RAJESHWARI METALLURGICALS PRIVATE LIMITED Vs. INDIAN BANK

JUDGEMENT

(1.) In these writ petitions, the petitioners are challenging the order dated 12-9-2013 (Annexure-W) passed by the Debts Recovery Appellate Tribunal, Chennai (the DRAT), dismissing their appeal in R.A. No. 44 of 2009 by confirming the order dated 17-8-2007 (Annexure-U) of the Debts Recovery Tribunal, Bangalore (the DRT) in the application in O.A. No. 393 of 2002. The DRT by its order dated 17-8-2007 (Annexure-U) allowed the Application of the respondent-Bank in O.A. No. 393 of 2002 by directing the petitioners herein to pay jointly and severally Rs. 1,31,14,131/- (One Crore Thirty-one Lakhs Fourteen Thousand One Hundred and Thirty-one) with interest thereon at the rate of 16% p.a. with quarterly rests from the date of the application till the date of payment. Being aggrieved of the said order, the petitioners preferred an appeal to the DRAT in R.A. No. 44 of 2009. The DRAT, by its order dated 12-9-2013 (Annexure-W), has dismissed the appeal by confirming the order dated 17-8-2007 passed by the DRT, Bangalore in O.A. No. 393 of 2002. At the time of preliminary hearing of these petitions, it prima facie appeared that the plea of bar of limitation against the claim made by the respondent-Bank had either not been pressed or considered by the DRT or DRAT. Therefore, notice for final disposal was issued to the respondent and we heard the learned Counsel for the parties in extenso.

(2.) The sole contention urged by Sri S.S. Naganand, learned Senior Counsel appearing for the petitioners, is that the Application in O.A. No. 393 of 2002 filed by the Bank before the DRT, Bangalore was barred by limitation as it was not filed within three years from the date, the right to sue accrued to the respondent-Bank for filing of the application. In support of his contention, he referred to Article 113 of the Limitation Act, 1963. Therefore, the only question that arises for determination in these petitions is as to whether the Application in O.A. No. 393 of 2002 filed before the DRT, Bangalore by the respondent-Bank was filed within the period of limitation allowed by law?

(3.) The petitioners had entered into five forward contracts for procurement to the tune of 87 Million Sri Lankan Rupees (SLR) to be paid to a Malaysian supplier against import of non-ferrous metal. The forward contracts were entered on the basis that exchange rate applicable for Asian Clearing Union (ACU) would be applicable. The petitioner-Company cancelled three of the five contracts and claimed from the respondent-Bank swap gain arising from the exchange rate difference and cancellation of the forward contracts. The Bank issued notice dated 28-10-2001 to the petitioners to state that the contracts were booked at the petitioners' specific request and undertaking to abide by the exchange control regulations and rules. The Bank had booked the contract in 1993 and paid the amounts but the same was objected by the Reserve Bank of India on the ground that the shipment of the goods was from a non-ACU country. Therefore, the Bank had to reimburse the Reserve Bank of India by paying Rs. 1,31/14,131/- on 8-12-1998. Therefore, the petitioners were called upon to pay that amount with interest at the rate of 18% p.a. The Reserve Bank of India had, in fact, advised the Bank by its letter dated 15-4-1996 to surrender that amount with penal interest and examine the aspects of staff accountability and send a report in that regard. The respondent-Bank had to inform the Reserve Bank of India by its letter dated 8-12-1998 that: "We are now paying the difference between the rupee equivalent of the entire amount of the contract at the rates based on market rate and RBI official rate.................". The petitioners had however denied their liability to repay the amount, while admitting in their reply dated 15-12-2001 that there was a gain to them of Rs. 52,75,000/- (approx.) which had to be paid to them by the respondent-Bank. Thus, in short, the liability of the petitioners had arisen out of the contract between them and the respondent-Bank, and the cause of action had arisen for the Bank when it had to pay the differential amount.