ISWARI PRASAD TANTIA Vs. BANK OF BARODA

JUDGEMENT

(1.) No organisation or businessman wants to be labelled as a wilful defaulter by a bank or a financial institution. With this label on the head, the organisation or the businessman would have a very poor rating in the business community. Nobody would take any interest to do business with him, or the organisation or giving them any financial credit. No bank or financial institution would grant them loan and those who have already given loan would not think of enhancing it. Instead, it would quickly take steps to realise it. Such a businessman cannot be a promoter or be on the board of directors of a company which has obtained or is seeking loan from a financial institution. The management of the organization may be changed by the concerned authority. Without loan or financial assistance no business can survive. Therefore, being declared as a wilful defaulter of a bank is a very serious matter for a businessman or a business organisation.

(2.) In this case the appellant No. 1 was the Chairman cum Managing Director of Tantia Construction Ltd. The appellant No. 2 was its whole time director. This company had borrowed money from Vijaya Bank (Now Bank of Baroda) and not repaid it. Another company Castal Extrusion Pvt. Ltd stood guarantor for this loan.

(3.) In this context it is relevant to state that on 10th March, 2014 the bank had served on the borrower company and Castal Extrusion Pvt. Ltd (as its corporate guarantor) notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, (SARFAESI) Act, 2002.