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Judges : S.SANKARASUBBAN,R.BHASKARAN
Thomas & Co. - Appellant
Versus
The UCO Bank - Respondent
Case No : AS. No. 301 of 1997
Decided On : 04/01/2002
Advocates Appeared :
For the Petitioner: K.N. Narayana Pillai, S. Vidyasagar & T.K. Venugopalan, Advocates. For the Respondent: George Cherian, P.B. Krishnan, Advocates.
Constitution – Arts. 226 227 – Recovery of Debts Due to Banks and Financial Institutions Act, 1993 – Section 17 18 20 25 to 28 29 30 31 – Appeal against Order of Payment of Debt – This appeal is preferred against the judgment and decree in O.S. on the file of the Sub Court, – Plaintiff in the suit is the UCO Bank – Defendants are the appellants – The appellants submitted that the first condition in Annexure A1 has been complied with i.e., Rs. 3,00,000/- has been paid – So far as the balance amount is concerned, if some more time is given to the appellants, the amount can be given – Learned counsel for the respondent/Bank submitted that the appeal is not maintainable and hence, no relief can be granted in the appeal – According to the learned counsel for the respondent after the judgment was rendered, the Civil Courts and even the High Court had lost jurisdiction over the subject matter in view of the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 – The question that arises is whether the present appeal is maintainable before this Court – Held, Further, it is not an order passed by the Debt Recovery Tribunal or can it be said to be an order deemed to be passed by the Tribunal – The Tribunal was constituted only subsequently – In this context, it is pertinent to note that with regard to appeals which have been already filed against the judgments of the Civil Court, there is no provision for transferring of such appeals to the Appellate Tribunal similar to transfer of suits and proceedings stated in S. 31 of the Act – Thus, it is clear that the appeal lies only before this Court – The above decisions will show that unless in the subsequent enactment something is found, which takes away the right of the appeal, that right is preserved – Hence, Court reject the preliminary contention raised by the respondent – On merits of the case, Court went through the records of the case, Court don't find that any ground is made out by the appellant to reverse the findings of the trial court – The defendants were not able to prove that any loss was suffered by them on account of the disbursement of smaller amount or the disbursement of amount later in time –Hence, we don't find anything wrong in the judgment and decree of the court below – Taking into all these matters, while confirming the judgment and decree of the court below, court hold that if the appellants pay the amount mentioned in Annexure A1, viz., 9 lakhs or balance as on today in six equal monthly instalments starting from 1.6.2002 along with interest at 12.5% per annum, the decree shall be deemed to be complied with– If payment of any two consecutive instalments is defaulted, the decree holder will be entitled to realise the entire amount– Annexure A1 shall be enclosed along with the decree–Appeal is disposed of as above– Appeal Disposed
Sankarasubban, J.
This appeal is preferred against the judgment and decree in O.S. No. 565 of 1993 on the file of the Sub Court, Ernakulam. Plaintiff in the suit is the UCO Bank. Defendants are the appellants. First defendant is the Firm engaged in marine products. Defendants 2 and 3 are partners of the Firm and defendants 4 and 5 are guarantors of the loan. The loan was granted for the purpose of constructing two mechanised fishing boats. The loan was granted after executing the loan agreement, hypothecation deed, guarantee agreement and memorandum of title deeds evidencing creation of equitable mortgage of A schedule properties belonging to defendants 2 and 5 onwards. The boats and accessories described in the B schedule were also hypothecated to the plaintiff Bank as collateral security. As per the loan agreement, defendants had agreed to repay the loan in 60 equal monthly instalments at the rate of Rs. 10,834/- for each boat commencing from February, 1991. Defendants further agreed to pay interest at the rate of 2.5% per annum over the R.B.I. rate with minimum of 12.5% with quarterly rests at such rates as may be notified to borrower from time to time in the event of such default till payment and to pay 2% penal interest in case of default in the payment of any one instalment. The defendants further agreed to pay guarantee fee calculated at the rate of 1.5% per annum on the outstanding amount every year. On the above terms, the defendants availed of the loan. The defendants committed default in remitting the monthly instalments. Despite the repeated requests, defendants did not clear the liability. Hence, the suit was filed for the balance amount payable under the loan.
2. Defendants filed a joint written statement. The loan transaction was admitted. According to the defendants, the loan was applied under the refinance scheme of NABARD for agricultural loans. As against the loan application of Rs. 37.05 lakhs for the construction of 4 mechanized boats, the plaintiff sanctioned only Rs.13 lakhs for 2 boats and out of the sanctioned loan amount of Rs. 13 lakhs, plaintiff disbursed only Rs. 6,43,196.98 for the first boat and Rs. 3,20,532/- for the second boat. Contrary to the agreement, the plaintiff delayed payment of loan amount for the construction of the second boat. The balance amount was not disbursed despite repeated requests, thereby defendants were considerably prejudiced. Several communications were sent to the plaintiff in this regard. But they did not respond. In the meanwhile, material and labour costs shot up considerably beyond the estimated limit. So, the defendants were constrained to raise funds from other sources by paying heavy interest and thus defendants suffered huge loss. It was further stated that the interest charged is high. The plaintiff is not entitled to charge penal interest. The defendants had repaid an amount of Rs. 44,300/-.
3. On the basis of the above pleadings, relevant issues were raised. So far as the loss suffered by the defendants on account of the non disbursement of the entire amount, as stated by the defendants, the court below took the view that there was no evidence. Further, there was no counter claim and hence the court below answered the issue against the defendants. Regarding the grant of interest, if found that interest at the rate of 12.5% is reasonable. It also found that the defendants are liable to pay guarantee fee, as per the agreement. Thus, the suit was decreed for recovery of an amount of Rs. 14,85,692.63 with future interest at the rate of 12.5% per annum from the date of suit till realization and cost of the suit by the sale of plaint A B schedule properties and from the defendants.
4. The suit was decreed on 12.4.1996. The present appeal was filed on 9.4.1997. Various contentions have been taken in the appeal, during the pendency of the appeal, the appellants filed C.M.P. No. 668 of 2002. Along with the C.M.P. , Annexure A1 was letter was produced. It is d
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