PG FOILS LTD Vs. BANK OF RAJASTHAN LTD

JUDGEMENT

(1.) This petition under Articles 226 and 227 of the Constitution of India challenges the impugned judgment dated 19.11.2007 of the Debt Recovery Appellate Tribunal (DRAT) whereby the DRAT dismissed the appeal of the petitioner against the judgment of the the Debt Recovery Tribunal (DRT) dated 12.7.2004. By the judgments, both the DRT and DRAT, have allowed the claim of the respondent bank herein and have granted a decree for the amount of Rs.21,20,466/- plus interest @ 13.5% per annum from 31.12.1995 to 6.3.1998 and pendente lite and future interest @ 11% per annum.

(2.) The case, the issue and the conclusion in the present case as urged by the counsel for the petitioner and which we accept, is that there was no reason for the petitioner to take a loan in the form of an over draft in the current account maintained with the respondent bank when the respondent bank had in fact fixed deposits of the petitioner lying with it and which amounts should have been credited to the current account for clearing of the refund orders issued by the petitioner company and which action the respondent bank ought to have taken in terms of the Agreement between the parties.

(3.) The facts of the case are that the petitioner company came out with a public issue in 1994 and the issue was over-subscribed. The petitioner, therefore, requested the respondent bank to act as a banker for refund of the amount of the over-subscription to the unsuccessful applicants of the shares. For this purpose, two documents were executed between the parties being the Agreement dated 7.3.1995 entered into between the parties and the letter dated 17.2.1995 addressed by the respondent bank to the petitioner and which also incorporated the agreed terms. Before proceeding further, it is necessary to reproduce certain important terms between the parties in the aforesaid two documents and which are as under: