IDBI BANK vs M/S ATLANTIC SPINNING AND WEAVING MILLS LTD on 9 May 2024

J U D G M E N T

1. The Applicant Nos.1 to 3 (Original Applicant Nos.1 to 4) have filed the present OA against the Defendant Nos.1 to 4 before the Ld. DRT-III, Mumbai on 10.08.2010 and registered as OA No.292/2010, which stands transferred to this Tribunal on 08.12.2016 as per Govt. Notification dated 26.09.2016 and registered as TOA No.1203/2016. The OA has been filed for recovery of the following amounts: a. The Applicant No.1 has claimed Rs.19,88,19,725/- (Rupees Nineteen Crore Eighty Eight Lakh Nineteen Thousand Seven Hundred Twenty Five only) from Defendant Nos.1 to 3 with interest @13.75% p.a. with monthly rests from the date of filing of the present OA till its realization. b. The Applicant No.2 (Assignee of Original Applicant No.2 i.e. The Ratnakar Bank Ltd.) has claimed Rs.3,82,51,058.38 (Rupees Three Crore Eighty Two Lakh Fifty One Thousand Fifty Eight and paise Thirty Eight only) from Defendant Nos.1 to 3 with interest @13.50% p.a. with monthly rests from the date of filing of the present OA till its realization. c. The Applicant No.2 (Assignee of Original Applicant No.3 i.e. Allahabad Bank) has claimed Rs.12,20,36,891.07 (Rupees Twelve Crore Twenty Lakh Thirty Six Thousand Eight Hundred Ninety One and Paise Seven only) from Defendant Nos.1 to 3 with interest @14.50% p.a. with monthly rests from the date of filing of the present OA till its realization. d. The Applicant No.3 (Assignee of Original Applicant No.4 i.e. State Bank of Patiala) has claimed Rs.31,56,40,429/- (Rupees Thirty One Crore Fifty Six Lakh Forty Thousand Four Hundred

Twenty Nine only) from Defendant Nos.1 to 4 with interest @13.85% p.a. with monthly rests from the date of filing of the present OA till its realization.

2. It is stated that the Applicant No.1 erstwhile The United Western Bank Limited, amalgamated with IDBI Bank Ltd. on 03.10.2006 as per Scheme of Amalgamation notified by Government of India vide their notification dated 30.09.2006, wherein all the assets and liabilities of erstwhile The United Western Bank Ltd. merged with IDBI Ltd. Subsequently, the name of the IDBI has been changed to IDBI Bank Ltd. (Applicant No.1 herein) w.e.f. 07.05.2008. The Original Applicant Nos.2 to 4 were also carrying on business of banking and during the pendency of the present OA, the loan was assigned by Original Applicant Nos.2 & 3 in favour of the Applicant No.2 and also Original Applicant No.4 assigned the loan in favour of the Applicant No.3.

3. Facts as succinctly set out in the OA are that the Defendant No.1 is a borrower and carrying of business of spinning of synthetic blended yarn. Defendant Nos.2 & 3 are the Guarantors and Defendant No.4 is a company who has guaranteed for the total limit. Defendant Nos.5 to 7 are the proforma Defendants.

4. It is stated by the Applicant No.2 that upon the request made by the Defendant No.1 for availing Fund Based and Non Fund Based facilities, the Applicant No.1 vide letter of sanction dated 06.10.2005 granted the Cash Credit Facilities of Rs.1500 lakhs and Bank Guarantee of Rs.30 lakhs aggregating to Rs.1530 lakhs.

5. It is further stated that on the request of the Defendant No.1, the Original Applicant No.2 vide sanction letter dated 08.12.2004, granted Cash Credit of Rs.64 lakhs, WCDL of Rs.256 lakhs, Letter of Credit of Rs.120 lakhs and Bank Guarantee of Rs.5 lakhs (aggregating to Rs.445 lakhs). It is also stated that the said limits were due for renewal on 30.06.2006 however, the Defendant No.1 did not submit the required papers for renewal of the limits. It is further stated that upon a request of Defendant No.1, the aforesaid credit facilities were reviewed and extended, subsequently from time to time and was lastly extended upto 31.03.2009 and the extension was granted on execution of joint consortium documents by Defendant No.1 on 22.11.2006 and equitable mortgage on 29.11.2006.

