on 31.03.2001 when the applicant bank had issued sent Legal Notice to the defendants recalling the entire outstanding dues as they failed to repay the same.

9. The summons were served upon defendants through registered posts as well as paper publication, it is pertinent to mentioned that the defendant No.2,3,4,5&7 died leaving behind their legal heirs who have been substituted and arrayed as defendants to this transferred applications.

10. In order dated 11/07/2005 of this Tribunal applicant bank moved an application for the substitution of LRs of deceased defendant Nos.2&4 and In order dated 31/05/2006 substitution of LRs of deceased defendant Nos.2&4 amendment taken up for consideration and allowed substitute of LRs of deceased defendant No.2 is substituted by defendant Nos.2/1, 2/2, 2/3 & 2/4 and substitute of LRs of deceased defendant No.4 is substituted by defendant Nos.4/1, 4/2, 4/3, 4/4, 4/5 & and is directed to incorporate the amendment in the T.A. within 15 days before 25T.A.385 of 2002

Registrar of this Tribunal and and **In order dated 24/11/2020** substitution of LRs of deceased defendant No.5 had expired on 03.03.2020 and moved early hearing application as application allowed substitute of LRs of deceased defendant No.5 and **In order dated 07.01.2021** again applicant bank counsel has moved the substitution application of LRs of the deceased defendants in T.A from the circumstance of case substitution application moved by the bank is allowed the bank is directed to incorporate the substitution in the T.A. as take steps to for service upon the newly added defendants, **In order dated 27.01.2021** again applicant bank seeks time to comply order dated 07.01.2021 passed by tribunal with regard to substitution of LRs of the deceased defendants in T.A is here by allowed and **In order dated 17.08.2022** the T.A. is place the records with T.A. No.02/2011 and T.A. No.03/2011

11. The summons were served upon defendants through registered posts as well as paper publication the defendants appears in regular hearing of the matter as since during the hearing on 02.08.2024 counsel of defendants appears and prays to took the matter for consideration as the application dated 23/07/2024 by Mohd. Murtaza Hasan counsel for the defendant No.5 is already on record.

12. **Prayer allowed** therefore the matter heard against defendant No.5, on record application dated 23/07/2024 filed by Mohd. Murtaza Hasan counsel for defendant No.5 along with joint and several liabilities of defendant Nos.1 to 4 & 6 to16.

13. The defendants appearing in proceedings from the record it is reflected that counsel for LRs.5/1 to 5/3, have filed their written statement on :

Mr. Mohd. Murtza Hasan representing the LRs, 5/1, 5/2 and 5/3 filed his written statement and written submission stating that **LR.5/1, Smt. Raj Rani Dewan expired on 29.08.2023** As such her name is to be deleted from the array of parties further legal heir of deceased defendant No.5 have neither any connection with the borrower company M/s Dewan Rubbers industries Ltd. in any capacity what so ever nor they have executed any documents with the applicant financial institution or given any acknowledgement of any liabilities/dues of the financial institution they have not inherited any movable or immovable property of late defendant No.5 i.e. Kasturi Lal Dewan after the death of defendant No.3 dated 03.03.2020 for deleting their names from the array of defendants as after the death of defendant No.5 on 26T.A.385 of 2002

03.03.2020 that the late defendant No.5 has 1/5^th Share in the property 62, Shivaji Road, Meerut defendant Nos.3&4 had taken a housing loan as co- applicant in July 1997 from BOB housing finance Ltd. which was later merged with Bank of Baroda and defendant Nos.3&4 mortgaged their share in the property 62 Shivaji Road, with erstwhile BOB housing finance Ltd. for recovery of their loan BOB Housing finance Ltd. filed a civil suit in district court Meerut which was transferred to this Hon'ble Tribunal and registered as T.A. No.3 of 2011 and the share of defendant No.5 in the property not devolved. As the defendant No.5 had 87400 Shares in the borrower company but neither claimed the share nor received any share and further relinquished his right nor they claim the same in future, and also the share of 7400 in Dewan Tyres Ltd, 900 Share in the name of defendant No.5(M/s Kasturi Lal & Sons HUF), share of 58800 in Dewan Steels Ltd and 3700 Share in the name of defendant No.5(M/s Kasturi Lal & Sons HUF) nor the share were came in the possession or transferred in name of defendant No.5 as such the personal guarantee of defendant No.5 would not extend to the legal heirs, it has been argued that in T.A. No.473 of 2002 this Tribunal has after considering the application of legal heirs of late Kasturi Lal Dewan has exempted them from any liabilities arising out of the personal guarantee of late Late Kasturi Lal Dewan(*para 18 of Judgment of TA 473 order passed dated 24.04.2023*).

