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Allahabad High Court · body

2008 DIGILAW 1563 (ALL)

Prashant Glass Works Pvt Ltd v. Bank of Baroda

2008-08-07

CHAIRPERSON, J.M.MALIK

body2008
J. M. MALIK, CHAIRPERSON, J. This appeal is directed against the order of D. R. T. dated 15th September, 2005. The learned D. R. T. issued the recovery certificate in favour of the respondent bank for a sum of Rs. 79,82,568. 86 to gether with pendent elite and future interest @ 13. 84% per annum with quarterly rests with costs against the defendant Nos. 1 to 3, who are arrayed as ap pellants in this case, on the application moved by the bank under section 19 of R. D. D. B. F. I. Act, 1993. 2. In the appeal, appellants have made the following key averment. The action taken by the bank for recovery of their dues was at a premature stage. The recovery application was filed without declaring the account non Performing Asset (in short N. P. A. ). The R. B. I, has made certain norms for declaring an account as N. P. A. and the said norms are the directives, which are required to be followed strictly by the banks and other financial institutions be fore initiating the proceedings for recovery of their dues. Further more, an ac count can be declared as N. P. A. if the period of six months has elapsed from the last entry made in the book of accounts. In the instant case, the said directive was given the go by. In the instant case, the last entry was made on 25th November, 2002 and the original application for recovery was filed on 29th November, 2002 just after four days. The case of the bank as it appears in the application for recovery of debt filed before the D. R. T. is that "however in spite of repeated personal demand and aforesaid legal notice, the defendant Nos. 1, 2 and 3 have failed to pay the same, hence this application before the Honble Tribunal". The appellants replied that the dates of reminders were not given. Again, how many reminders can be sent between 25th November, 2005 to 29th November, 2005. It was contended that no reminder was ever sent. Secondly, there is no finding by the Court on the contention raised by the appellants that their signatures were forged. The argument urged by the learned Counsel for the appellants has two short prongs. Again, how many reminders can be sent between 25th November, 2005 to 29th November, 2005. It was contended that no reminder was ever sent. Secondly, there is no finding by the Court on the contention raised by the appellants that their signatures were forged. The argument urged by the learned Counsel for the appellants has two short prongs. Firstly he submitted that the recovery suit filed by the bank is not maintainable because it failed to declare the accounts of appellants as Non Performing Assets. 3. For the following reasons, this argument has to be eschewed out of con sideration. Counsel for the appellant could not bring to the notice of the Court any law, any provision, or any order, norms or directives passed/issued by the R. B. I. It appears that the Counsel for the appellants was confusing the provi sion of the "the S. R. F. A. E. S. I. Act, 2002" with the provisions of section 19 of the R. D. D. B. F. I. Act, 1993. 4. Secondly, in the application under section 19 of the R. D. D. B. F. I. Act, 1993 the bank made the following averments. A legal notice dated 1st November, 2002 was given to the appellants, wherein they were asked to re pay the outstanding amount in all the said accounts. However, in spite of re peated personal demand and the aforesaid legal notice, the appellants had failed to pay the same, therefore, the above said application was filed. It was further pleaded that the appellants were very irregular in repayment of the aforesaid due amount and account of the defendant No. 1 became very sticky in operation. Again, in accordance with income recognition assets classification and provisioning norms of R. B. I. , the applicant bank classified all the account as Non-Performing Assets (N. P. A.) and stopped charging of interest from 25th November, 2002. 5. The appellants proved legal notice exhibit No. A-45 before the learned Tribunal. Its paras 8,10 and 12 are reproduced as follows :- "8. 5. The appellants proved legal notice exhibit No. A-45 before the learned Tribunal. Its paras 8,10 and 12 are reproduced as follows :- "8. However, after availing, utilizing and enjoying the abovementioned credit facilities, you, the above named addressee No. 1, in total disregard of the terms and conditions of the sanction failed to adhere to the financial discipline of my client and failed to regularize the said credit fa cilities account in spite of repeated requests, reminders and personal fol low-ups of my client. 10. However you the abovementioned addressees, despite admitting your liability with respect to the above-mentioned credit facilities and undertaking to liquidate the outstanding dues in the said credit facilities account, have failed and neglected to clear the entire outstanding dues of my client. Since, you, the above named addressee Nos. 2 and 3 are the guar antor for the payment of the dues of my client in the above mentioned credit facilities account, the liability of you, the abovementioned addressees is joint and several. 12. Now I, therefore, call upon you, all the above named addressees, to pay to my above named client a sum of Rs. 1,16,13,809/- (Rupees one crore sixteen lacs thirteen thousand eight hundred and nine only) with respect to the cash credit account and a sum of Rs. 1,71. 