6. It is further stated that the upon a request made by the Defendant No.1 for availing Fund Based and Non-Fund based facilities, the Original Applicant No.3 vide Letter of Sanction dated 05.03.2003 granted the Cash Credit/WCDL of Rs.750 lakhs, Letter of Credit of Rs.240 lakhs and Bank Guarantee of Rs.7.50 lakhs (aggregating to Rs.997.50 lakhs) in the name of the Defendant No.1 and it was renewed from time to time upto 24.07.2008 vide sanction letter dated 24.07.2008 issued to the Defendant No.1 and the same has been duly acknowledged by the authorized signatory of Company.

7. It is further stated that the upon a request made by the Defendant No.1, the Original Applicant No.4 vide Letter of Sanction dated 21.09.2004, granted Cash Credit of Rs.1000 lakhs and Letter of Credit of Rs.510 lakhs (aggregating to Rs.1510 lakhs) to the Defendant No.1. However, at the time of disbursement of their share under the consortium limits, the Original Applicant No.4 reallocated their share and disbursed an amount of Rs.726 lakhs to the Defendant No.1.

8. Further, it is stated that by consent of the Applicants and Defendant No.5 to 7 alongwith State Bank of India and United Bank of India, the Applicant No.1 (erstwhile United Western Bank Ltd.) was designated and recognized as the Lead Bank of the “A Bank Consortium” in respect of the consolidated loan amount of the credit facilities sanctioned and disbursed in favour of the Defendant No.1. Accordingly, on 30.10.2004, the Consortium Banks have executed Interse Agreement among themselves. It was mutually agreed and decided between the Consortium Banks that, if the Consortium of Banks is increased or diminished from time to time by adding to or dropping of one or more banks or is changed by substitution of the one bank by another during the currency of this Agreement, then the Reconstituted Consortium will be governed by the provisions of the Agreement as if they have been added or dropped therein.

9. It is further stated that the Defendant No.1 has executed the following documents in favour of the Consortium Banks viz. Applicants and Defendant No.5 to 7 alongwith State Bank of India and United Bank of India:

(a) Working Capital Consortium Agreement dated 30.10.2004; (b) Joint Deed of Hypothecated dated 30.10.2004 in respect of Current Assets including Stocks of Raw Materials, stocks in process, semi-finished and finished goods relating to cotton yarn, synthetic yarn and other allied products, stores and spares situated at the premises and godown at factory division of the Defendant No.1 at Survey No.174, Xeldem (Quepem), State of Goa alongwith all the goods procured/acquired under the Letter of Credit/Foreign Letter of Credit.

10. It is further stated that the Defendant No.1 deposited the original documents towards security of the credit facilities such as Deed of Sale Dated 21.01.1988; Deed of Rectification dated 05.03.2002; Nil Certificate of Encumbrance of Property dated 15.10.1992 and Nil Certificate of Encumbrance of Property dated 11.03.1996.

11. It is further stated that the Defendant No.1 has originally created mortgage charge over the immovable properties being Plot of Land bearing Survey No.174 admeasuring 36,690 and Survey No.134 bearing Plot Nos.19 & 20 admeasuring about 2307 sq. mtrs. together with building and structures constructed/erected thereon or to be constructed/erected thereon and all the fixed assets including Plant and Machinery attached to the earth or permanently to anything attached to the earth situated at Village Xeldem, Taluka Quepem, in the District and State of Goa in favour of the Applicant No.1 Bank, Industrial Finance Corporation of India Ltd. and UTI Bank Ltd. by way of deposit of title deeds as security and by way of joint mortgage for the due repayment, discharge and redemption by the Defendant No.1 to (1) IFCI of its Rupee Term Loan of Rs.10 crores (ii) UWB of its working capital facilities to the extent of Rs.17.80 crores and (iii) UTI Bank to its working capital facility to the extent of Rs.7.15 crores together with interest, additional interest, further interest, liquidated damages, premia on prepayment of on redemption, costs, charges and expenses and other moneys payable under their respective loan agreements as amended from time to time and to continue to hold on behalf of Industrial Finance Corporation of India Ltd and UTI Bank Ltd with the Applicant No.1. The said deposit was recorded by way of a Memorandum of Entry dated 15.10.1999 and the same was confirmed by the Defendant No.1 vide their Declaration and Undertaking dated 15.10.1999.

