TAPAN KUMAR MUKHOTY Vs. BANK OF MADURA LIMITED

JUDGEMENT

(1.) These two civil revision cases arise out of two applications under Article 227 of the Constitution of India challenging the legality of three orders being Orders Nos. 22 dated 2-5-95, 24 and 25 dated 8-5-95 passed in a proceeding being O.A. No. 41 of 1994 pending before the Debts Recovery Tribunal, Calcutta.

(2.) These two cases have a chequered background and the facts relevant for disposal of these two cases may, in short, be stated as follows.The proceeding before the Debts Recovery Tribunal arose out of an application filed on 9-8-94 by the opposite party No. 1 bank against the petitioner under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'The Act of 1993') for a certificate for recovery of a sum of Rs. 21,93,500/- together with interest thereon on the following allegations.The petitioner represented to the bank that he was carrying on a business under the name and style of Mukhoty Engineering Works at 43/6/24, Jhill Road, Calcutta. At the request of the petitioner, on or about 24th May, 1994 the bank granted a credit facility in the nature of bill discounting facility in favour of the petitioner and/or his proprietorship firm at the bank' Burrabazar branch office to the extent of Rs. 21,93,500/- at the rate chargeable in respect of such facility. In pursuance of the grant of the said credit facility, the petitioner opened a current account in the Burrabazar branch office of the opposite party bank in the name of the said proprietorship firm of the petitioner. The bank granted the credit facility to the extent of Rs. 20,97,712/- by discounting a bill of the petitioner being Bill No. 326 dated 30th April, 1994 drawn on the opposite party No. 2, Tata Iron and Steel Company Limited, Jamshedpur for a total sum of Rs. 21,93,500/-. The petitioner also drew bill of exchange upon Tata Iron and Steel Company in favour of the opposite party bank for a sum of Rs. 21,93,500/-. As per the said bill of exchange, the Tata Iron and Steel Company was the drawee and the opposite party bank was the payee thereof. The said loan and advances made by the bank were secured by the aforesaid bill No. 326 dated 30th April, 1994 drawn on Tata Iron and Steel Company and also the bill of exchange dated 30th April, 1994 which was payable after 90 days to the bank or order. In acknowledgment of the said loan and for the purpose of creating or securing that loan, the petitioner did also execute demand promissory note dated 30th May, 1994 for a sum of Rs. 21,93,500/- repayable by the petitioner together with interest and a bill purchase agreement at 30-5-94. Subsequent to the disbursement of the loan amount under the said bill purchase facility, the petitioner approached the bank for discounting further bills for diverse amounts. The bank, before granting for their credit facility in the nature of bill discount, insisted on compliance with certain requirements by the petitioner, such as arranging for inspection of the site of the petitioner' firm but the petitioner avoided such compliance and on some evasive pleas. The bank became suspicious about the conduct of the petitioner, accordingly produced the said bill along with the copy of the challan and the bill of exchange before the opposite party No. 2 on 16th June, 1994 for verification of its genuineness whereupon it transpired that the said documents were forged and not genuine. The bank thus came to know about the real intention of the petitioner which was to deceive the bank on false representations and withdraw the money which was lent on advance by the bank. After the detection of the fraud, the bank lodged an FIR with the Deputy Commissioner of Police, Detective Department, Lalbazar on 9th July, 1994 on the basis of which a criminal proceeding has been initiated against the 7 petitioner. The petitioner was arrested in connection with that case and was in police custody. Before the lodging of complaint with the police authority, the petitioner had paid a sum of Rupees 50,000/- by cheque dated 5th July, 1994 towards part payment of the sum which was fraudulently withdrawn by him in the manner stated above. The bank has kept the said sum in the suspense account. In the circumstances, a total sum of Rs. 21,93,500/- inclusive of interest calculated up to 10th August, 1994 was due from and payable by the petitioner to the bank under the said bill purchase facility which the petitioner has failed and neglected to pay in spite of demands.

(3.) On 10-8-94, on the prayer of the bank, the Tribunal was pleased to pass an interim order of injunction against the petitioner.