Debt Recovery Appellate Tribunal - Allahabad
Hyper Chemicals And Cosmetics P. Ltd. ... vs State Bank Of Patiala on 24 March, 2004
Equivalent citations: IV(2005)BC177
ORDER
K.S. Kumaran, J. (Chairperson)
1. The respondent-State Bank of Patiala (hereinafter referred to as "respondent-bank") filed a civil suit against defendants Nos. 1 to 4 (appellants herein, hereinafter referred to as "appellants-defendants"), before the Civil Judge, Senior Division, Kanpur, for the recovery of Rs. 13,89,436 with interest and costs. The said civil suit was ultimately transferred to the Debt Recovery Tribunal, Allahabad (hereinafter referred to as "DRT"). The learned Presiding Officer of the DRT passed the impugned final order dated February 18, 2003, directing the issue of the recovery certificate for the above said amount with interest at 20 per cent. per annum with quarterly rests from the date of application till recovery. He also directed that the amount can be recovered from the sale of the hypothecated stocks, if they exist, and the mortgaged property. He further directed that if there was any balance, that can be recovered from the other properties of the appellants-defendants.
2. Aggrieved, the appellants-defendants have preferred this appeal. The respondent-bank has filed a suitable reply opposing the appeal.
3. I have heard counsel for both the sides and perused the records.
4. The case of the respondent-bank in the original application is as follows :
The first defendant is a private limited company of which defendants Nos. 2 and 3 are directors.
5. On the request of the first defendant through its directors and on the guarantee of defendants Nos. 3 and 4, the respondent-bank sanctioned a loan of Rs. 9 lakhs on February 19, 1992, by way of cash credit hypothecation limit for manufacturing chemicals and cosmetics, on the terms and conditions contained in the letter of arrangement dated February 19, 1992. The interest was agreed at 75 per cent. above State Bank of India advance rate with a minimum of 20 per cent. per annum, with quarterly rests.
6. In consideration of the grant of the said facility, the following documents were executed on February 19, 1992 :
(i) Demand promissory note executed by the first defendant under the signature of the second defendant.
(ii) Letter of arrangement, containing the terms and conditions and accepted by defendants Nos. 1, 3 and 4.
(iii) Agreement for cash credit limit (form I) executed by the first defendant under the signature of the second defendant, being the director.
(iv) Agreement for cash credit limit (form K), executed by the first defendant under the signature of the second defendant, being the director.
(v) Demand promissory note delivery letter by all the defendants,
(vi) Free access letter signed by the second defendant as director of the first defendant.
7. To further secure the repayment of the credit facility, the second defendant deposited his title deed, i.e., the sale deed dated June 21, 1917, in respect of his property, with an intent to create equitable mortgage to the extent of his half share in favour of the plaintiff as collateral security. He confirmed the creation of such equitable mortgage through his registered letter dated February 15, 1992, addressed to the respondent-bank.
8. The account was opened with the respondent-bank by the second defendant in the name of the first defendant wherein debit and credit entries have been made regularly. The first defendant, under "the signature of the second defendant being the director, acknowledged and confirmed the balance due to the respondent-bank on April 6, 1993.
9. Rs. 6,47,571 towards the principal, and Rs. 7,41,865 towards the interest, i.e., a total of Rs. 13,89,436 is due to the respondent-bank, as the defendants defaulted to repay the amount to the bank.
10. The suit was presented before the Civil Judge, Senior Division, Kanpur on May 16, 1996.
11. The appellant-defendants filed a counter-claim dated June 5, 2002, alleging as follows :
Some financial assistance was taken from the respondent-bank against pledge and hypothecation of stocks, semi-finished and finished goods, raw materials and goods in process.
The signatures of the appellants-defendants were obtained on blank papers and blank forms, and as such there was no valid contract between the parties. The appellants-defendants, who were desirous of taking financial assistance, signed the blank papers and forms due to pressure from the respondent-bank, against pledge and hypothecation of stocks, etc. The defendants had given security of their stocks, etc., as above said for the financial assistance granted by the respondent-bank.
