PUNJAB NATIONAL BANK Vs. THAKUR STONE CRUSHER

JUDGEMENT

(1.) This petition is filed by the punjab National Bank (the Bank1 for short) against an order passed by the Debts Recovery Appellate Tribunal. Mumbai on August 5. 1999. in Appeal No. 253/98 partly allowing the appeal filed by M/s. Thakur Stone Crusher and others - respondents No. 1 and 2 herein, which was filed by the respondents against an order passed by Debts Recovery Tribunal. Jaipur, on February 18. 1998 in Original Application No.295 of 1997.

(2.) The Plaintiff -Bank filed an application on May 5. 1997 under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act. 1993. (hereinafter referred to as "the Act"), against the respondents -defendants for recover} of Rs. 14.01.300/ -. The case of the plaintiff -Bank was that defendant No,2 {Lt. Col. T.R. Thakur. (Retd). was the sole proprietor of defendant No.l M/s. Thakur Stone Crusher. It was averred that in pursuance of a written application dated July 18. 1990 to the Bank, a term loan of Rs.6.10 lacs with minimum interest of 12 1/2% per annum with half yearly rests was advanced to the defendants. Defendant No.2 executed necessary documents on August 20. 1990 and availed of the facility of loan. To secure the repayment of the loan, defendant No.2 also deposited title deeds with the intention to create equitable mortgage and confirmed outstanding balance from time to time. The defendants, however, failed to re -pay the amount. Hence, the application.

(3.) A reply was filed by the defendants, inter alia, contending that the applicant -Bank was to advance loan of Rs.8.70 lacs, which was sanctioned and that too at the simple rate of interest of 12 1/2% per annum. The terms of the documents were not disclosed to the defendants nor copy sanction letter was given to them and signatures of the defendants were obtained on blank forms. It was. however, admitted that an amount of Rs.6.10 lacs was released by the plaintiff -Bank. It was stated that the documents of title were not deposited with intention to create equitable mortgage and those documents were demanded by the petitioner only to examine the worthiness of the defendants. The plantiff -Bank had clahned certain amounts towards guarantee fee. etc. illegally. The interest calculated was at a higher rate, which was never agreed by the defendants and. hence, the plaintiff -Bank was not entitled to such rate of interest. Affidavits and further affidavits were filed by the parties before the Original Tribunal.