G SIVA PRASADA REDDY AND COMPANY Vs. PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL OF ANDHRA PRADESH AND KARNATAKA BANGALORE

JUDGEMENT

(1.) Petitioners seek a Writ of Certiorari or any other Writ or Order calling for the records relating to Recovery Certificate of Debts Recovery Tribunal, Bangalore - first respondent in O.A. No. 1033 of 1995 and the consequential demand notice issued by the second respondent on 9-11-1998, and to quash the same as contrary to law and to pass appropriate orders as this Court deems fit and proper.

(2.) Petitioner No. 1 is a partnership firm and the second petitioner is itsManaging Partner. Respondents 4 to 8 herein are the partners of the first petitioner-Company which is engaged in doing civil contract works for the States of Andhra Pradesh and Maharashtra. During the course of business, the first petitioner approached the third respondent-Bank for financial assistance. The third respondent-Bank sanctioned two facilities in the month of August, 1998 (sic. 1988). viz., (1) Rs. 15 lakhs towards Cash Credit facility on hypothecation of stocks; and (2) Bank Guarantee upto a limit of Rs. 35 lakhs. The Cash Credit account was operated by the first petitioner upto February, 1991. Thereafter, the account was not permitted to be operated by the third respondent-Bank on the ground that over dues accumulated in the Cash Credit Account. The respondent No. 3 - UCO Bank paid a sum of Rs.8,45,000/- on 12-8-1988 towards Bank Guarantee facility. However, the said bank guarantee was not utilised fully by the petitioners. Petitioners also paid some amounts to the bank from time to time and the respondent No. 3 - Bank had also appropriated the interest on FDRs kept by the petitioners with the Bank. Since February, 1991, there was no operation of Cash Credit Account by the petitioners.

(3.) While so, the third respondent-Bank has filed O.A. No. 1033 of 1995 against the petitioners 1 and 2 and respondents 4 to 8 herein for recovery of Rs. 19,31,313/- before the first respondent herein. Petitioners and respondents 4 to 8 herein have filed their reply, inter alia, contending that the third respondent-Bank had calculated interest at 22.25 per cent per annum over and above the contractual rate of interest fixed at 16.5%. It was further contended that an amount of Rs. 27,77,085/- was paid to the Bank in C.C. account. It was also contended that an amount of Rs. 4,46,860-11 ps. paid by the petitioners was not credited to the said account.