89,290. 00 (One crore seventy-one lacs eighty-nine thousand two hundred and ninety only) with respect to the over draft account due to my client from you, the above named addressees along with interest at the rate of 13. 84% per annum with monthly rests from 1st November, 2002, with respect to the cash credit ac count and interest at the rate of 12. 86% per annum with monthly rests from 1st November, 2002, with respect to the overdraft account and other charges accruing thereon till the date of payment of entire sum with a sum of Rs. 2,500. 00 being the notice charges for this notice within seven days of the receipt of this notice, failing which my client without any further reference to you, shall be constrained to pursue any available legal remedy in the nature of criminal and/or civil proceedings and the same shall be at your costs, risk and expenses. " 6. The respondent also proved statement of accounts exhibit A-46 in sup port of its case. The Counsel for the appellants could not find out any flaw therein. " 6. The respondent also proved statement of accounts exhibit A-46 in sup port of its case. The Counsel for the appellants could not find out any flaw therein. 7. To the above averments, in their written statement filed by the appel lants before the learned D. R. T. dated 8th September, 2003, it is interesting to note that the appellants did not deny the receipt of notice dated 1st November, 2002. The appellants, however, denied that the accounts have become N. P. A. as on 25th November, 2002, and averred that calculation of N. P. A. is incorrect and not as per the guidelines of the R. B. I. 8. Since the appellants have failed to prove that it was not imperative or incumbent upon the bank to declare the account of N. P. A. despite the service of legal notice dated 1st November, 2002, which evoked no response from the appellants, therefore, the argument urged by the Counsel for the appellant pales into insignificance. 9. Lastly, learned Counsel for the appellants half heartedly argued that signatures of the appellants on the relevant documents had been forged was not considered by the D. R. T. 10. He, however, conceded that the appellants did not lead any evidence in order to embolden or prove the above said pleading. It must be borne in mind that these are the appellants and nobody else, who are to carry the ball in proving their case. The bald allegation, without evidence worth the name, has to be ignored. 11. Moreover, the learned Counsel for the bank explained that the appel lants have raised a contradictory pleading in the written statement. In para 21 of the written statement filed before the D. R. T. , wherein it was clearly, specif ically and unequivocally stated. "21. The signature of the defendants were obtained on the blank docu ments on exhibit A-44 and the relevant information was mentioned later on at the time of filing of recovery before this Honble Tribunal. The amount shown due to bank as on 15th June, 2002 was not actually due as per the statement of accounts annexed with the original application. Any amount which is not due as on the said date as per the book of accounts, cannot be relevant for the purpose of confirming the actual balance due to bank. " 12. The amount shown due to bank as on 15th June, 2002 was not actually due as per the statement of accounts annexed with the original application. Any amount which is not due as on the said date as per the book of accounts, cannot be relevant for the purpose of confirming the actual balance due to bank. " 12. Thus, it is clear that the above said both the stands are poles apart and heterogeneous. The appellants have no hesitation to swing and oscillate from one extreme to another. The Court is unable to clap any significance with such like after thought, incongruous and belated stand. It is also clear that the appellants signed the papers in question with one eyes. No evidence to the con trary saw the light of the day. This is rudimentary principle of jurisprudence that the documents will always get preponderance over the oral evidence be cause it is well known axiom of law that men may tell lies but the documents cannot. 13. During arguments, the Counsel for the appellants submitted that some of the amount is still due to the appellants. During the pendency of this case application was moved by the appellants with the prayer that the respondent bank be directed to release the entire mortgaged, pledged properties of the ap pellants after taking the bank guarantee in order to enable the appellants to take financial assistance from any of the financial institutions for smooth run ning of their business in future. In para 14 of the said application dated 16th November, 2007, it was mentioned that during negotiations for compromise the respondents were asking the appellants to deposit Rs. 52. 00 lacs to liquidate all the dues, but the appellants were offering Rs. 43. 00 lacs. Thus the admission of debt which is still due to the appellants comes out from horses mouth itself. 14. The whole gamut of above said facts and circumstances leans on the side of the respondent. The appeal being without force is hereby dismissed. The copies of order be supplied to the parties as per law. The copy be also dis patched to the D. R. T. concerned. The appeal stands disposed off. File be con signed to the records. Appeal Disposed Of. .