12. It is stated that the Applicants alongwith Defendant No.5 to 7 are having pari passu charge on the Fixed and Current Assets as well as on the mortgage of immovable properties.

13. It is also stated that the constitution of Consortium Banks has been reconstituted from time to time and the Defendant No.1 availed of the aforesaid credit facilities from time to time.

14. The Defendant No.1 towards security for the aforesaid credit facilities granted by Applicants and Defendant No.5 to 7 under the Consortium by executing Second Supplemental Memorandum of Entry dated 30.10.2004, have confirmed and gave oral consent to continue to hold and retain the title deeds deposited with the Applicant No.1 Bank vide Memorandum of Entry dated 15.10.1999 and the same was confirmed by the Defendant No.1 vide their Confirmation Cum Declaration dated 30.10.2004. Further, the charge of the Applicants and Defendant No.5 to 7 alongwith Industrial Finance Corporation of India; State Bank of India and United Bank of India have been registered with the Registrar of Companies in respect of the immovable properties mentioned in Scheduled annexed with OA.

15. It is also stated that the Defendant No.2 and 3 being the guarantors executed Joint Deed of Guarantee on 30.10.2004 inter alia agreed to pay on demand and without demur to the Applicants alongwith State Bank of India and United Bank of India towards an amount of Rs.10280 lakhs alongwith interest, costs, charges, expenses and/or other money due thereon from time to time in terms of the aforesaid Working Capital Agreement, Joint Deed of Hypothecation and Supplemental Agreements.

16. It is further stated that as per the request made by the Defendant No.1, the Original Applicant No.4 by its letter of sanction dated 03.09.2005, enhanced the Cash Credit facilities to Rs.1500 lakhs and Letter of Credit to Rs.1500 lakhs (aggregating to Rs.3000 lakhs) to the Defendant No.1 and the same has been recorded by the Defendant No.1, in the minutes of meeting of the Board of Directors held on 16.09.2005. Further, the Defendant No.1 executed the following documents in favour of the Applicant No.4:

(i) Agreement of Loan for Overall Limit dated 01.12.2005;

(ii) Agreement for Hypothecation of Goods and assets dated 01.12.2005;

(iii) Letter regarding grant of individual limits within the overall limits;

(iv) Agreement of Pledge of Goods and Assets dated 01.12.2005;

(v) Deed of Guarantee dated 01.12.2005 executed by Defendant No.2 & 3.

17. The Applicants stated that two of the members of the Consortium viz. State Bank of India and United Bank of India departed from the Consortium Banks and Reconstituted Consortium Banks consists of Applicants and Defendant No.5 to 7.

18. It is further stated that the Defendant No.1 further confirmed and gave oral consent to continue to hold and retain the title deeds deposited with the Applicant No.1 Bank vide Third Supplemental Memorandum of Entry dated 29.09.2006.

19. It is also stated that the Defendant No.3 and Defendant No.4 have executed Corporate Guarantee in favour of the Original Applicant No.4 on 21.05.2008 wherein the Defendant No.4 has guaranteed for the total limit of loan for the amount of Rs.3000 lakhs availed by Defendant No.1. On 21.05.2008, the Defendant No.3 and Defendant No.4 being Guarantors created security interest in favour of the Original Applicant No.4 by creating equitable mortgage by deposit of title deeds in respect of the immoveable property being 1/30th undivided share of land in the total extent of 10 grounds and 1902 sq. ft. bearing Door No. ¾ (Old No.5) earlier known as Clifton in Anthu Street Alias Anthukuppa Street, Kuppam, Santhome, Mylapore, Chennai now known as Marine Waves, RR Flats, No.5, Anthu Street, Santhome, Chennai, comprised in O.S. No. Part of 1688 to 1690 and 1691 and R.S. No.2429 and 2428 Part, New No.2429/2 of Mylapore Village Mylapore, Triplicane Taluk, Chennai District with a residential Flats bearing Nos.28, 29 and 30, New No.26 on the 5th floor having a plinth area of 2500 sq. ft. and balconies of 1500 sq. ft. standing in the Defendant No.4 and the Defendant No.4 executed Confirmation of Deposit of Title Deeds on 21.05.2008 in favour of the Original Applicant No.4.