14. As the defendant Nos.8 to 16 are the consortium members the defendant No.14 is BOB is attending the proceeding of the case, the defendant No.1 company had failed to file any written statement only a written submission filed by it in which it had not denied the availment of credit facility and stated that due to the death of Managing Director no meeting of the company had taken place after 2004, the T.A. may be decided moreover unless the applicant F.I. is held to be entitled for recovery of the amount against the borrower, it cannot become entitled for adjustment of any amount as sought in the application, the loan is given by Punjab National Bank was subject to pari passu agreement between the members of the consortium under the leadership of IFCI Ltd. New Delhi, Any recovery to be made through adjustment of the amount lying in the form of FDR would also be subject to pari passu agreement between the lenders/members of the consortium the defendant No.1 does not have an objection, if the T.A. and all pending application are decided.

15. As amendment incorporated in compliance of order dated 07.10.2003 deleting the names of defendant Nos.2&7 from the array of parties impleaded the Legal heirs of defendant Nos.2/1, 2/2, 2/3 & 2/4 and impleaded the Legal heirs of 27T.A.385 of 2002

defendant Nos.7/1, further after a long period amendment incorporated dated 02.02.2021 in compliance of order dated 07.01.2021 deleting the names of defendant Nos.3&5 from the array of parties impleaded the Legal heirs of defendant Nos.3/1, 3/2, 3/3, 3/4, 3/5 & 3/6 and impleaded the Legal heirs of defendant Nos.5/1, 5/2 & 5/3 by the applicant bank, the loan account of defendant Nos.1/company was classified as NPA he further stated that during the pendency of T.A. all the guarantors along arrays of parties as defendant Nos.2,3,4,5&7 died No Board of Directors meeting could have been held after 2004 and further stated that the admittedly loan given by the Punjab National Bank was subject to pari passu agreement between the members of the consortium under the leadership of Industrial Financial Corporation of India Ltd. they also stated that the recovery made through adjustment of amount laying in the form of FDR would also be subject to pari passu agreement between the lenders/members of the consortium.

16. The defendant Nos.5/1 to 5/3 have also filed one application for deleting their name from the array of the defendants they also filed short written statement stating therein that after the death of defendant No.5 Kasturi Lal Dewan expired on 03.03.2020 the applicant financial institution impleaded them as legal heirs as defendant No.5/1(Smt. Raj Rani Dewan, Wife), 5/2 (Puneet Dewan, Son) and 5/3(Ritu Dewan Daughter) He relied upon the Judgment passed by the *Hon'ble NCLT, kolkata bench in Bank of Baroda stressed Asset management Branch Vs. Ms. Divya Jalan CP(IB) No.363/KB/2021* where in the Hon'ble court has observed that as Under :

- (i) *"Personal guarantee referred to an individual who given surety in a contract of guarantee on behalf of the corporate Debtor"*

- (ii) *"Application to adjudicating authority for insolvency Resolution process for personal Guarantee to corporate Debtor Regulation 2019, clears defines that a personal guarantee to a corporate debtor is person against whom guarantee has been involved and there is outstanding dues left party or fully. The definition does not include the "legal heirs"*

28T.A.385 of 2002

(iii) " In the instant case, the petition can take appropriate steps for recovery the guaranteed amount from the assets/estates of the deceased personal guaranteee rather than the personal assets of the legal heirs of the personal guarantors, further the legislature is very much clear in defining the term "Personal Guarantor" the code talk about the estate/assets of the personal guarantor only"

(iv) " When the section 95 application is filed the asset of the personal guaranteee is hit by moratorium and if we put the legal heirs of the deceased Personal Guarantor into the shoes of the personal Guarantor than their personal asset will also get automatically hit by moratorium, which will pause grave prejudice to the rights of the third party, however there is no provision in the code which envisage that the concept of legal heirs stepping into the shoes of the deceased personal Guarantor"

(v) Therefore, we hold that the instant application cannot be maintained against the legal heirs of the personal guarantor under the code, and the remedies may lie elsewhere, hence the clause 21 and clause 24(k) of the personal guarantee agreement is inconsistent with the definition of the personal Guarantor as defined in the code".

Counsel for the LRs Nos.5/1 to 5/3 stated that the legal heir of the late defendant No.5 i.e. Smt.Raj Rani Dewan(wife), Shri Puneet Dewan(son) and Smt.Ritu Dewan (daughter) are not liable for any dues of the applicant-financial institution as they have not inherited any of the property/assets of defendant No.5 i.e. Late Kasturi Lal Dewan The share of defendant No.5 are not in the possession of them nor it has been transferred in their names, they stated that the said defendants will not claim any right over the share and properties mortgaged with the bank in future and they hereby relinquish their right if any, in the aforesaid Shares of the company. The right of recovery of debt from the legal heirs of the defendant No.5 arises only to the extent of assets they have 29T.A.385 of 2002

inherited from the deceased, but they have not inherited any assets what so ever hence T.A. may be dismissed against the legal heir of defendant No.5

The defendant No.14 Bank of Baroda had also filed one written statement and stated that he is the leader of the consortiums finance, The applicant bank had second pari passu charge over the assets and the said bank had also filed recovery suit which is pending for consideration.

