J.B.PARDIWALA

1. As common questions of fact and law are involved in both the above captioned appeals, the same are heard together and are being disposed of by this common judgment and order.

2. These appeals arise from a common judgment and order dated 21.01.2010 passed by the learned Single Judge in Special Civil Application No.1300 of 2004 with Special Civil Application No.1301 of 2004 whereby, the learned Single Judge quashed and set aside the order passed by the learned Board of Nominees and the order passed by the Tribunal confirming the order passed by the learned Board of Nominees including the modification made by the Tribunal in the order passed by the learned Board of Nominees and further restoring the Lavad Suits preferred by the appellants herein to the Board of Nominees. The learned Single Judge also directed the learned Board of Nominees to re-examine the matter in light of the observations made by the learned Single Judge in his judgment and order dated 21.01.2010 and directed the Board of Nominees to decide such suits after givingopportunity of hearing to both the sides.

3. Facts relevant for the purpose of deciding the appeals can be summarised as under:-

3.1. The appellants are distinct business legal entities and enterprises of Jayraj Group of Companies, being either a partnership firm or a Private Limited Company engaged in different activities such as buildingconstruction etc. The appellant Nos.8.1 to 8.2 are the partners/directors of the respective appellantpartnership firms or Private Limited Company. The appellants are the original respondents and the respondent-bank is the original petitioner of the two Special Civil Application Nos.1300 of 2004 and 1301 of 2004.

3.2. It appears that in the year 1997-98, Jayraj Group of Company availed of loan facility to the tune of Rs.12.46 crores from respondent No.1-Charotar Nagrik Sahakari Bank Limited. It appears that on or around 30.06.2001, the respondent-bank unilaterally adjusted the accounts of Jayraj Group by transfer entries showing release of Rs.17.48 crores and adjusting these monies towards repayment of the old outstandings, thereby closing the old accounts and simultaneously creating new accounts/outstandings. It appears that the case of the appellants is that no additional funds, apart from the original amount of Rs.12.46 crores, was disbursed to the Jayraj Group and the additional amounts were book-entries.

3.3. It also appears that the Reserve Bank of India issued directions under Section 35A of the BankingRegulation Act, 1949 on 20.12.2001 and an Administrator came to be appointed for the Bank on 01.01.2002.

3.4. The appellants preferred two Lavad Suits being Lavad Suit No.1268 of 2002 and Lavad Suit No.1269 of 2002. It is necessary to state here at this stage that Letters Patent Appeal No.1608 of 2010 arises from the proceedings of Lavad Suit No.1268 of 2002 and Letters Patent Appeal No.1298 of 2010 arises from the proceedings of Lavad Suit No.1269 of 2002. The record reveals that the appellants, in substance, sought inter alia, the following prayers in the Lavad Suits referred to above:-

“(i) Direct that the Bank has been charging interest contrary to the Reserve Bank of India guidelines in this behalf;

(ii) Direct that the action of the Bank in adjusting the repayment by the Jayraj Group towards interest, instead of against the principal, is illegal;

(iii) Direct the refusal by the Bank to dispose of the property available with it a security or the refusal to permit the Jayraj Group to sell such property has caused monitory loss to the Jayraj Group;

(iv) The bank should calculate 12% simple interest rather than 25%;

(v) As the Bank has failed to act upon the request of the Jayraj Group to sell all the secured property for repayment of the loans, since January 2002, the Bank should not charge interest from January, 2002.

(vi) Hold the Bank responsible for the erosion in the value of the secured property, for the failure of the Bank to