Central Bank Of India vs M/s Angelic Infracon Pvt. Ltd. & Ors.

Heard the learned counsels for the parties on merits of the case.

Learned counsel for the appellant-Bank submits that the respondent No. 1 was granted various credit facilities by the appellant-bank, which was secured by hypothecation of assets, liquid security as well as collateral securities. It was further contended that there are three firms, of which respondents are directors and guarantors and they availed credit facilities in the name of (i) M/s Angelic Infracon Pvt. Ltd., (ii) M/s Angelic Infrastructure Systems and (iii) M/s Awadh Transformers' Pvt. Ltd. It was further contended that in order to take the work orders by M/s Angelic Infrastructure System, certain FDRs were issued by the Bank in its name and the same were deposited as security money with the UP Awas Vikas Parishad, Ghaziabad. It was further contended that the total outstanding amount against all three loan accounts is more than Rs. 22.55 crores. It was further contended that the borrower-company through its directors had informed that the said FDRs have been forfeited by the UP Awas Vikas Parishad due to delay in completion of project. It was also contended that with the said concealment, the borrowers approached the Bank for settlement and the same was compromised for a sum of Rs. 86.50 lacs vide sanction letter dated 14.06.2017 and the same was deposited accordingly with the Bank and after receipt of the same, the Bank withdrew the O.A. No. 482/2017 vide order dated 10.08.2018 of the Tribunal below.

Learned counsel further submitted that after coming to know that the said FDRs were not forfeited, then the Bank issued show cause to the respondents as to why the entire amount due as per contractual rate of interest is not recovered by recalling the said compromise. It was further contended that the Bank had already filed Original Applications against other two companies, in which the respondents are directors and guarantors and they are liable to pay the dues, therefore, no FDRs or sale deed can be released in favour of the respondents, unless the entire amount due is paid. It was also contended that pursuant to the order passed by the Hon'ble High Court dated 19.02.2018, the respondents filed an application before the Tribunal below, which has been allowed by the Tribunal below vide order impugned without considering the fact that the appellant-Bank has right to apply for general lien on any assets of the borrower to recover the dues of other companies of the borrower, thus the order impugned is not sustainable in the eye of law. It was, therefore, prayed that the same may be set-aside and appeal may be allowed.

Learned counsel for the respondents-borrowers submits that during the pendency of the aforesaid O.A., the respondents submitted an OTS proposal for a sum of Rs. 86.50 lacs to settle the account, which was accepted and deposited by the borrowers with the Bank. It was further contended that as such no amount is due and recoverable from the respondents on account of their liability. It was also contended that the accounts were closed as per the OTS acceptance letter dated 14.06.2017. It was further contended that despite the said settlement, the appellant-bank has neither returned the fixed deposits receipts nor the sale deeds of the property mortgaged in the present loan account, therefore, it was contended that the Tribunal below vide order impugned has rightly directed the Bank to return the same. It was thus prayed that the appeal filed by the Bank may be dismissed with heavy costs.

Having heard the learned counsels for the parties and considering the material available on record, undisputedly an original application No. 482/2017 was filed by the appellant-Bank against the respondents for recovery of its dues and the said case was settled between the parties for a sum of Rs. 86.50 lacs vide sanctioned letter dated 14.06.2017, which was paid by the respondents-borrowers accordingly, as admitted by the Bank in Para 5.10 of the memo of the appeal. It is also not disputed that the appellant-Bank had withdrawn its O.A. No. 482/2017 on 10.08.2018, which is also admitted by the Bank in the said para.

The sole ground taken by the Bank for not returning the FDRs as well as the sale deed of the property involved in the present case that the same cannot be returned due to recovery of other two companies of the respondents-borrowers is not acceptable, because the entity of these two other companies of borrowers is separate and distinct and they were granted the loans on different dates and times. It is also not the case of the appellant that the said securities involved in the present case are collateral security in the loan accounts of the said companies as stated by the Bank. If the borrowers have liquidated its all liability of the present case and the Bank itself has withdrawn its original application, the Bank has no right to retain the security of the present case for recovery of the dues of the other companies, in which the said assets are not security. As such the Tribunal below vide order impugned has rightly directed the Bank to return the FDRs as well as the sale deed of the property lying with it in the present case.

In view of the above, there is no infirmity or illegality in the order impugned, hence the same does not call for any interference by this Tribunal. Consequently, the appeal filed by the appellant-Bank is dismissed with no order as to costs.

A copy of this order be forwarded to the parties as well as the DRT concerned and be also uploaded on e-DRT portal.