HOTEL SHARADA PARADISE AND ORS. Vs. THE SECRETARY TO THE GOVERNMENT OF INDIA, DEPARTMENT OF FINANCE AND ORS.

JUDGEMENT

(1.) Initially aggrieved by the Judgment dated 16-8-2010, passed by a Single Judge of this court in two writ petitions, namely W. P. No. 36955/2009 and W. P. No. 29729/2009, whereby the Learned Single Judge has dismissed both the writ petitions, the appellant has approached this court.

(2.) This case has a rather checkered history: in order to construct a hotel, in 1998, the appellant-firm had borrowed Rs. 70 Lakhs from the respondent No. 2, the pSyndicate Bank. For the purpose of securing the loan, the appellant-firm had mortgaged three of its properties with the Bank. However, according to the appellant, the Bank released Rs. 25 Lakhs in 1998 and another Rs. 25 Lakhs in 1999. Thus, in total, the Bank lent only an amount of Rs. 50 Lakhs to the appellant-firm. Since the entire loan amount was not paid to the appellant-firm, it could neither complete the construction of the hotel, nor earn in its business. Till 2001 the appellant-firm regularly paid the loan installments; subsequently, due to huge losses, it became a defaulter.

(3.) Since the appellant could not repay the loan, the Bank filed an application, namely O. A. No. 471/2002, under Section 19 of the Debt Recovery Tribunal Act, 1993, before the Debt Recovery Tribunal, Bangalore ('DRT' for short) for recovery of Rs.79,25,643/-. By order dated 2-12-2004, the DRT allowed the application and directed the appellant to pay a sum of Rs.79,01,827/- with future interest @ 19% per annum compounded quarterly, from the date of the application, namely from 3-7-2002 till the date of the payment. The Bank was permitted to realize the amount by sale of Schedule 'A', 'B', 'C', the mortgaged property, and Schedule 'D', the hypothecated properties. Since this order was not challenged by either of the parties, it became final.