MR PAFUL D MAYEKAR vs STANDARD CHARTERED BANK & ORS on 29 December 2022

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson Appeal No. 10/2011 Between Praful D Mayekar

… Appellant/s V/s. Standard Chartered Bank Ltd. &Anr. …Respondent/s

Mr Yogesh Deshpande, Advocate for Appellant. -: Order dated: 29/12/2022:- This is an appeal preferred by the 1st defendant in the Original Application No. 76 of 2007 (O.A) on the files of Debts Recovery Tribunal-II, Mumbai impugning the Judgment dated 12/04/2010 allowing the aforesaid O.A.

2. The above-mentioned O.A. was filed by the 1st Respondent Standard Chartered Bank for recovery of ₹1,931,090.20 together with interest at the rate of 19.05% per annum. The bank’s averment in the O.A. is that on or about 30/03/2005 the 1st defendant was granted a Business Instalment Loan of ₹18.70 lakhs with the 2nd defendant company named Esstech Software Services Private Ltd of which, the 1st defendant was a director as a corporate guarantor. The 1st defendant had executed a demand promissory note and had also executed an agreement representing the 2nd defendant company. It was agreed that repayment would be made in 33 equated monthly instalments of ₹72,306/- each. The defendants repaid only 7 instalments and thereafter defaulted.

Notice issued on behalf of the bank did not yield any result and hence, the O.A. was filed for recovery.

3. The Appellant filed a written statement and contested the O.A. On 24/08/2009, the Appellant filed an application for cross- examining the bank official who had filed the affidavit on behalf of the bank in support of the averments made in the O.A. The Ld. P.O. rejected the application vide order dated 05/11/2009. A Misc. Appeal was filed as No. 276 of 2009 before this Tribunal together with the stay application No. 1003 of 2009. On 10/03/2010 this Tribunal dismissed that appeal and application. Writ petition No. 621 of 2010 was preferred before the Hon’ble High Court of Bombay challenging the dismissal of the appeal. The said Writ was dismissed on 06/04/2010. Thereafter, the O.A. was finally heard and disposed of directing the defendants to pay to the Applicant bank a sum of ₹17,68,755.14 together with interest at the rate of 12% per annum with effect from the date of filing of the original application till realisation. A recovery certificate was issued accordingly.

4. Aggrieved by this order of the DRT, the Appellant is in appeal. The Respondents did not appear and were therefore set ex parte. Mr Yogesh Deshpande, the learned counsel appearing for the Appellant was heard. Records perused.

5. The main argument advanced by the Ld. counsel for the Appellant is that the Appellant is neither a borrower nor a guarantor. It is however admitted that he had signed the loan documents for and on behalf of the 2nd Respondent company of which, he is admittedly the director. The Ld. counsel points out

that in the application form for the loan, the Appellant is mentioned as the guarantor. The document is signed by the Appellant with the seal of the 2nd Respondent company affixed thereon. According to the Ld. counsel, the documents are contrary to the pleadings. The specific contention of the Appellant in his written statement filed before the DRT was that he has not taken any loan in his individual capacity and that the loan amount was disbursed entirely to the account maintained by the company. He has also produced the statement of account which indicates that the amount was received by the company. It is further stated that in case the company is liable, the other directors should also be made liable. It is also contended that the Appellant has left the company and therefore cannot be made liable for the debt incurred by the company. Hence, it is argued that the appeal may be allowed and the O.A. dismissed after setting aside the impugned Judgment.

6. It is pertinent to note that it was the Appellant who had executed the Business Instalment Loan Agreement produced as Ext. 18. That apart, he had also executed a Demand Promissory Note in his personal capacity. It may be true that the amount that was received from the bank was disbursed to the account of the 2nd Respondent company. The corporate guarantee was also executed on behalf of the company by none other than the Appellant himself. The Appellant cannot, therefore, wriggle out by saying that he had not taken any loan in his individual capacity. None of the other directors had represented the company and executed any document in favour of the bank for and on behalf of

the company. The loan agreement, as also the Demand Promissory Note was signed by the Appellant alone. This act of the Appellant would undoubtedly make him responsible for the debt incurred by him in his individual capacity as also representative of the 2nd Respondent company. I find no valid reason to interfere with the findings of the Ld. Presiding Officer in allowing the Original Application. The appeal has no merits and therefore deserves to be dismissed. I do so, though without costs as the 1st Respondent bank has not contested the appeal. Sd/- Chairperson mks-1