1. 17. In support of the case, Shri R.N. Malhotra Chief Manager of the applicant Bank affidavit and Sri Rajeev Garg affidavit is found on record.

2. 18. On a careful scrutiny of the evidence on affidavit and marking from Exhibit Nos.A-1 to A-345 to this transferred application, it is proved that defendants had availed the abovementioned open above credit facilities from the applicant bank by executing loan and security documents detailed as above in favour of the applicant-Bank. A perusal of the application, evidence and documents relied upon clearly shows that defendants had utilized the above Credit loan facility granted to them. The applicant-bank had maintained the Books of account in the ordinary course of banking business showing disbursal of the loan amount. It further shows that bank had regularly credited the amount paid by the defendants in the books of account. The Bank had also charged interest from time to time and the entries are relevant u/s 4 of the Bankers Books of Evidence Act. It is also proved that the applicant bank's claim is within limitation against the defendants.

3. 19. An amendment application to include legal heirs of defendant Nos.3&5 dated 19.11.2020 is already on record by the counsel of applicant bank as submit in the application that "deceased" defendant No.3 has left behind LRs. 3/1, 3/2, 3/3, 3/4, 3/5 & 3/6 and "deceased" defendant No.5 has left behind LRs.5/1,5/2 & 5/3 both LRs have inherited the movable and immovable properties are also liable to pay the dues of the applicant bank but fails to produce any document to substantiate "deceased" defendant No.5 LRs. 5/1 to 5/3 regard inherit.

4. 20. As objecting the same from several application filed is on record of LRs 5/1 to 5/3 and in their respective written statement and application request for deleting 30T.A.385 of 2002

the name of LRs.5/1 Smt. Raj Rani as expired on 29.08.2023 on the ground that they have not inherited any assets and properties from defendant No.5 to the extent of legal heirs, legal heir of defendant No.5 have relinquished their right in the share of the company had produced the documents, bank accounts and categorically stated that they have not inherited any kind of fixed and liquid assets from defendant No.5 Which provide liberty to the bank to recover the dues from the share of defendant No.5 as the LRs 5/1,5/2 & 5/3 have no objection, considering the undertaking and submission of relinquishment given by defendant Nos.5/1 to 5/3 the T.A. against the defendant Nos.5/1 to 5/3 is dismissed with the observation that they will not be able to raise any objection in future at the time of execution of the recovery certificate.

21. The lead bank of consortium will be able to act in accordance with consortium agreement and the applicant bank will be able to pursue its due claim pari passu charge on prorata basis in respect of consortium loan however applicant bank will be free to act in view of observation made above for realization of its dues subject to the prior lien/pari passu charge of defendant Nos.8 to 16 to the extent of their dues, further this judgment would not be used against defendant Nos.8 to 16 in any manner to their disadvantage.

22. Accordingly, the defendants are directed to pay the balance dues to the applicant bank within a period of 2 months from the date of judgment failing which the applicant bank will be entitled to sell the personal assets/properties of defendants.

23. The applicant-bank has claimed interest @17.5% per annum in CC(hypothecation of stock), CC(hypothecation of book debts), W.C.D.L.and Limit parked with Nainital bank, @16.00 per annum in term loan I of 250 Lac for tyre tube Unit, @18.5% per annum for term loan II of Rs.600.00 Lac for cotton yarn division, @20.00% per annum in packing credit limit, @17.5% per annum in overdue BP/BD, FBP advance bill(arisen due to devolved L.C.) and @17.5% per annum together including 2% penal interest in rest of the loan accounts for pendentelite and future period from 01.05.2001 till the date of its realization and costs. The contest between the applicant-bank and the defendants comes to an end and after filing of the T.A. as per the provisions of Section 19(2) of the Recovery of Debts and Bankruptcy 31T.A.385 of 2002

1993 (as amended from time to time) which is analogous to Section 34 to the CPC, the Tribunal/Court has direction in awarding pendente lite and future interest. I am also supported in my view by Hon'ble Supreme Court in a case titled **Central bank of India vs. Ravindra and others reported in AIR 2001 SC page 3095**. On the basis of the foregoing discussion, interest of justice will be served if pendente lite and future interest is granted @12.00% per annum in all the loan accounts with monthly rate on reducing balance from the date of filing of the T.A. till the date of realization with costs.