The appellants-defendants gave their project to the bank requesting financial assistance to the tune of Rs. 15 lakhs as working capital, but the bank neither granted the aforesaid required financial assistance nor refused it. The defendants could not approach any other financial institution. After a lot of time the bank granted some financial assistance and assured that the remaining financial assistance shall be granted shortly. But the remaining financial assistance was neither granted nor denied. The omissions and non-co-operation of the bank and the Uttar Pradesh Financial Corporation (hereinafter referred to as "UPFC") resulted in an acute crisis. The company was taken over under Section 29 of the UPFC Act and was sold away for a throw away price. At the time of the aforesaid seizure, the respondent-bank took over the entire unfixed assets, which were pledged and hypothecated with it. Neither the respondent-bank nor the UPFC took the appellants-defendants into confidence at any stage, nor was any inventory list prepared with regard to the huge stocks, raw materials, etc., mentioned above. At that stage, the hypothecated assets were of more value than the amount disbursed to the defendants. Any outstanding in the account of the defendants could have been adjusted, if just decision had been taken in time by the bank. The respondent-bank has filed the suit without accounting for the primary securities, which were pledged and hypothecated with them. The defendants are entitled to get adjustment on account of their pledged and hypothecated stocks, etc. The defendants had submitted the stock balance of raw materials pledged and hypothecated with the bank, as on May 25, 1992, amounting to Rs. 8,75,603.75.
The defendants lastly operated their C/C account on June 4, 1992, and hence the suit is barred by time.
The entire family of the defendants shifted to Delhi in January, 1993. Therefore, there was no occasion for any acknowledgment or balance confirmation on April 6, 1993, and April 6, 1994. The defendants never acknowledged any balance confirmation.
The respondent-bank is not entitled to charge any interest or penal interest or interest upon interest or other charges.
Therefore, the defendant-company is entitled to :
(a) be compensated to the tune of Rs. 8,75,603.75 with interest from the bank towards the pledged and hypothecated stocks, raw materials in the sole custody of the bank ;
(b) be compensated to the tune of Rs. 10 lakhs for the undue hardship caused, by not taking any decision or steps in time to dispose of the pledged hypothecated stocks, etc., lying with the bank.
(c) the application of the bank is liable to be dismissed.
12. The defendants also filed a claim for set-off on June 12, 2002, with similar averments as are found in the counter-claim.
13. The defendants filed a written statement dated June 12, 2002, containing the following averments, apart from the other similar averments contained in their counter-claim :
"No documents as mentioned in paragraphs 4(i) to 4(vi) of the plaint were executed. All papers and forms were signed in blank. The second defendant gave the title deed to the bank to show their financial worth. The property belongs to the Hindu undivided family and the question of the equitable mortgage does not arise. The property was never mortgaged with the bank. The second defendant neither acknowledged any balance confirmation on April 6, 1994, nor executed any document on the said date. The suit is barred by time. The second defendant, on behalf of the first defendant neither acknowledged nor confirmed the balance on April 6, 1993."
14. The respondent-bank filed the following reply to the counter-claim made by the appellants-defendants :
"The counter-claim has been filed without filing the written statement and is therefore not maintainable. The counter-claim cannot be decided along with the original application, as the same does not arise exclusively against the respondent-bank. In the counter-claim, there is claim by the defendants against UPFC, which is neither a plaintiff nor a defendant. On the same set of facts, the defendants have filed a claim for set-off along with the written statement.
The bank sanctioned and provided the financial assistance to the defendants after assessing the need. All the papers were signed by the defendants, after reading and understanding them, and they did not sign any blank paper. No assurance was given by the bank to the defendants as alleged. The defendants were granted a limit of Rs. 9 lakhs, and if they were unable to use the same, the bank is not responsible.
