RAMANJIT KAUR Vs. PUNJAB & SIND BANK

JUDGEMENT

(1.) THE instant application has been filed under Section 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the RDDBFI Act) for waiver of the deposit required for the entertainment of appeal. Though the respondent Bank is opposing this application, yet it has not filed any formal reply to the application and has prayed for treating the reply filed to the appeal as the reply to this application also.

(2.) I have heard Mr. Amit Dhupar, the learned Counsel appearing for the appellant and Mr. Rajinder Wali, the learned Counsel for the respondent Bank and perused the record. The appellant has also filed written submissions qua the said application.

(3.) THE relevant facts for the purpose of disposal of this application, in brief, are that the respondent Bank had sanctioned the credit facility of Overdraft against property (ODP) limit to the extent of Rs. 6.5 lacs to respondent No. 2, on 20.2.1977, on execution of loan documents and creation of equitable mortgage of two properties of, (i) Vasant Vihar, New Delhi and (ii) Naraina Industrial Area, Ring Road, New Delhi. The borrower/respondent No. 2, however, requested the Bank for release of the aforesaid properties, stating that the sanctioned limit would be secured by another property bearing No. 8/25, West Patel Nagar, New Delhi. She also requested the Bank to reduce and convert the ODP Limit of Rs. 6.5 lacs into a term loan of Rs. 4 lacs. The Bank accordingly sanctioned the term loan of Rs. 4 lacs, against the equitable mortgage of the said Patel Nagar property, which was jointly owned by the appellant and respondent Nos. 2 and 3, to which the appellant and respondent No. 3 stood as guarantors and necessary documents, including guarantee agreement and Form 84AA regarding the deposit of title deeds, were executed by them. The said loan was termed as Loan against Property (LAP). The borrower/respondent No. 2 failed to regularize the balance amount of Rs. 2.5 lacs in the ODP account and the LAP account also became irregular. The borrower, despite acknowledging her liability of Rs. 2.97 lacs in the ODP account as on 11.8.1979 failed to repay the same. On 27.11.1981, a sum of Rs. 4,91,785.21 was outstanding in the ODP account and an amount of Rs. 6,85,791.80 was outstanding in the LAP account on 19.12.1981 qua which respondent Nos. 2 and 4 had executed a guarantee agreement, balance confirmation letter and fresh security documents. Respondent No. 5 also secured the lean by creating equitable mortgage of his property bearing No. E -20, Panchsheel Park, New Delhi and took personal guarantee for the repayment of the loan amount. When the borrower defaulted in payment of the amount of the debt due qua both the accounts, the Bank filed a civil suit OS (CS) No. 2752/1988 before the Delhi High Court for the recovery of Rs. 43,92,661/ - along with pendente lite and future interest. However, on coming into force of the RDDBFI Act, the suit was transferred to the DRT where it was registered as O.A. No. 276/1996.