24. In the result, the Transferred Application succeeds on contest against the defendant Nos.1,2,3,4, 6 & 7 with costs and disposed of against defendant Nos.8 to 16 as they are proforma party(defendants) and bank has not sought any relief against them. The bank has proved the loan execution of loan documents in favour of the bank. The lead bank of consortium will be able to act in accordance with consortium agreement and the applicant bank will be able to pursue its due claim pari passu on prorata basis in respect to consortium loan the defendants are liable to pay the dues of the bank and hypothecated assets/mortgaged properties as well as personal property/properties of defendants are liable to be sold.

25. Pegasus Assets Reconstruction Put Ltd. had filed an application Dated 05/12/2018 as an intervenor wherein it has been stated that the bank of Baroda had sold out the plants and Machinery on 14/01/2011 and land of building on 02/02/2011 of the borrower company for Rs.306 Lac and Rs.1655 Lac Respectively, further the bank is keeping Sale proceeds of a Sale of Rs.1.68 Crore since 2014.

Be that as It May the entire accept of Money Received by the bank as per the consortium be distributed to its members.

26. It is, therefore, **ordered**:-

1. (i) That the **Transferred Application No.385 of 2002** of the applicant bank for issuance of Recovery Certificate to the tune of Rs.22,90,26,600.85(Rupees Twenty Two Crore, Ninety Lac, Twenty Six Thousand, Six Hundred and paisa Eighty Five Only) (Rs.3,27,40,111.74/- in Cash Credit (Hypothecation of Stock) A

32T.A.385 of 2002

Rs.1,56,11,654/- in Cash Credit(Hypothecation of Book Debt )A/c + Rs.10,89,60,040/- in Working Capital Demand loan A/c + Rs.46,88,938/- in Term loan I(Rs.250 Lac EOU Tyre Tube Unit) A/c + Rs.2,46,56,202/- in Term loan II(Rs.600 Lac EOU Textile Unit) A/c + Rs.12,33,455/- in BP/BD Limit A/c + Rs.1,86,56,813/-in Packing Credit Unit A/c + Rs.1,46,87,494/- in Foreign bills purchase 100% EOU cotton Yarn Unit A/c + Rs. 8,53,897/- in Advance Bill(devolved Letter of credits) Tyre tube Division + Rs.57,21,965/- in 100% EOU cotton Yard Division A/c + Rs.10,83,421.70/- in Current A/c No.2085 + Rs.1,32,608.51/- in Current A/c No.2353) together with pendentelite and future interest @12.00% per annum in all the loan accounts with monthly rest from the date of filing of the Transferred Application i.e.23.09.2002 till the loan is fully liquidated is hereby allowed succeeds on contest against the defendant Nos.1,2,3,4,6&7 with its costs, defendant Nos.8 to 16 as they are proforma(defendants) party and bank has not sought any relief against them.

- (ii) The lead bank of consortium will be able to act in accordance with consortium agreement and the applicant bank will be able to pursue its dues claim pari passu charge on prorata basis in respect of consortium loan.

- (iii) The defendants are directed to pay the dues within a period of two months from the date of judgment, failing which the applicant bank will be entitled to recover the same from the personal movables and immovable assets of the defendants.

- (iv) The applicant-Bank is entitled to recover aforesaid amount by the sale of Mortgaged properties/Hypothecations (If not sold earlier under the provisions of the S.A.R.F.A.E.S.I. Act, 2002) the, amount, if any recovered by sale of mortgaged properties/hypothecated assets or otherwise shall be adjusted towards the debt and only the balance amount shall be recoverable. If the dues of the applicant bank still 33T.A.385 of 2002

remain unsatisfied, the same be recovered by the attachment and sale of the personal movable and immovable assets of the defendants Nos.1,2,3,4,6&7 jointly and severally.

- (v) The defendant Nos.5/1 i.e. Smt Raj Rani Dewan (as expired on 29.08.2023 ), 5/2 Mr. Puneet Dewan and 5/3 Smt. Ritu Dewan, the legal heirs of the defendant No.5 is hereby exonerated from the liability of the applicant financial institution and T.A. is dismissed against them as they have not inherited and got any movable/immovable property/assets of defendant No.5 i.e. Kasturi Lal Dewan and the legal heirs will not raised any objection in future at the time of execution of the recovery certificate If the applicant F.I. sell any of the properties/assets of late defendant No.5.

- (vi) The defendant Nos.1,2,3,4,6&7 are hereby restrained by means of injunction from depleting, transferring, encumbering, alienating or in any way dealing with their properties/estates without first paying the claim of the applicant bank.

- (vii) Let Recovery Certificate be issued immediately u/s 19(22) of the Recovery of Debts and Bankruptcy Act, 1993 by fixing 23.11.2024, before R.O., DRT, Lucknow.

- (viii) The applicant bank is directed to file a memo of cost for preparing Recovery Certificate u/s 19(22) of the Recovery of Debts & Bankruptcy Act, 1993.

Judgment is pronounced in the open court.

Dated: 23.08.2024

(A.H. Khan) Presiding Officer

(sg)