The stocks were not under the lock and key of the bank, but were in the sole custody of the first defendant. If the UPFC had done any act to the prejudice of the defendants, the bank is not liable. It is wrong to say that the bank took any asset. The stocks statement is false.
The defendants made necessary acknowledgment/revival of the loan. The interest has been charged as per agreement. The defendants are not entitled to any relief. The counter-claim cannot be decided along with original application, as it does not arise exclusively against the bank."
15. The respondent-bank also filed a separate reply to the set-off containing similar averments as are found in the reply to the counter-claim, apart from the following averments :
"The claim for set-off is not maintainable and cannot be decided with the original application, as the same is not for the ascertained sum of money legally recoverable from the bank. The said claim is also not made exclusively against the respondent-bank, and there are averments against the UPFC also, which is neither a plaintiff nor a defendant."
16. The learned Presiding Officer of the DRT has in the impugned final order framed the following issues :
(i) Whether the defendants are entitled to a set off of Rs. 8,75,603 on account of the loss of the semi-finished and finished goods belonging to the defendants as alleged by the defendants ?
(ii) Whether the said stocks were in the lock and key of the applicant-bank as alleged by the defendants ?
(iii) Whether the loss occasioned to the defendants due to the act of the applicant-bank ?
(iv) Whether the defendants are entitled to a sum of Rs. 10 lakhs as compensation from the applicant-bank ?
(v) Whether the claim of the applicant-bank is barred by time ?
(vi) To what relief, if any, the applicant-bank or the defendants are entitled to get from each others ?
17. The learned Presiding Officer of the DRT found that there is no evidence to show that the respondent-bank in any way caused any hindrance to the appellants-defendants in utilising the loan sanctioned to them ; that the stocks were in the possession of the appellants-defendants, but were not pledged with the respondent-bank ; that no loss has been occasioned to the appellants-defendants by any act of the respondent-bank ; and that the appellants-defendants are not entitled to recover either the sum of Rs. 8,75,603 or the compensation amount of Rs. 10 lakhs. He also found that the defendants executed the balance confirmation, and that the original application is not barred by time. So holding, the learned Presiding Officer passed the impugned final order as indicated above.
18. Learned counsel for the appellants-defendants contends that the learned Presiding Officer of the DRT has not framed the necessary and the relevant issues or points for determination, and that the various factual and legal issues raised by the appellants-defendants have also neither been considered nor a finding given on those issues. He, therefore, contends that there is total non-application of mind with regard to these aspects while disposing of the original application, and therefore, the order is liable to be set aside.
19. Learned counsel for the appellants-defendants points out from the written statement filed by them (to the original application before the DRT) that the appellants-defendants have taken the specific plea that the signatures of the appellants-defendants were obtained by the respondent-bank on blank papers and forms, and therefore, there was no valid contract between them. He also points out the specific plea that the documents mentioned in paragraphs 4(i) to 4(vi) of the plaint, were not executed as all the papers and forms were signed while they were blank. I have already extracted the averments in paragraphs 4(i) to 4(vi) of the plaint, wherein, the respondent-bank has mentioned about the execution of the documents like demand promissory note, the letter of arrangement, the agreement for cash credit limit (form I), the agreement for cash credit limit (form K), the demand promissory note delivery letter, and the free access letter. Learned counsel for the appellants-defendants points out from the impugned final order that no issues or points for determination have been famed by the learned Presiding Officer of the DRT, as to whether the appellants-defendants or any of them executed the above said documents or whether they or any of them signed these documents in blank. He contends that since the appellants-defendants have signed only in the blank papers and forms it cannot be stated that they executed these documents fully knowing what they are. He points out from the impugned final order that the learned Presiding Officer of the DRT has mainly purported to consider the claim of the appellants-defendants for counter-claim and set-off, and has not considered the question whether the appellants-defendants or any of them executed these documents and whether the signatures of the appellants-defendants have been taken in the documents while they were blank. He, therefore, contends that when the specific case put forward by the appellants-defendants has not been considered and decided specifically, the impugned final order of the learned Presiding Officer has to be set aside.
