Calcutta High Court
Punjab National Bank vs Commissioner, Sanchaita Investments ... on 4 May, 2000
Equivalent citations: [2002]112COMPCAS80(CAL)
JUDGMENT V.K. Gupta, J.
1. This appeal is directed against the order dated January 20, 1990, passed by the learned Commissioner, Sanchaita Investments, Calcutta, in the claim case filed by and on behalf of the Punjab National Bank against Sanchaita Investments. The brief facts leading to the filing of the appeal are that the appellant-Punjab National Bank filed a claim petition before the learned Commissioner for Sanchaita Investments (hereinafter to be called as "the Commissioner") with respect to the demand of the appellant-bank for a sum of Rs. 26,50,000. It appears that Sanchaita Investments (hereinafter to be called "the company") under an agreement dated May 11, 1981, agreed to purchase the 5th floor of a multi-storeyed building at No. 113, Park Street, Calcutta, along with car parking spaces for a consideration of Rs. 28,71,000 from one M/s. Anandi Lal Poddar and Sons Limited. The said transaction was completed after the aforesaid amount is stated to have been paid by the company to the aforesaid Anandi Lal Poddar and Sons Ltd. It is also stated that the possession of the property in question was taken over by the company in due course.
2. The company at the relevant time was operating a bank account, being Current Account No. 811 with the Dharamtalla Branch of the appellant-bank. The company approached the appellant-bank on February 2, 1982, for granting to itself the overdraft facility to the extent of Rs. 39,00,000 in the said current account. The appellant-bank agreed to the grant of the aforementioned overdraft facility to the company against the security of the right, title and interests of the company in the aforesaid property, which had accrued in its favour by virtue of the aforesaid agreement dated May 11, 1981. It is the admitted case of the parties that on the company availing of the aforesaid overdraft facility, the appellant did pay to the company a sum of Rs. 26,50,000 through the aforesaid current account and that the company promised to liquidate the said debt within a period of 30 days from the date of granting of the overdraft facility.
3. Because of the non-repayment of the aforesaid amount the appellant-bank initiated legal proceedings against the company. Various proceedings went on between the appellant-bank and the company, both in this court as well as before the Supreme Court. The appellant's claim in respect of the property in question was negatived by a Division Bench of this court vide its judgment dated December 20, 1984, in Matter No. 698 of 1984 wherein this court was of the view that the company was not divested of its right, title and interest arising out of the sale deed dated May 11, 1981, or the benefits accruing thereunder and, therefore, the appellant-bank was not entitled to raise any claim in respect of the aforesaid property. The main thrust was on the non-registration of the agreement which had been executed between the company and the appellant. The Division Bench was of the view that since the agreement was not registered, no right flowed in favour of the appellant in relation to the aforesaid property. The operative part of the judgment read thus :
"For the reasons aforesaid, we are of the view that Sanchaita Investments was not divested of their right, title and interest arising out of the contract of sale dated May 11, 1981, or the benefit thereunder by any effective assignment thereof in favour of the objector bank. Hence, the objection raised by the bank to the attachment made by the Commissioner is clearly untenable. The objection preferred by the bank and forwarded to this court by the Commissioner as also the application of the petitioner-bank to this court incorporating the said objections are disposed of on the above terms. There will be no order as to costs."
4. The appellant's special leave petition against the aforesaid judgment filed before the Supreme Court was dismissed by their Lordships of the Supreme Court on November 25, 1985. While dismissing the aforesaid SLP, being SLP (Civil) No. 1012 of 1985 their Lordships ordered as under :
"Applications for intervention and adding party are allowed.
We do not think that this is a fit case for interference under Article 136 of the Constitution. We do not affirm or disaffirm the view taken by the Calcutta High Court on the question of law. Special leave petition is dismissed."
5. Having failed to obtain any relief through this court or through the Supreme Court with respect to the appellant's claim qua the property in question the appellant wanted to assert its claim only in respect of the money advanced to the company and to obtain appropriate relief and with that in view, the appellant obtained an order from their Lordships of the Supreme Court in Civil Miscellaneous Petition No. 46669 of 1985 and 11460 in W. P. No. 638 and 757-800 of 1983 of May 7, 1986, whereby the Supreme court permitted the appellant to lodge its claim before the Commissioner within one week and the Commissioner was directed to consider the said claim on its merits if the same was preferred within this period. The order dated May 7, 1986, passed by the Supreme Court reads thus :
"The petitioners may lodge their claim before the Commissioner within one week. If the claim is preferred within a week the Commissioner shall consider the claim on merits. No amount shall be disbursed for about a week. Whether it should be disbursed further or not is within the discretion of the Commissioner subject to any direction given by the High Court. The time to prefer the claim is extended by one week from today.
C. M. P. No. 4666 of 1985 : It is open to the petitioner to approach the Commissioner for appropriate directions. The Commissioner shall consider the scheme if preferred within one week. This application is disposed of."
6. It is under the aforesaid circumstances that the Commissioner, after taking cognizance of the claim preferred by the appellant, has rejected the same ; hence the present appeal.
7. A very short point arises for our consideration in this appeal. The point is, whether despite having clearly found that the appellant had lent to the company an amount of Rs. 26,50,000 by way of overdraft facility, was the Commissioner justified in rejecting the claim of the appellant on the ground that the grant of the overdraft facility by the appellant was preceded, actuated and based upon some acts of omission and commission wrongly and illegally done by the officers of the bank, prompted by ulterior motives and mala fide considerations. To answer this question we have to look to the order under appeal and find out as to whether the Commissioner was correct or not correct in his appreciation of the factual aspects of the matter relating to the advancement of the loan and the question of entitlement or disentitlement of the appellant in asking for the repayment of this amount.
