Navnit Cars Pvt. Ltd vs State Bank of India & Anr

Ashok Menon, Chairperson

These three Misc. Appeals arise from a common order dated 06.07.2019 of the Debts Recovery Tribunal, Nagpur (D.R.T.) in Interlocutory Application (I.A.) No. 63 of 2017 in Original Application (O.A.) No. 566 of 2016, I.A. No. 110 of 2017 in O.A. No. 565 of 2016, and I.A. No. 78 of 2017 in O.A. No. 584 of 2016, all applications filed by the appellant for deleting it from the party array as defendant No. 3 in the O.As. The D.R.T. declined to grant the prayer stating that the specific allegation made by the applicant in the O.As. is that the third defendant had in collusion with the rest of the defendants borrowed money to propose the purchase of cars of a particular model but purchased a lesser model for a lesser price thereby appropriated the money which was lend by the bank for the higher version of the car.

The Ld. Presiding Officer, D.R.T. has in the impugned order observed that it is not possible to determine whether the appellant was involved in the alleged act of fraudulently inducing the bank to lend money for purchasing a higher version of the car with the rest of the defendants and therefore, evidence in that regard will have to be adduced by the applicant bank to establish the liability of the third defendant in the O.As and in case it is found that the third defendant is not involved in the collusive act of purchasing the car after obtaining a loan from the bank, they would stand exonerated and they would also be entitled to costs/exemplary costs and other remedies available to them under the law. Hence, the prayer for deletion of the third defendant from the party array in these O.As. was declined.

The Ld. Counsel appearing for the appellant would contend that at the very threshold, it would be clear that the appellant was only a car dealer is not involved directly in getting the loan to purchase the car, and that the loan was disbursed to the rest of the defendants and not to the appellant directly. The rest of the defendants who had borrowed the money from the bank had first obtained a quotation from the appellant for the purchase of a Skoda Octavia car having a value of ₹21.14 lakhs and also paid ₹17 lakhs as advance. On second thought, they requested and were supplied a lesser model of a Skoda Rapid and from out of the amount of ₹17 lakhs which was paid by them earlier, a sum of ₹6.19 lakhs was refunded to them on proper acknowledgment. Hence, it cannot be said that the appellant was in any way engaged in borrowing the money from the bank in a fraudulent transaction.

However, on hearing the Ld. Counsel appearing for the appellant at length, I find that this is an issue which has to be decided by the D.R.T. based on the evidence that is adduced by the bank. Without going into evidence, it may be not possible to exonerate the appellant from the party array. I do not therefore find any error in the impugned common order. The Misc. Appeals are, therefore, disposed of with the direction to the D.R.T. to consider the issue regarding the involvement of the third defendant in the O.As as a preliminary issue and thereafter proceed with the determination of the rest of the issues involved in the O.As. Given the finding in this order, liberty is granted to the appellant to raise their pleadings concerning the contention raised in the O.As.

The Misc. Appeals are disposed of as above.