20. As against this learned counsel for the respondent-bank contends that it is seen from the statement of accounts that the first defendant has drawn about Rs. 53,000 on February 19, 1992, itself and nobody would have been allowed to withdraw money without executing necessary loan documents. He also refers to para. 3 of the written statement wherein it has been mentioned that some financial assistance was taken from the respondent-bank on February 19, 1992, against pledge and hypothecation, and contends that this averment amounts to an admission of the execution of the documents.
21. But, as rightly pointed out by learned counsel for the appellants-defendants in the very same paragraph of the written statement they have urged that the signatures were taken in blank papers and forms, and that since they wanted to take financial assistance, they signed in blank papers and forms due to the pressure of the respondent-bank.
22. Therefore, it cannot be stated that the appellants-defendants have admitted execution. Similarly, even if the appellants-defendants had drawn some money from the respondent-bank on February 19, 1992, it does not mean that they had executed the documents.
23. In this connection, learned counsel for the appellants-defendants relies upon the decision in Birbal Singh v. Harphool Khan, , in support of his contention that the admission of the appellants-defendants that they signed in blank papers and forms does not amount to execution of these documents.
24. Learned counsel for the appellants-defendants also relies upon the decision of the hon'ble Madras High Court in N. Ethirajulu Naidu v. K.R. Chinnikrishnan Chettiar, , wherein it was held as follows (page 335) :
"The lower court has overlooked the fact that the execution of a document implies intelligent and conscious appreciation of the contents thereof and the facts connected therewith ; and where the defendant admitted only that he had put his signature in blank piece of paper, which, he alleged, had possibly been utilised for fabricating exhibit A1 it cannot be regarded as his having admitted the execution of exhibit A1. The onus of proving that a particular paper, which is the basis of a suit was duly executed by the defendant, must, therefore, have been thrown upon the shoulders of the plaintiff."
25. These decisions support the contention of the appellants-defendants. The learned Presiding Officer of the DRT appears to have proceeded on the basis that these documents were executed. He has observed under issue No. 6 that the appellants-defendants have not denied the taking of the facility and the correctness of the account of the bank, and that the only base of their claim is set-off and counter-claim.
26. In these circumstances I am of the view that specific issues or points for consideration should have been framed on these aspects and specific finding should have been given ; which the learned Presiding Officer has not done, and that has certainly prejudiced the appellants-defendants.
27. Learned counsel for the appellants-defendants also points out the averments in the written statement that the appellant-second defendant gave the title deed to the respondent-bank to show their financial worth, that the said property belongs to the Hindu undivided family, and that the property was never mortgaged. He, also points out that the averments in the para. 5 of the plaint made in this behalf have been denied by the appellants-defendants in their written statement.
28. Learned counsel for the appellants-defendants contends that the learned Presiding Officer of the DRT has not framed any specific issue or point for consideration, as to whether the appellant-second defendant had deposited his title deed with the bank with the intention to create a mortgage and accordingly created a mortgage or not ; as to whether the mortgage, even if true, of the property belonging to the Hindu undivided family is valid, and the extent to which it will be binding. He also contends that the learned Presiding Officer of the DRT has not given any specific finding on these objections raised by the appellants-defendants in their written statement.
29. In this behalf, learned counsel for the appellants-defendants refers to the averment in the plaint para. 7, wherein the date of mortgage has been mentioned as February 15, 1992. He also points out the averments in para. 4 of the plaint, wherein, the respondent-bank has pleaded about the execution of the several other documents by the appellants-defendants, and also the averment in plaint para. 5 wherein, the respondent-bank has stated that in order to further secure the repayment of the aforesaid credit facility, the appellant-second defendant deposited his title deed, i.e., sale deed, to the extent of his half share with intent to create a mortgage. Learned counsel for the appellants-defendants also refers to the further averment in the said para. that appellant-second defendant also confirmed the creation of the said mortgage by his registered letter dated February 15, 1992, addressed to the respondent-bank.
