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2006 DIGILAW 398 (ORI)

Nirmal Kumar Jha v. Bank of India

2006-05-17

A.K.PARICHHA, B.P.DAS

body2006
JUDGMENT B. P. DAS, J. : The Petitioners have filed this writ peti¬tion under Articles 226 & 227 of the Constitution of India chal¬lenging the order dated 19.4.2005 passed by the Presiding Offi¬cer, Debts Recovery Tribunal, Cuttack in Original Application No.26/2002 allowing the said application filed by the O.P. No.1-Bank of India and directing recovery of loan amount of Rs.92,63,594/- with interest @ 12% per annum from the date of filing of the said Original Application till the date of realisa¬tion with costs from the defendants. The petitioners, who stood as guarantors for the loan availed by O.P. No.1 and arrayed as defendant Nos.4 to 6 in the Original Application, have filed this writ petition with a prayer to quash the impugned order dated 19.4.2005 with regard to the determination of their liability. It is urged on behalf of the petitioners that M/s. Sri Krishna Pipes (P) Ltd. - O.P.2, which manufactures asbestos, cement, pressure pipes, was incorporated as a limited Company and was duly registered under the Companies Act. O.Ps.3 & 4 were the promoters of the aforesaid Company and the petitioners had joined the Company as Directors on being induced by O.Ps. 3 & 4 but they were ultimately victimized by O.Ps. 3 & 4. The petitioners were induced to become the guarantors and did execute guarantee bonds with limits of Rs.25.00 lakhs and simultaneously of Rs.20.00 lakhs towards cash credit and book debts. It is further alleged that O.Ps. 3 & 4 were in active management of the Company and they siphoned the Company’s funds in connivance with the Bank. The petitioners at all relevant time intimated the Bank about the clandestine sale of the pipes by O.Ps. 3 & 4 compelling the Bank to take immediate action against the such illegal sales of the hypothecated goods. The finished goods, at all relevant time, were in the custody of the Bank with their lock and key and without making corresponding payment to the Bank, O.Ps. 3 & 4 in connivance with the Bank Officers, got the goods out of the Bank’s custody and sold the same without making payment to the Bank. It was further alleged that there was variance in the con¬tract and the Bank without taking the petitioners/guarantors into confidence; O.Ps. 3 & 4 in connivance with the Bank Officers, got the goods out of the Bank’s custody and sold the same without making payment to the Bank. It was further alleged that there was variance in the con¬tract and the Bank without taking the petitioners/guarantors into confidence; O.Ps. 3 & 4 diverted the finance of the Company to another project, for which the petitioners resigned from the directorship and simultaneously revoked the guarantee on 7.9.1999. It is further alleged that immediately after the petitioners withdrew from the guarantorship, the stock of the hypothecated goods were verified by the Bank and the inventory revealed the stock worth Rs.74.57 lakhs in the godown under lock and key of the company. But the Bank wilfully and deliberately neglected either to seize or sell the said stock and after seizure of the unit under Section 29 of the State Financial Corporations Act, the hypothecated finished goods worth Rs.30.00 lakhs were removed from the Bank’s godown and sold in the market. The sum and substance of the allegation of the petitioners is that the impugned order in Annexure-7, which is the final order passed by the Debts Recovery Tribunal is not sustainable in the eye of law as the Tribunal while passing the order has not taken into consideration the aforesaid infirmities though the same were brought to its notice. These being the disputed questions of fact and the order under challenge being appealable under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, we are not inclined to entertain this writ petition and deal with the disputed questions of fact in a proceeding under Articles 226 & 227 of the Constitution of India. It is, however, open to the petitioners to raise all these questions before the appellate authority, if so advised. The writ petition is accordingly disposed of. A. K. PARICHHA, J. I agree. Petition disposed of.