20. It is further stated the Defendant No.1 availed of the aforesaid credit facilities from time to time however, their credit accounts have been irregular since long. The Applicants have repeatedly called upon the Defendant No.1 to regularize the said credit facilities/accounts. However, the Defendant No.1 has failed to do so. The account of the Defendant No.1 was declared NPA by the Applicant No.1 w.e.f. 01.07.2009 and by the Original Applicant No.2 to 4 w.e.f. 30.06.2009 respectively. Thereafter, the Applicant No.1 by recall notice dated 05.08.2009 to Defendant No.1 and recall notice dated 20.08.2009 to

Defendant No.2 & 3 called upon them to pay the outstanding dues but they failed to pay the dues. The Applicant No.1 further issued notice under Section 13(2) of the SARFAESI Act, 2002 dated 04.09.2009 to the Defendant No.1. The Defendant No.1 through their Advocate replied vide letter dated 03.11.2009 falsely contending that an understanding was arrived at for repayment which was not acted upon by the Applicants. The Applicant No.1 in turn made rejoinder dated 16.11.2009 to the said reply by stating the contentions arbitrary and unreasonable and intimating for recourse of further action at their costs and consequences.

21. It is further stated that the Original Applicant No.2 issued recall notice dated 16.07.2009 to the Defendant No.1 to 3 to make the payment of the outstanding dues but they failed to pay the dues. Thus, the Original Applicant No.2 issued notice under Section 13(2) of the SARFAESI Act, 2002 dated 02.09.2009 which was replied by the Defendant No.1 vide letter dated 03.11.2009 but failed to pay the dues of the Original Applicant No.2. The Original Applicant No.3 also issued recall notice dated 02.07.2009 as well as 13(2) notice dated 18.08.2009 to the Defendants and called upon them to pay the outstanding dues but to no avail.

22. It is also stated that the Original Applicant No.4 issued notice under Section 13(2) of the SARFAESI Act, 2002 dated 31.08.2004 and called upon the Defendant No.1 to 4 to pay the dues of the Original Applicant No.4 but they failed to pay the dues. The Defendant No.1 through their Advocate replied vide letter dated 03.11.2009 falsely contending that an understanding was arrived at for repayment which was not acted upon by the Applicants. The Applicant No.1 in turn made rejoinder dated 28.11.2009 to the said reply by stating the contentions arbitrary and unreasonable and intimating for recourse of further action at their costs and consequences.

23. Thereafter, on 09.04.2010, the Applicant No.1 being the lead bank of consortium, taken the possession of the movable and immoveable assets of the Defendant No.1 by exercising the powers under Section 13(4) of the SARFAESI Act, 2002 and the same has been recorded in the panchnama dated 09.04.2010. Subsequently, the Applicants by their Advocate’s Letter dated 25.03.2010 called upon the Defendant No.1 to 3 to make the payment of the outstanding dues. The Defendant No.1 through their Advocate replied vide letter dated 16.04.2010 which was duly received by the Applicants on 20.04.2010 and alleged that the financial assistance provided by the Applicants to the Defendant No.1 were not in totality and not provided within the time-frame. He also alleged that no such amount as is alleged in the notice is payable and the mortgage deed is void and thus, there is no enforcement against secured assets. The Defendants further alleged that the Applicants notice dated 25.03.2010 is bad, untenable defective without any clear clarification/justification as to his words. The Applicants in turn issued a rejoinder dated 19.05.2010 denying all allegations averments and statements made by the Defendants and declare that they are a consortium of reputed banks with very high market value and esteemed reputation. The false allegations of malpractices made by the Defendant No.1 are absolutely baseless and hold no ground. The Applicants have left with no other option but to approach this Tribunal hence, the present OA.

24. It is also informed that the Defendant No.5 to 7 filed their respective Original Applications against the Borrowers and Guarantors before this Tribunal i.e. OA No.79/2009 filed by Defendant No.5; OA

No.179/2009 filed by Defendant No.6 and OA No.8/2010 filed by Defendant No.7.

25. Notices were issued to the Defendants. Defendant No.1 to 3 and 6 & 7 put their appearance through counsel. Defendant No.1 to 3 filed their written statements however, no CAOD has been filed and since 08.12.2016 no one appeared on their behalf. Despite opportunities, no WS has been filed by Defendant No.6 and after 22.02.2011, no one appeared for Defendant No.6. Defendant No.7 put its appearance through counsel and filed its written statement. Despite service of summons, none appeared for the Defendant No.4, 5 thus, they were proceeded ex-parte vide order date 22.02.2011.

