IMPORTANT POINT
It is discretion of Court to award pendente lite and future interest which has to be exercised fairly.

J.M. Malik, Chairperson—The instant appeal has been referred by State Bank of India, the appellant in this case. The learned Presiding Officer, DRT vide his order dated 1.7.1999 dismissed the suit/original application filed by the appellant wherein a sum of Rs. 6,74,69,502.55p was claimed. The learned Tribunal dismissed the original application on two counts. Firstly, the O.A. was barred by limitation and secondly Shri D.D. Aggarwal, (since deceased), the managing director of the respondent company signed loan and security documents in favour of the Bank without having any authority and in violation of Section 317 of the Companies Act, 1956.

2. The loan facility was given to the respondents w.e.f. 28.1.1982. Shri D.D. Aggarwal created an equitable mortgage of his property bearing 6, Benarsi Dass Estate, Timarpur, Delhi being residential house measuring 778 sq. yards with the super structure as security for repayment of the outstanding dues to the appellant on 23.4.1991. Shri D.D. Aggarwal mortgaged the properly of

M/s. More Water Pipes Ltd. the Company, respondent No. 1 i.e. A-68, Industrial Area, Sikandrabad (U.P .) in favour of the appellant as per resolution of the Board of Directors dated 26.6.1991. Respondent No.1 acknowledged the dues outstanding to the appellant on 31.3.1992. As the outstanding in cash credit account amounted to Rs. 5,16,50,000 on 8.2.1993 with interest upto 30.9.1992, late Shri D.D. Aggarwal acknowledged the outstanding and to further, secure them executed a fresh Deed of Hypothecation in respect of the entire tangible movable property and assets of respondent No.1.

3. Prior to that, respondent No. 1 filed a reference under Section 15(1) of Sick Industrial Company (Special Provisions) Act, 1985 before the Board of Industrial and Financial Reconstruction (BIFR) which was registered as case No. 130/91. On 31.5.1993 to enable respondent No.1 to recover its business after having acknowledged all the dues of the appellant in its balance sheet of 1991-92, BIFR suspended the enforcement of all contracts against respondent No. 1 initially for six months effective from 11.6.1993 which was further extended on 8.12.1993. On 21.4.1994 BIR came to the conclusion that it would be just and equitable that respondent No. 1 should be wound up and forwarded its opinion to the Allahabad High Court vide letter dated 24.8.2009 for further action in accordance with law. In the meantime, Shri D.D. Aggarwal expired on 21.7.1993. The amount in dispute was claimed by the appellant by filing a civil suit before the Delhi High Court on 21.4.1994. Respondent No.1 was wound up by the Hon’ble Allahabad High Court on the recommendation of BIFR on 13.7.1994. The suit filed by the appellant was contested by LRs of Shri D.D. Aggarwal. This was admitted that respondent No. 1 is liable to pay all the amounts availed of during the life time of late Shri D.D. Aggarwa1. Official Liquidator attached to the Hon’ble Allahabad High Court paid the pro-rata share to the appellant as secured creditor of Rs. 42,30,844.16 vide cheque dated 30.6.1999.

4. I have heard the Counsel for the parties and perused the written synopsis submitted by them.

5. The learned Counsel for the respondent vehemently argued that this case is hopelessly barred by time. It was explained that the appellant Bank for bringing its case within limitation has relied upon several Board resolutions of the respondent company dated 31.12.1983, 20.9.1988, 24.3.1990, 26.6.1991, 21.1.1988 out of which the resolution dated 24.3.1990 and 26.6.1991 relied upon by the Bank are not even signed. Again neither any notice of any Board meeting as is mandatory under Section 286 of the Companies Act was ever issued nor any lawful Board meeting was convened after the year 1985. It was argued that there cannot be any lawful Board resolution after the year 1985 and contrary to the same the appellant Bank has failed to prove any of the said Board resolutions. Moreover, Shri D.D. Aggarwal was