PANJWANI PACKAGING LTD. AND ORS. Vs. ALLAHABAD BANK

JUDGEMENT

(1.) THROUGH the writ petition at hand challenge is brought to order dated 03.11.2014 passed by Debts Recovery Appellate Tribunal (DRAT) in appeal No. 115/2014 arising out of original application (OA) No. 591/97 decided by the Debts Recovery Tribunal (DRT) on 11.10.2012.

(2.) THE background facts lie in a short compass and may be noted at the outset. The petitioner No. 1 is a company incorporated and registered under the Companies Act having its office in Indore, Madhya Pradesh. The petitioner No. 2 is one of the Directors while petitioner No. 3 is legal heir of one of the co -defendants (defendant No. 7 - since deceased, also a Director) before the DRT. The petitioner -company had opened a current account with respondent -bank (hereinafter referred to as "the bank") on 21.2.1991. It approached the bank for collection of applications for allotment of shares of its public issue scheduled to be opened in April, 1992. The public issue offered for allotment 18 lakh equity shares of Rs. 10/ - each. The public issue account was opened by the petitioner -company on 06.04.2012 with the Parliament Street Branch of the bank, which had designated its various branches to collect the applications, such branches including Muskati Market Branch at Ahmedabad (Gujarat).

(3.) IT is not in dispute that on 19.12.1995, the Parliament Street Branch of the bank received a communication from the Income Tax Authorities requiring it to submit the statement of account of the petitioner -company. It has been the case of the petitioner -bank that it was at this stage that the erroneous double credit of the two amounts in favour of the petitioner - company against the aforementioned two remittances received from Ahmedabad Branch came to be noticed. It is not in dispute that the bank called upon the petitioner -company to refund the said amounts by way of re -deposit but the petitioners refused to comply. It is alleged by the bank that the withdrawals were made by the Directors of the petitioner -company knowing fully well that the money did not belong to them and had been credited for the second time by mistake. Attributing intentional and dishonest misappropriation of the money having been withdrawn by taking advantage of the inadvertent error, the bank lodged a first information report (FIR) No. 504/1996 under Sections 403/420/406/34 IPC with Police Station Parliament Street, New Delhi. The bank also issued notice on 10.4.1997, and another on 22.8.1997, demanding the return of the money along with interest calculated @ 22.75%. The OA was presented against the above backdrop claiming recovery of the sum of Rs. 92,52,764/ - along with interest pendent elite and future, until payment, in addition to costs.