STATE OF NAGALAND Vs. UCO BANK

JUDGEMENT

(1.) The State of Nagaland, represented by the Secretary in the Department of Industries and Commerce has filed this petition under Article 226/227 of the Constitution praying for issuance of appropriate writ for quashing the impugned order dated 6-5-2003 passed in pursuant to the ex parte order dated 15-7-2002 in OA No. 62/99 by the Recovery Officer, Debts Recovery Tribunal, Guwahati.

(2.) By the impugned order, the Recovery Officer directed the Regional Director, Reserve Bank of India, Guwahati to deduct the amount of Rs. 3,99,12,814.35 from the Principal Deposit A/c of the Government of Nagaland and further to deposit the same with the Recovery Officer.It may be mentioned here that the learned Tribunal, by the order dated 15-7-2002 passed in OA No. 62/99, issued recovery certificate in favour of the respondent Bank for an amount of Rs. 2,90,94,743.35 with interest thereon @ 10% per annum from the date of filing the application. This order was passed on an application filed by the respondent Bank, Dibrugarh Branch for recovery of the outstanding balance of the amount advanced by the Bank by way of credit facilities. It is pertinent to mention here that this order was passed ex parte as, according to the learned Tribunal, the defendants (State of Nagaland) failed to appear to contest the claim despite service of notice. The State however, in para 24 of the writ petition, averred that they had no notice of the aforesaid application filed by the Bank for recovery of the amount. The State also controverted their liability in liquidating the debt of a Company, namely, M/s. Nagaland Forest Products Limited, acquired by the State by an Act of Legislature, without notice of the liabilities/dues to the respondent Bank.

(3.) It would appear from the materials on record that the State of Nagaland have preferred an appeal before the Debts Recovery Appellate Tribunal, Kolkata u/S. 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, for short, "the Act of 1993", with an application for condonation of delay. In the said memo of appeal, the State have, apart from substantive prayer, also prayed for stay of further proceedings for recovery of debt under Chapter V of the Act of 1993.