30. Learned counsel for the appellants-defendants points out that while the credit facility itself was sanctioned on February 19, 1992, only, the mortgage is alleged to have been created on February 15, 1992. He refers to the letter stated to have been sent by the appellant-second defendant on February 15, 1992, confirming the creation of the mortgage, and points out the correction and over-writing with regard to the date at the top. He contends that the date has been corrected from "14" to "15" by overwriting. This apart, he points out that it has been mentioned in this letter as if the appellant-second defendant had deposited the title deed with the respondent-bank on February 14, 1992, with the intention to create an equitable mortgage. He also points out the recital contained in this letter that the mortgage has been created by way of collateral security for the amount due to the respondent-bank under the credit facility extended, i.e., cash credit and hypothecation limit of Rs. 9 lakhs. Learned counsel for the appellants-defendants contends that from this it appears as if the credit facility had been extended already whereas, the sanction itself was made only on February 19, 1992, even according to the respondent-bank. He further points out another recital in this letter that the property is the self-acquired property of the appellant-second defendant and that, as such, no one else has any interest in the said property, whereas, even in the same letter, it has been mentioned, in the description of property, that the property given as security is the half share.
31. Learned counsel for the appellants-defendants contends that this property allegedly mortgaged to the respondent-bank is the Hindu undivided family's property, having been purchased by the father of the appellant-second defendant and another and therefore, it is not the self-acquired property of the appellant-second defendant as stated in the letter dated February 15, 1992.
32. In this connection, he contends that while in the plaint it has been averred that the mortgage was created on February 15, 1992, the letter dated February 15, 1992, states as if the deposit of title deed to create the mortgage was made on February 14, 1992. He also points out the recital in the letter dated February 15, 1992, as if the credit facility of Rs. 9 lakhs had already been extended and as if the property is the self-acquired property. All these aspects have been pointed out by learned counsel for the appellants-defendants in support of his contention that the documents have been cooked up, and that the appellant-second defendant had not deposited the sale deed with intent to create a mortgage, but had given the same only to show their worth. Learned counsel for the appellants-defendants contends that in these circumstances, there should have been specific issues or points for consideration, as to whether the mortgage was created by deposit of title deed, and whether the appellant-second defendant executed any document confirming the depositing of the title deed. He further contends that the case of the appellants-defendants in this regard has not been considered and decided properly by the DRT.
33. Learned counsel for the appellants-defendants further contends that the letter dated February 15, 1992, contains the terms and conditions of the mortgage and therefore it should have been registered. He contends that this aspect has also not been considered and decided.
34. Learned counsel for the appellants-defendants further points out that the appellants-defendants have taken a specific plea in the written statement that the property allegedly mortgaged belongs to the Hindu undivided family and therefore, there is no question of any equitable mortgage.
35. Learned counsel for the appellants-defendants therefore, contends that the learned Presiding Officer of the DRT ought to have considered the liability and also the extent of the liability of the property allegedly mortgaged to be proceeded against in execution of the recovery certificate, since there is no denial in the replication that the property is Hindu undivided family's property. Of course, learned counsel for the respondent-bank contends that the appellant-second defendant is none other than the father and husband respectively of appellants-defendants Nos. 3 and 4 and therefore, they are, all being members of same family, and the mortgage having been created for the business of the family, bound by the mortgage. He also contends that there is no averment that the mortgage was created for any illegal and immoral purpose and therefore, in the absence of such a pleading, it is binding on all the members of the family of the appellant-second defendant.
36. But learned counsel for the appellants-defendants contends that since there is no denial that the property is the Hindu undivided family's property, the question whether the mortgage is binding and if so, the extent to which the said property will be liable to answer the suit claim should have been specifically considered and decided. He contends that there is no consideration and decision on these aspects by the learned Presiding Officer of the DRT, though learned counsel for the respondent-bank now, wants to contend that the mortgage is for family business and therefore is binding on all the members of the family of the appellant-second defendant.
