BARCLAYS BANK PLC Vs. SAT INDUSTRIES LTD.

JUDGEMENT

(1.) THIS Appeal, under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short the RDDBFI Act), has been directed by the original applicant against the impugned order dated 5th March, 2013 passed by Shri A. Vijay Kumar, the learned In -charge Presiding Officer (learned P.O.), Debts Recovery Tribunal (DRT) No. 1, Mumbai, on Interim Application (I.A.) No. 414/2012 filed by the defendant in Original Application (O.A.) No. 118/2012, Barclays Bank PLC v. SAT Indus tires Ltd., where -by the learned Presiding Officer has allowed the aforesaid I.A. and thereby has dismissed the Original Application on the ground of lack of territorial jurisdiction. The relevant facts giving rise to the present Appeal may be briefly stated as under:

(2.) THE appellant is a Banking Company incorporated in the United Kingdom and registered in England and is said to be a scheduled commercial Bank in India carrying on its Banking business across the world. The principal borrower, SAT Middle east FZC, Dubai, is the wholly owned subsidiary Company of the defendant, SAT Industries Ltd., which carried on its business in Dubai. The principal borrower availed certain credit facilities sanctioned by the appellant. The respondent, SAT Industries Ltd., stood guarantor to the credit facilities availed by the principal borrower and executed a limited corporate guarantee on 1st August, 2009 in favour of the appellant. The principal borrower indisputedly committed default in repayment of the amount of the credit facilities availed by it. The appellant, therefore, filed Original Application No. 118/2012 against the defendant i.e., the guarantor Company for recovery of amount of AED 2,672,974.31 i.e. equivalent 'to Rs. 4,09,23,236.68 due as on 31st March, 2012 together with interest @ 15.31 % from the date of filing of the Original Application till final realization.

(3.) THE aforesaid I.A. was opposed the appellant by filing affidavit of Mr. Pradnayesh Sabnis, its Constituted Attorney, in reply. The deponent has denied the contentions raised by the defendants in the aforesaid I.A. The deponent has stated that defendant had executed limited corporate guarantee for AED 3,50,000/ - on 1st August, 2009 thereby guaranteeing the due repayment of all the amounts which are due and payable by the principal borrower i.e. SAT Middle east Limited EZC, situated at Dubai, in favour of the applicant. The corporate guarantee executed by the defendant on 22nd July, 2009 which was pre -signed by two officials of the applicant in Dubai on the same date and thereupon the said corporate guarantee was sent to the defendant in Mumbai for execution which was executed on 1st August, 2009 in accordance with normal Banking practices/norms. The whole time Director of the defendant, Mrs. Shehnaz D. Ali, has executed the said corporate guarantee on 1st August, 2009 in favour of the applicant thereby irrevocably and unconditionally guaranteeing to repay on demand all the amounts due and payable by the principal borrower under the facility. Since the principal borrower is the wholly owned subsidiary of the defendant in Dubai. The defendant has its registered office in Mumbai and it carries on its business for gain in Mumbai. The instrument/document i.e. corporate guarantee was executed by the defendant in Mumbai, therefore, DRT -I Mumbai, has got territorial jurisdiction to entering and dispose of the Original Application filed by the applicant Bank.