STATE BANK OF INDIA Vs. STEPHEN ARANHA

JUDGEMENT

(1.) The petitioner (hereafter 'SBI') has filed the present petition impugning an order dtd. 20/10/2015 passed by the learned Debts Recovery Appellate Tribunal (hereafter 'the DRAT') in Appeal no. 220/15 captioned Stephen Arhana v. State Bank of India and Ors. The aforesaid appeal was filed by the respondents impugning an order dtd. 30/6/2014 passed by the learned Debts Recovery Tribunal (hereafter 'the DRT') whereby SBI's Original Application (OA), filed under Sec. 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.42,83,11,137.00 along with the interest, was allowed against the parties arrayed as respondent nos.1 to 4. Respondent no.1 was arrayed as respondent no.3 in the said O.A. filed by SBI and thus, in terms of the order dtd. 30/6/2014 passed by the learned DRT, was held to be liable to pay the amounts due to SBI.

(2.) SBI had extended financial assistance to respondent no.2 (M/s Altos India Ltd.) which was both fund based and non-fund based. It is SBI's case that the facilities extended to respondent no.2 were guaranteed by promoters and directors, including respondent no.1. The controversy, in the present appeal, is confined to the liability of SBI's claim against respondent no.1 as a guarantor for the financial facility extended to respondent no.2.

(3.) Respondent no.1 as well as the other parties, who were arrayed as parties before the learned DRT as guarantors for the loans/facilities extended to respondent no.2, had denied their liability on several grounds, including that the documents executed by them were secured by misrepresentation and were invalid. However, the said contentions were rejected. It is respondent no.1's case that he was an employee of respondent no.2 and had signed certain documents in his capacity as a director. He had no personal liability for the debts owed by respondent no.2. The learned DRT rejected the aforesaid contention and found that respondent no.1 had executed the Deed of Guarantee as respondent no.1 had admitted his signatures on the said document.