37. Pointing out all these aspects learned counsel for the appellants-defendants contends that the direction in the final order for the sale of the property allegedly mortgaged, should be set aside.
38. I agree with learned counsel for the appellants-defendants in this respect. In view of the specific pleas taken denying the creation of the mortgage as also the averment that it is the property of the Hindu undivided family, specific issues or points for consideration ought to have been framed by the learned Presiding Officer of the DRT on these points and findings on these issues/points for consideration should have been given, whereas the learned Presiding Officer has not done so. Therefore, the direction given by the learned Presiding Officer for the sale of the mortgaged property has to be set aside, and the matter has to be remanded back to the DRT for consideration and decision accordingly.
39. Leaned counsel for the appellants-defendants next points out that there is no specific pleading in the plaint that appellants-defendants Nos. 2 to 4 executed the letter of guarantee on any particular date, though there is an averment in the plaint para. 8 that all the appellants-defendants are jointly and severally liable to pay the amount in their respective capacity of borrower/guarantor/mortgagor and though there is an averment in paragraph 9 that appellants-defendants Nos. 2, 3 and 4 stood guarantors. Learned counsel for the appellants-defendants points out from the guarantee deed that it has been signed by three persons, whereas, the specific averment in paragraph 3 of the plaint is that on the request of the appellant-first defendant through its directors and on the guarantee of the appellants-defendants Nos. 3 and 4 the loan was sanctioned. He contends that there is no specific averment that the appellant-second defendant executed the deed of guarantee. He also contends that wherever the blanks have been filled up, they have not been attested by anybody. He also points out that the execution of the documents as alleged in para. 9 of the plaint has been denied in the written statement.
40. Pointing out these aspects, learned counsel for the appellants-defendants contends that there should have been a specific issue/point for consideration on these aspects ; as to whether the guarantee deed was executed by all or any of the appellants-defendants Nos. 2 to 4. He also contends that these aspects should have been considered and a specific finding should have been given by the DRT, whereas, it has not been done, and therefore, also the impugned final order has to be set aside.
41. I agree with learned counsel for the appellants-defendants in this respect. There is no specific issue on this aspect. There has also been no consideration or finding on this aspect. The learned Presiding Officer has in the impugned final order directed the recovery of the amount from defendants Nos. 2 to 4 also, and has also ordered that the amount can be recovered from the other properties of the defendants. Therefore, where a personal liability is sought to be imposed upon the appellants-defendants Nos. 2 to 4, there should have been a specific issue as to whether the appellants-defendants Nos. 2 to 4 executed the deed of guarantee. This aspect should have been considered and decided, whereas, that has not been done by the learned Presiding Officer of the DRT.
42. Learned counsel for the appellants-defendants next points out that the first defendant-company is stated to have executed a demand promissory note on February 19, 1992, in favour of the appellants-defendants Nos. 2 to 4 and the appellants-defendants Nos. 2 to 4 are stated to have assigned the same in favour of the respondent-bank. Learned counsel for the appellants-defendants contends that even if the respondent-bank, wants to fasten liability on the appellants-defendants Nos. 2 to 4 as endorsers, in view of the assignment of the pro-note by the appellants-defendants Nos. 2 to 4 in favour of the respondent-bank, the said liability of the appellants-defendants Nos. 2 to 4, as endorsers, would arise only after dishonour by the first appellant-defendant-company to pay the money under the pro-note, and after a notice of dishonour has been issued by the respondent-bank with regard to the claim under the pro-note in view of the provisions contained in Section 35 of the Negotiable Instruments Act. Learned counsel for the appellants-defendants contends that there is no averment in the plaint that the pro note has been dishonoured, and therefore, the appellants-defendants Nos. 2 to 4 are liable to pay the amount due under the pro note as endorsers, except the vague and general allegation in paragraph 8 of the plaint that all the appellants-defendants are liable to pay the amount in their respective capacity of borrower/guarantor/mortgagor.
