JUDGMENT - SAMPAT H.T., J.:---This is a Transferred Application for recovery of Rs. 94,49,357.08 (Rupees Ninety Four Lakhs Forty Nine Thousand Three Hundred Fifty Seven and Paise Eight only).

2. The applicant is constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The defendant No. 1 is a company incorporated under the Companies Act, 1956. The defendant Nos. 2 3 are sued in the capacity of Guarantors.

3. The defendant No. 3 died during the pendency of the proceedings. Her legal heirs were not brought on record. Therefore, vide an order dated 14-12-2001, the Original Application as against the deceased defendant No. 3 stands abated.

4. It is the case of the applicants that they had granted various credit facilities to the defendant No. 1, such as Cash Credit-cum-Export Packing Facility, Letters of Credit, Inland Bill Purchase, Term Loans etc. The defendant No. 1 company had mortgaged immovable properties described in Exhs. "A" "B" and had hypothecated plan and machinery, raw materials, stocks and goods as also book debts as described in Exhs. "C", "D" "E" in addition to executing other usual documents such as Demand Promissory Notes, Letters of Continuing Security, Letters of Lien and Off Set etc. The defendant Nos. 2 3 in their personal and individual capacities executed a Deed of Continuing Guarantee.

5. After having availed the facilities, the defendants are said to have failed in maintaining the accounts regularly and to repay the outstanding amounts. It is contended that they had, however, meanwhile executed Letters of Acknowledgement from time to time, but failed to repay the amounts.

6. A recall Notice was ultimately issued on 26-9-1990 and all the defendants were called upon to make good the amounts mentioned therein, but to no avail. On the date of filing of the suit in the High Court, a sum of Rs. 54,23,271.94 was said to be outstanding in respect of Cash Credit-cum-Export Packing Credit Facility; a sum of Rs. 4,35,741.20 was said to be outstanding in respect of Term Loan Account-I; a sum of Rs. 17,91,499.45 was said to be outstanding in respect of Term Loan Account-II; a sum of Rs. 11,63,701.29 was said to be outstanding in respect of Letters of Credit, a sum of Rs. 2,47,375.17 was said to be outstanding in respect of Inland Bills Purchase/Discount Account; and a sum of Rs. 2,87,768.03 was said to be outstanding in respect of ad hoc Cash Credit. All these amounts are claimed with future interest at the rates of 18.5, 17, 17, 19.5, 18.5 and 18.5% respectively and the securities are also sought to be enforced.

7. The defendant Nos. 1 2 have filed their Written Statement at Exh. 6. At the outset, it is stated that as the original application as against the defendant No. 3 has abated, the original application cannot proceed against the defendant Nos. 1 2 and on this count alone, the application is liable to be dismissed.

8. It is denied that the defendant Nos. 2 3 has executed a Deed of Continuing Guarantee, and without prejudice to this contention, it is stated that the claim against the defendant Nos. 2 3 in any case has become time barred.

9. The defendants have denied that the amounts as claimed by the applicants were and are due and payable.

10. The defendants have also denied to have executed documents of mortgage and hypothecation as also various other documents including the Letters of Acknowledgement.

11. An affidavit in support of the applicant's claim is filed at Exh. 9. The details of the various facilities granted to the defendants and the documents executed by them from time to time are deposed therein. All the original documents executed by the defendants including documents relating to equitable mortgage, letters of acknowledgement of debt, hypothecation deed, demand promissory notes and deeds of guarantee executed by the defendants are produced at Exhs. 15 to 64. The Statement of Accounts in respect of Term Loan Account-I is at Exh. 68; the Term Loan Account

Click Here to Read the rest of this document