26. In the written statement, the Defendant No.1 to 3 denied each and every averments made in the OA and raised the following objections that:

(i) The OA does not disclose any cause of action arose against these Defendants. It is also stated that alleged facilities granted to the Borrower Company (in Liqn.) for different amounts on different rates of interest and on different dates therefore, separate OA for the respective loan amounts are liable to be instituted and which cannot be clubbed together in law.;

(ii) The OA is not signed, and verified by a duly authorized person;

(iii) The OA is barred by limitation;

27. In the written statement, the Defendant No.7 (erstwhile Andhra Bank) stated that the claim of Defendant No.7 may kindly be taken note of and order for recovery of its dues of Rs.10,31,02,806.05 as on 25.11.2009 together with interest at contractual rate i.e. 15.5% p.a. with 2% penal interest at monthly rests from 26.11.2009 till payment and/or recovery and for distribution of sale proceeds of the assets on pro-rata basis which may be decreed for sale, in case the present OA

succeeds by passing a final order and judgment in favour of the answering Defendant and Recovery Certificate for recovery of the dues is issued by this Tribunal.

28. During the pendency of the OA, the Borrower Company is gone into the Liquidation vide order dated 09.01.20202 in IA No.284/2019 in Company Petition (IB) bearing No.497/7/HBD/2018 wherein Ld. NCLT, ordered that the Company be would up and appointed Ms. Sujarata Chattopadhyay, as Liquidator of the Said Company. Despite opportunities, no status report has been filed by the Defendant No.1.

29. It is further reveals from the record that during the pendency of the OA, the Defendant No.3 who was sued in the capacity a Guarantors had expired and therefore, the Applicants moved an Application for impleadment of the legal heir in place of the deceased Defendant No.3. This Tribunal vide order dated 26.09.2016 allowed the Application filed by the Applicants and accordingly, the OA has been amended by impleading the name of the Legal Heirs i.e. Defendant No.3 (a) Mr. Viren K. Jain (Original Defendant No.2) in place of the Deceased Defendant No.3.

30. Record reveals that during the pendency of the OA, the Original Applicant Nos.2 and 3 i.e. The Ratnakar Bank Ltd. & Allahabad Bank had assigned all the rights, title and interest in respect of the account of the Defendant No.1 Company (in Liqn.) to International Asset Reconstruction Company Pvt. Ltd. vide Deed of Assignment dated 26.03.2014 of The Ratnakar Bank Ltd. and 11.02.2014 of the Allahabad Bank. Thereafter, this Tribunal vide order dated 09.01.2015 allowed the Application filed by the Applicants and impleaded the Applicant No.2 i.e. International Asset Reconstruction Company Pvt. Ltd. in place of the Original Applicant Nos.2 and 3.

31. Record reveals that during the pendency of the OA, the Original Applicant No.4 i.e. State Bank of Patiala assigned all the rights, title and interest in respect of the account of the Defendant No.1 Company (In Liqn.) to Invent Asset Securitization and Reconstruction Company Pvt. Ltd. vide Deed of Assignment dated 23.07.2015. Thereafter, this Tribunal vide order dated 25.01.2016 allowed the Application filed by the Applicants and impleaded the Applicant No.3 i.e. Invent Asset Securitization and Reconstruction Company Pvt. Ltd. in place of the Original Applicant No.4.

32. It is also reveals from the record that the erstwhile Andhra Bank (Defendant No.7) amalgamated into Union Bank of India w.e.f. 01.04.2020 in terms of Gazetee of India dated 04.03.2020 issued by Ministry of Finance, Govt. of India.

33. The Applicants have filed their Joint Claim Affidavit through G. Anantharaman, the Deputy General Manager of the Applicant No.1, Dhananjay Shamarao Jadhav, Chief Manager of the Original Applicant No.2; Anil Kumar Rana, Chief Manager of the Original Applicant No.3 and Satinder Chhabra, Chief Manager of the Original Applicant No.4 who have proved all the loaning and security documents such as Exb.A to Exb.HHH-1 to the Completion of Original Documents.

34. I have heard the Ld. Counsel for the Applicants and Defendant No.7 and perused the record. Now hereinafter, I would like to decide the issue raised by the Defendant No.1 to 3 in their joint written statement.

