SGS INFRATECH LTD Vs. PUNJAB AND SINDH BANK

JUDGEMENT

(1.) This is a suit for recovery instituted by the plaintiff SGS Infratech Limited [hereafter "plaintiff company"], against the defendant Punjab and Sind Bank [hereafter "defendant bank"], seeking recovery of 2,24,89,361/- along with interest of 67,46,808/-, along with pendente lite and future interest at the rate of 18% per annum.

(2.) The plaintiff company is a public limited company incorporated under the Companies Act, 1956, engaged in the business of construction and similar activities. It is also involved in developing and acquiring commercial properties, earning income either through the sale or rental of such properties. In 2006, the plaintiff company decided to purchase a commercial mall namely Magnum Mall [hereafter "the Mall"], a fully constructed property with certain shops being rented out, for a total sale consideration of 147 crores.

(3.) To finance this purchase, the plaintiff company approached Indian Overseas Bank [hereafter "IOB"] for financial assistance of 130 crores. IOB agreed to provide 80 crores and advised the plaintiff company to seek the remaining 50 crores from other financial institutions or banks. Consequently, the plaintiff company sought assistance from the defendant bank and Punjab National Bank [hereafter "PNB"] for 25 crores each. Both the banks agreed, and based on their confirmations, the plaintiff company re-approached IOB, which issued a sanction letter dtd. 5/9/2006, sanctioning 80 crores. The repayment was to be made in 115 installments starting November 2006. To secure this financial assistance, the plaintiff company created securities in favor of IOB.