HARI PROSAD NOPANI Vs. CANARA BANK

JUDGEMENT

(1.) The complainant/petitioner lodged this complaint before the State Commission inter alia on the ground that the two pay orders issued in his favour by the opposite party No.1 one for Rs.3,000,00 (three lakhs) and another for Rs.1,50,000/- aggregating to Rs.4,50,000/- were lost on transit, as such the complainant/petitioner applied for duplicate issue of the said two pay orders and furnished Indemmity Bond to that effect through his Banker A. N. Z. Grindlays Bank, inspite of that the opposite party Nos.1 and 2 did not pay any heed to the request of the complainant/ petitioner. It is alleged that the petitioner/complainant lastly through his Ld. Advocate sent a notice dated 31.10.1990 to the opposite party No.1 demanding payment of Rs.4,50,000/- covering the amounts of the two lost pay orders within fortnight there from failing which he threatened to institure a suit against the opposite parties for recovery of the same together with interest and cost.

(2.) The defence case of the opposite party Nos.1 and 2 is that M/s Paharimata Iron Works Private Ltd. (hereinafter referred to as the said company) is a constituent of the opposite party No.1 and the petitioner/complainant is the Managing Director and his wife is a Director of the said company. The said company enjoyed cash credit facility and obtained various loans from the opposite party No.1. It is alleged that as the said company could not pay huge sums on account of different loans and dues, the opposite party No.1 instituted a suit before the Hon'ble High Court being suit No.138 of 1979. The said suit was decreed on 17.7.1979 by consent of the parties in favour of the opposite party No.1. It is further contended that the said decree was modified by Memorandum of Settlement dated 21.8.84 and under various terms appearing in the Memorandum of Settlement, the petitioner/ complainant herein became an added Director and subsequently he became the Managing Director and stood as guarantor for the said company is respect of loans and dues outstanding to the opposite party No.1 and also for the future debt to be incurred by the said company. It is the allegation of the opposite party No.1 that the fresh loan were sanctioned to the said company forgiving its life but still the said company could not overcome the crisis, as a result the said company and its guarantor including the petitioner/complainant herein owed to the company a colossal amount of about Rs.62,000,00/-. The said company and/or the petitioner/complainant did not take any steps to pay a part of the such colossal dues inspite of repeated request and demands made by the opposite party No.1. It is alleged that on or about 31st July, 1990 the opposite party No.1 filed an Execution proceeding before the Hon'ble High Court to execute the consent decree past in July, 1979, and modified in the year 1984, by Memorandum of Settlement. The said execution petition was disposed of by an order of the Hon'ble High Court appointing a receiver for sale of the hypothecated plants and machineries and mortgaged land in the factory of the said company. It is alleged that after the receiver having taken over charge of the factories of this company inspected and made an inventory thereof. The petitioner/complainant herein filed an appeal before the Division Bench in Calcutta High Court against the said order of the Single Bench and the said appeal is still pending. It is contended that the dues and outstanding of the said company and also the petitioner/complainant on various loans accounts are day by day becoming colossal but due to pending execution proceeding, the opposite party No.1 cannot presently realise the same until disposal of the execution proceeding and the amount of the disputed pay orders is included in the accounts of the execution proceeding. It is again alleged that the amounts of the said pay orders are not the personal properties or assets of the petitioner/complainant herein and the attempt by the petitioner to take the amounts of the said two pay orders is with ulterior motive and to defraud the bank as well as the other shareholders of the said company. It is denied by the opposite parties that the pay orders were not issued out of the funds put into the bank by the petitioner/ complainant but it is alleged that the said company enjoyed cash credit facility with the opposite party No.1 and requested the opposite party No.1 to issue two pay orders by creating the further debit balance in the said cash credit account and that when the opposite party No.1 issued the said two pay orders in the name of the petitioner it was so done by creating debit balance in the said cash credit account of the company. It is contended that issuance of the said two pay orders were understood to be issued in favour of the said company and in fact the said two pay orders were never handed over to the petitioner and the amounts of the said two pay orders still remains as security to the opposite party No.1 against the dues and outstanding in the cash credit account of the said company and the opposite party No.1 is entitled to appreciate the fresh value of the said two pay orders towards the satisfaction in part of the dues of the company in the cash credit account. It is contended that the two pay orders were issued in favour of the said company and if the two pay orders had been lost of the said company it should report the loss of the said two pay orders and should lodge a complaint and/or filed a letter of Idemnity Bond but the petitioner/complainant herein being the Managing Director of the said company cannot insist upon to issue the pay orders in his own name although the said pay orders were the property of the said company. It is contended as the opposite party No.1 has already filed an execution application in the Hon'ble High Court at Calcutta against the said company and others including petitioner to enforce the decree dated 17.7.1979 as modified by Memorandum of Settlement dated 21.1.1984 for realisation of his dues of Rs.62,000,00/- from the said company and the others including the petitioner and as the amounts of Rs.62,000,00/- reflect the dues and various loans account of the said company including open cash credit account which was debited while issuing the said two pay orders. The opposite party No.1 cannot part with its valuable securities of the said two pay orders particularly when the execution application has been filed by the opposite party No.1. It includes the debit balance in cash credit account which again includes amount of the said two pay orders. It is alleged that the petitioner has been trying exercise the various powers upon the opposite party No.2 to compel him to issue fresh pay orders in his name and /or to pay him the liquid cash thereof and with that end in view the petitioner filed a criminal proceeding before the Chief Metropolitan Magistrate, Calcutta being Case No. C/233 of 1991 against the opposite party No.1 under Sec.409 of Indian Penal Code and the said criminal proceeding was dismissed by the Learned Chief Metropolitan Magistrate inter alia observing that there is no dishonest misappropriation of the fund kept with the bank. It was further alleged that the Directors of the said company are divided between themselves broadly into two groups and the rival group of the said Mr. Nopany wrote a letter to the opposite party No.1 inter alia stating the misappropriation and mismanagement by the petitioner in the said company and also informed that a proceeding under Sections 397 and 398 of the Companies Act had been filed before the Hon'ble High Court and the same is still pending. It was denied and disputed by the opposite parties that the petitioner by his letter dated 1.2.1989 submitted the Indemnity Bond duly executed by himself and his security Smt. Lalita Devi Nopany or the same has been received under the banking rules informing about the loss the said two pay orders through his Banker Grindlays Bank, Maniktola Branch. The opposite parties also denied all material allegations made out in the petition of complaint and prayed for dismissal of the same with cost.

(3.) Lastly on the date of final hearing one Pradip Kumar Kajoria came forward before this Commission with an application for his addition as opposite parties in this proceeding inter alia on the ground that the petitioner and his wife Mrs. Lalita Devi Nopani are the Directors of M/s Paharimata Iron Works Private Ltd. and the petitioner/complainant seeking for addition as party is one of the shareholders of the company. He further alleged that the petitioner and his wife being the Directors of the said company are empowered to operates its bank account and as such they had misused the company's fund for their personal accounts and benefits. Accordingly he prayed for his addition as party for effective and complete adjudication of the dispute involved in the matter. JUDGMENT