(1.) M/s. Nurit Inks (P).Ltd represented by its Managing Director G.Ramachandran is a constituent of the Indian Bank, Mylapore Branch since 1984. On 20.12.1991 Thiru. G.S. Subbaraman as the Chief Manager of Indian Bank, Mylapore Branch purchased a Foreign Cheque bearing No. 79584032 A/c with Union Bank, Switzerland, Zurich for Swizz Franc One Lakh issued by one Ms. Malliga Saravanamuthu payable to NIFE.AB. The cheque was endorsed by the payee to Shri G.Ramachandran of M/s. Nurit Inks (P) Ltd. The proceeds of the cheque was credited into the savings bank account of G.Ramachandran and he had withdrawn the amount subsequently. The cheque so purchased by G.S.Subbaraman and encashed by Ramachandran returned unhonoured on 08.01.1992 for the reason " cheque blocked". A sum of Rs. 18,63,932/- being the FBP liability was reversed on 14.01.1992. Later, Shri N.Kumar, nephew of G.Ramachandran remitted Rs. 12 lakhs on 23.1.1992, Rs. 5 lakhs on 24.1.1992 and Rs. 2 lakhs on 25.01.1992 totally a sum of Rs. 19 lakhs towards this liability and the same was credited into the account of Ramachandran on 04.02.1992 and adjusted towards the PBP liability and interest.
(2.) Again, on 05.02.1992, G.S. Subbaraman purchased another cheque bearing No. 79584035 issued by Ms. Malliga Saravanamuthu in favour of N.Kumar for a sum of 1 lakh US Dollars in the A/c of Union Bank, Switzerland, Zurich. On the same day, i.e., 05.02.1992, Rs. 20 lakhs from the proceeds of the cheque purchased was credited into the account of N.Kumar and remaining balance amount, Rs. 5,45,652/- was used to create a short term Fixed Deposit for 46 days in the name of N.Kumar. On 07.02.1992, against the above said short term deposit, loan of Rs. 4,09,000/- was sanctioned to N.Kumar and credited into the account of M/s. Nurit Inks (P) Ltd, by the Senior Manager, Subbaraman.
(3.) The cheque so purchased on presentation for collection, returned on 19.02.1992 with endorsement 'A/c closed'. The cheque was represented on 30.03.1992. Once again the cheque got bounced on 09.04.1992 for the very same reason. A sum of Rs. 30,30,303/- was reversed into unpaid account on 02.07.1992, after lapse of 3 months. To secure the foreign Bill Purchase (FBP) liability, the title deed of the house and the building of one Chandrakanthamma situated at Mahalakshmi Street, T.Nagar, Chennai was given to create the equitable mortgage on 07.02.1992.