8. The following observations of the Commissioner in the order under appeal do suggest that the Commissioner himself was firmly of the view that the amount in question had been advanced by the appellant to the company :
"The said firm at the material time had a current account, being current account No. 811, with the Dharamtala branch of the said bank. The said firm on February 2, 1982, approached the said bank for granting overdraft facility to them to the extent of Rs. 39,00,000 in the said current account, and the said bank at once agreed to the said proposal against security of the right, title and interest of the said firm in the said property that had accrued in its favour by and under the said agreement dated May 11, 1981. Accordingly, the said bank lent and advanced, at the request of the said firm made by their letter dated February 2, 1982, a sum of Rs. 26,50,000 through the said current account of the said firm, by way of overdraft facility. The said firm promised to liquidate the said debt within a period of 30 days from the date of granting the said overdraft facility."
9. Further, the Commissioner went on to observe as under :
"A sum of Rs. 26,95,000 was paid by the said firm to the said M/s. Anandilal Poddar and Sons Ltd. being the consideration for the said property. The said payment was made under agreement dated May 11, 1981, executed by and between the said Anandilal Poddar and Sons Ltd. on the one hand and the said firm on the other. On or about February 1, 1982, a current account, being No. 811 was opened in the name of the said firm with the Dharamtala branch of the said bank. On February 2, 1982, the said firm was alleged to have written a letter to the said branch of the said bank requesting them to grant to the said firm an overdraft facility to the extent of Rs. 39,00,000 in their said current account. Pursuant to the said letter of request, and prior to the execution of any agreement whatsoever and without obtaining proper security, the said overdraft facility was alleged to have been granted at once in favour of the said firm through the said current account, to the extent of Rs. 26,50,000."
10. Having thus held and found that the bank had actually advanced a sum of Rs. 26,50,000 to the company, the Commissioner declined to grant any relief to the bank and rejected the bank's claim on the ground that the bank had not acted properly in advancing the loan and that the entire alleged transaction was a sham transaction, based on fraudulent and collusive considerations. The Commissioner was influenced by the fact that offices of the company were raided and sealed by the police on December 13, 1980, and all its registers, books of account and papers were seized by the police and everyone had come to know about this and yet, despite the aforesaid nefarious and dubious activities of the company, the bank being totally oblivious, advanced the loan. Actually the Commissioner has identified one A. B. Das and the members of his family being instrumental in the perpetration of the aforesaid fraud on the bank, since A. B. Das was the manager of the bank at the relevant time. Ultimately, the Commissioner made the following observations :
"I have carefully considered the materials on record and the facts and circumstances of this case, and I am satisfied beyond doubt that the entire story sought to be made out on behalf of the said bank, beginning from the alleged advancement of Rs. 26.50 lakhs by way of overdraft facility to the said firm and ending in the alleged execution of the deed of assignment dated July 31, 1982, is a myth, pure and simple, and cannot be accepted. So, the claim of the said bank for money simplicitor against the said firm falls to the ground."
11. We have no doubt whatsoever that the Commissioner was totally wrong in terming the claim of the appellant as "a myth, pure and simple". We are also in total disagreement with the approach adopted by the Commissioner when he says that the bank made out a story for the advancement of the loan. The facts point otherwise. Actually the Commissioner himself has observed and held that the amount of Rs. 26,50,000 was actually advanced by the bank to the company. Merely because the overdraft facility was granted by the bank because some officers of the bank in connivance with others had played fraud with the bank in extending overdraft facility to the company, when the nefarious and dubious activities of the company were already known to the public cannot be a ground for rejecting the claim of the bank in toto.
12. From what we have seen, and on an overall consideration of the relevant facts and circumstances, we are firmly of the view that the bank having established beyond any doubt (this actually is an admitted fact) that the bank had advanced the aforesaid amount to the company and that the company had received this amount from the bank through the aforesaid facility of the grant of overdraft, there is no reason whatsoever why the bank should be deprived of its claim for the return of the said money. The bank undoubtedly is the guarantor of the company and once the bank's claim is established, denying to the bank the repayment of the amount will be unjustifiable.
13. This brings us to the question of payment of interest to the bank on the aforesaid amount. Even though the bank has claimed interest for the aforesaid principal amount, we are of the opinion that in the facts and circumstances of this case the bank's claim for payment of interest on the principal amount does not deserve to be allowed, particularly since the bank itself was very negligent and careless, albeit through its officers in granting the aforesaid overdraft facility.
14. For the foregoing reasons we allow the appeal, set aside the order of the learned Commissioner and direct him to pay to the bank the principal amount of Rs. 26,50,000 from out of the amounts lying with him within a period of three months from today. Since we are told that the Commissioner has with him at present amounts lying in excess of Rs. 26,50,000, we see no difficulty in the Commissioner arranging to pay the aforesaid amount to the bank within the aforesaid period. We, therefore, direct that until the Commissioner pays this amount to the bank, he shall not use the amount lying with him for any other purpose except to meet the routine administrative expenditure and routine administrative costs. If the amount is not paid within a period of three months from today, the Commissioner shall be liable to pay to the bank interest on the aforesaid principal amount of Rs. 26,50,000 at 12 per cent. per annum. The interest liability shall in that event start accruing from today itself and shall go on till the amount is actually paid.
15. No order as to costs.
Malay Kumar Basu, J.
16. I agree.