M/S. SBQ STEELS LTD. Vs. INDIAN BANK

JUDGEMENT

(1.) Heard the learned counsel appearing for the petitioner and the learned counsel appearing on behalf of the respondents.

(2.) IT has been stated that the petitioner is engaged in the business of manufacturing of iron and steel products. The petitioner had established the factory in Nellore District, in the state of Andhra Pradesh, for manufacturing the iron and steel products. The petitioner had approached several banks, including the respondent bank, for availing a loan facility. The petitioner had mortgaged certain immovable properties, as security. After obtaining the loan facility, the petitioner had been carrying on the business in the manufacture of iron and steel products. While so, the petitioner had incurred financial losses, due to various factors. Therefore, the petitioner could not repay the loan amounts, within the stipulated period. In such circumstances, the respondent bank had given instructions to their Branch at Gudur, to freeze the accounts of the petitioner. Thus, the respondent bank had acted in an arbitrary, high handed and illegal manner, contrary to the principles of natural justice. There is no law authorizing the respondent bank to exercise a lien on the amount lying in the account of the petitioner. There is no power or authority vested in the respondent bank to set off the amount towards the liability of the petitioner.

(3.) MR .S.R.Rajagopal, the learned counsel appearing for the petitioner had submitted that the act of the first respondent bank in issuing certain instructions for the freezing of the accounts of the petitioner, with the second respondent and the directions issued for the transfer of the amount to the third respondent, for being appropriated, without obtaining the necessary consent or approval from the petitioner, is contrary to the relevant provisions of law, including the rights of the petitioner enshrined in the Constitution of India.