JAMMU AND KASHMIR BANK LIMITED Vs. MAYUR EXPORTS

JUDGEMENT

(1.) Plaintiff is a banking company constituted under the Jammu & Kashmir Companies Act. One of its branch offices is at Baba Kharak Singh Marg(Irwin Road), New Delhi, The defendant No.1 is a sole proprietorship concern of the defendant No.2. The defendants approached the plaintiff bank with request to grant packing credit loan. The defendants also opened a current account No.710 with -the aforesaid branch of the plaintiff bank. Packing credit loan of Rs.45.000.00 was granted and this amount was credited in the aforesaid current account. Thereafter defendants requested for grant of export credit facilities and after examining the proposal of the defendants, the plaintiff bank granted the following export credit facilities: a) Shipping Loan Rs.2,00,000/" ] (Rupees Two lacs only) ] Overall Rs .2,00,000.00 (Rupees two lacs only) b) Packing Credit Loan Limit ] Rs .75,0007-(Rupees Seventy ] five thousand only) ] c) Purchase of Foreign ] Documentary Bills of ] Overall Rs.3,25,000/ Rs.3,00,000.00(Rupees ] (Rupees three lacs three lacs only) ] twenty five thousand only) d) Advance against duty draw ] bank/cash incentive ] Rs.25,000.00(Rupees twenty ] five thousand only) ] -------------------- Overall Rs.5,25,000/ --------------------

(2.) These facilities were granted against the hypothecation of stocks i.e. ready-made garments, handicrafts, packing material, machinery, plant and office equipment. The defendants also created equitable mortgage of land measuring 1008 sq.yrds. out of Khasra No.96/98 situated in the area and revenue estate of village Holambi Kalan, Delhi. Defendants were to pay interest at the rate of 2.5 per cent above the Reserve Bank of India rate subject to a minimum rate of 12.5 percent per annum with quarterly rests on the aforesaid facilities. The defendants had deposited original title deed dated 31/10/1981. The defendants also executed various documents and undertook to deal with the plaintiff bank exclusively, utilise the limits for the business of the defendants and not to create any charge. lien or encumbrance on the securities during the subsistence of the aforesaid limit. It is the further case of the plaintiff that the defendants availed packing credit facilities loan from time to time- However, following out of these were adjusted: --------------------------------------------------- S.No. PCL No. Date Amount --------------------------------------------------- 1. 60 20.01.1983 40,000.00 2. 62 03.02.1983 10,000.00 3. 71 12.03.1983 20,000.00 4. 83 28.04.1983 45,000.00 5. 94 23.05.1963 20,000.00 6. 95 23.05.1983 7,000.00 7. 100 28.05.1983 15,000.00 8. 103 01.06.1983 12,000.00 9. 114 01.08.1983 16,500.00

(3.) Further a sum of Rs.6,000.00 was advanced to the defendants on 14/04/1983 under the head advance against duty draw back/cash incentives'. The defendants also availed 'foreign documentary bills limsU,' from time to time. However, following documents were returned dishonoured : ---------------------------------------------------------------------- S.No. Bill No. Date of Advance Amount ---------------------------------------------------------------------- 1. CP/IR/25/83/15 08.04.1983 77,258.00 2. CP/P026270/83/25 12.09.1983 26,676.50 3. CP/IR/26/83/14 20.05.1983 37,271.00 4. CP/IR/26/83/15 20.05.1983 28,982.00 5. CP/IR/26/83/18 20.05.1983 26,334.00 6. CP/IR/26/83/20 01.06.1983 16,213.00 7. CP/C-026255/83/37 01.08.1983 22,230.00