35. Since, after filing the written statement, the Defendant No.1 gone into liquidation and Defendant No.3 was expired and his legal heir i.e.

Defendant No.2 is impleaded as Defendant No.3(a), therefore, the Written Statement of Defendant No.1 to 3 shall be considered as Written Statement of Defendant No.2.

(i) The first objection raised by the Defendant No.2 is that the OA does not disclose any cause of action arose against these Defendants. It is also stated that alleged facilities granted to the Defendant No.1 (in Liqn.) for different amounts on different rates of interest and on different dates therefore, separate OA for the respective loan amounts are liable to be instituted and which cannot be clubbed together in law.

Record reveals that the IDBI Bank Ltd. (Applicant No.1) (erstwhile United Western Bank Ltd.) was designated and recognized as the Lead Bank of the “A Bank Consortium” by consent of the Applicant No.2 to 4 and Defendant No.5 to 7 alongwith State Bank of India and United Bank of India in respect of the consolidated loan amount of the credit facilities sanctioned and disbursed in favour of the Defendant No.1 (in Liqn.). Accordingly, the Consortium Banks have executed Interse Agreement dated 30.10.2004 (Exb.F of Completion of Original Documents). The Defendant No.1 (in Liqn.) also executed the documents, hypothecated the assets, as well as created mortgage, in favour of the Consortium Banks viz. Applicants and Defendant No.5 to 7 alongwith State Bank of India and United Bank of India.

It is also matter of record that State Bank of India and United Bank of India departed from the Consortium, and the Defendant No.5 to 7 filed their respective Original Applications before this Tribunal therefore, the present OA has been filed by remaining consortium lenders i.e. Applicants No.1 to 3 (Original Applicant No.1 to 4) lead by the Applicant No.1. Further, the Applicants produced all the loaning and security documents such as (Exb.A to Exb.HHH-1 to the Completion of Original Documents) alongwith their Claim Affidavit which proves that Borrower Company (in Liqn.) availed the credit facilities time to time from the Applicants and executed loaning and security documents in favour of the Consortium lenders. The Defendant No.2 & 3 also executed their Joint Guarantee Agreements dated 30.12.2004 & 01.12.2005 (Exb.W and Exb.DD of Completion of Original Documents) to secure the credit facilities in favour of the Applicants. However, after availing of the credit facilities, they committed defaults in repayment of the dues. Thereafter, the Applicants repeatedly requested them to regularize the accounts but to no avail.

Looking to the above facts of the case, the cause of action exists against these Defendants. Thus, the objection raised by the Defendant No.2 is not sustainable hence, declined.

(ii) The next objection raised by the Defendant No.2 is that the OA is not signed, and verified by a duly authorized person.

Record reveals that the OA has been signed, verified and instituted by G. Anantharaman, Deputy General Manager of the Applicant No.1, Dhananjay Shamarao Jadhav, Senior Manager of the Original Applicant No.2, Anil Kumar Rana, Chief Manager of the Original Applicant No.3 and Manmohan Gupta, Branch Chief Manager of the Original Applicant No.4, and they are authorized to sign, verify and institute the present OA. The Applicants produced the Power of Attorney at Serial No.40 of Exb.4 of OA. Even otherwise, the OA cannot be dismissed on this technical ground as held by Hon’ble Supreme Court in UBI Vs Naresh Kumar & Ors., AIR 1997

SC 3. Therefore, the objection raised by the Defendant No.2 is declined.

(iii) The next objection raised by the Defendant No.2 is that the OA is barred by limitation.

In the present case, the Borrower Company (in Liqn.) to secure the loan, created equitable mortgage of its immovable properties by deposit of title deeds in respect of the mortgaged properties and same was recorded in the Memorandum of Entry dated 15.10.1999. The Borrower Company (in Liqn.) by executing Second Supplemental Memorandum of Entry dated 30.10.2004, have confirmed and gave oral consent to continue to hold and retain the title deeds deposited with the Applicant No.1. Further, the Borrower Company (in Liqn.) confirmed and gave oral consent to continue to hold and retain the title deeds deposited with the Applicant No.1 vide Third Supplemental Memorandum of Entry dated 29.09.2006.

Since, the mortgage is created by way of deposit of title deeds therefore, as per Article 62 of the Schedule to the Limitation Act, 1963, the limitation period is twelve years, from the date when the money sued for becomes due. Therefore, the objection of the Defendant No.2 has no force hence, declined.

36. The witness of the Applicant has fully corroborated the averments made in the OA, even otherwise the whole case of the Applicant Bank is based on documents and the witness has duly proved all these documents as against the Defendant No.1 to 4. In my view there is no question of disbelieving the evidence led by the Applicant Bank and the Applicant Bank has proved its case beyond reasonable doubt against Defendant No.1 to 4.

37. Since the Defendant No.4 given the Guarantee only in respect of the facilities availed by the Borrower Company (in Liqn.) from the Original Applicant No.4, therefore, the liability of Defendant No.4 is limited to the dues payable by them to the Applicant No.3 (being assignee of Original Applicant No.4).

38. The liability of Defendant No.3(a) is upto the extent of estate inherited by him from the Deceased Defendant No.3.

39. In the light of above discussions, the Original Application filed by the Applicant Bank deserves to be allowed against the Defendant Nos.1 to 4.

40. Admittedly, the Defendant No.5 to 7 having pari passu charge in respect of the secured assets of the Defendant No.1 Company (in Liqn.).

O R D E R

(i) I allow the present O.A. and direct the Defendant Nos.1 to 4, to pay to the Applicant Nos.1 to 3, within a period of 60 days, the below mentioned sums in the following manner: a. Rs.19,88,19,725/- (Rupees Nineteen Crore Eighty Eight Lakh Nineteen Thousand Seven Hundred Twenty Five only) with interest @13.75% p.a. with monthly rests from the date of filing of the present OA till its realization, by Defendant No.1 to 3(a) to the Applicant No.1.

b. Rs.3,82,51,058.38 (Rupees Three Crore Eighty Two Lakh Fifty One Thousand Fifty Eight and paise Thirty Eight only) with interest @13.50% p.a. with monthly rests from the date of filing of the present OA till its realization, by Defendant Nos.1 to 3(a) to the Applicant No.2 (Assignee of Original Applicant No.2 i.e. The Ratnakar Bank Ltd.). c. Rs.12,20,36,891.07 (Rupees Twelve Crore Twenty Lakh Thirty Six Thousand Eight Hundred Ninety One and Paise Seven only) with interest @14.50% p.a. with monthly rests from the date of filing of the present OA till its realization, by Defendant Nos.1 to 3(a) to the Applicant No.2 (Assignee of Original Applicant No.3 i.e. Allahabad Bank). d. Rs.31,56,40,429/- (Rupees Thirty One Crore Fifty Six Lakh Forty Thousand Four Hundred Twenty Nine only) with interest @13.85% p.a. with monthly rests from the date of filing of the present OA till its realization, by Defendant No.1 to 4 to the Applicant No.3 (Assignee of Original Applicant No.4 i.e. State Bank of Patiala).

Aggregating to sum of Rs.67,47,48,103.45 (Rupees Sixty Seven Crore Forty Seven Lakh Forty Eight Thousand One Hundred Three and paise Forty Five only) alongwith interest as mentioned above.

(ii) Failing which the aforesaid amount of Applicants shall be recovered from the sale of personal moveable and immoveable assets of the Defendant No.2 to 3 (a). Since the liability of the Defendant No.4 is limited to the dues payable by them to the Applicant No.3 herein, therefore, the amount of the Applicant

No.3 shall also be recovered from the sale of mortgaged properties (as described in para 19 of this judgment) as well as other personal moveable assets of the Defendant No.4.

(iii) The liability of Defendant No.3(a) is upto the extent of estate inherited by him from the Deceased Defendant No.3.

(iv) The Defendant Nos.2 to 4 are hereby directed not to deal with their properties till further direction of Ld. Recovery Officer of this Tribunal.

(v) The Defendant No.1 (Ms. Sujata Chattopadhyay Liquidator of M/s Atlantic Spinning and Weaving Mills Ltd.) is hereby directed to file her status report before the Ld. Recovery Officer of this Tribunal.

(vi) The Defendant Nos.1 to 4 shall also pay the cost and expenses of the OA.

(vii) Recovery Certificate be issued forthwith and be sent to the Recovery Officer of this Tribunal. Copy of this order be sent to the parties as per rules. File be consigned to record.

Place: Mumbai.

(Dr. Rekha G. Dhakar) Dated: 19.03.2024

Presiding Officer, DRT-1, Mumbai. sc/-