43. But learned counsel or the respondent-bank contends that a notice had been issued calling upon the appellants-defendants to pay the amount within a week. But, learned counsel for the appellants-defendants points out that this notice dated May 24, 1995/July 20, 1995, has been issued to defendants Nos. 1 and 2, and does not specifically mention that the amount under the pro note should be paid or that there was any dishonour of the pro note. He contends that there is no reference to the pro note in this notice at all.
44. Learned counsel for the appellants-defendants also refers to the guarantee (form B) stated to have been executed by appellants-defendants Nos. 2 to 4, especially to the recital that in consideration of the respondent-bank having agreed at their request to grant the loan/cash credit to the extent of Rs. 9 lakhs, secured by the promissory note, that they have delivered a promissory note dated February 19, 1992, for Rs. 9 lakhs (being intended as a guarantee) and that the respondent-bank shall be at liberty to enforce the payment of the said promissory note at any time after seven days' notice in writing demanding payment thereof. Learned counsel for the appellants-defendants contends that in view of these terms and conditions, the liability of the endorsers to pay the amount to the respondent-bank would arise only in case of dishonour of the pro note, and a seven days' notice had been issued, whereas there was no such notice.
45. He therefore contends that the appellants-defendants Nos. 2 to 4 cannot be made liable as endorsers of the promissory note, since, there is no averment in the plaint that the demand for payment under the pro note was made or that there was dishonour, and therefore, the appellants-defendants Nos. 2 to 4 are liable as endorsers/guarantors. He contends that when the liability of the endorsers to perform as per the pro note has not been invoked by the respondent-bank by making specific averments in this regard, there is no cause of action to file the suit/original application on that basis. He contends that with regard to these aspects also there is no consideration and decision by the DRT.
46. Learned counsel for the respondent-bank on the other hand contends that the parties can dispense with the notice of dishonour in view of the provision contained in Section 98(a) of the Negotiable Instruments Act, and that such a notice has been dispensed with.
47. But, as learned counsel for the appellants-defendants rightly contends these aspects have not been considered and decided by the learned Presiding Officer of the DRT, and therefore the matter has to be remanded back to the DRT for consideration and decision.
48. Learned counsel for the appellants-defendants contends that the operation of the accounts stopped in June, 1992, itself and therefore, the suit filed in May, 1996, is barred by time. But learned counsel for the respondent-bank contends that the appellants-defendants have executed the revival letter and balance confirmation letter on April 6, 1994 and, therefore, the claim is not barred by time.
49. Learned counsel for the appellants-defendants further contends that since, the appellants-defendants have denied the execution of the documents in para. 9 of the plaint the respondent-bank has not only to prove the execution of the revival letter and balance confirmation letters, but also establish that the liability of the appellants-defendants Nos. 2 to 4 to pay the money under the pro note subsists. Learned counsel for the appellants-defendants contends that even otherwise, so long as there is no averment that there has been dishonour of the pro note, and that notice of dishonour was given, the question of the liability of the appellants-defendants Nos. 2 to 4 as endorsers of the pro note does not at all arise, and therefore, there is no question of any acknowledgment of the liability by the endorsers. He, therefore, contends that the revival letter dated April 6, 1994, cannot in any way revive the pro note or their liability as endorsers. He contends that the pro note having been executed in 1992 the suit is time barred, since the suit was filed in the year 1996. He contends that the alleged balance confirmation letter dated April 6, 1994, is with regard to the cash credit account only, and not with reference to the liability under the pro note. He, therefore, contends that by this alleged letter of balance confirmation, the liability under the pro note cannot be revived. He further contends that even, if the mortgage is taken into consideration as a true one, it can relate only to the appellant-second defendant and not to the other appellants-defendants. He further contends that even if the liability under the mortgage is taken into consideration, the personal liability would have been lost.
50. Learned counsel for the appellants-defendants points out the averment in the plaint that the first defendant under the signature of the second defendant acknowledged and confirmed the balance on April 6, 1993. He also points out the averment in their written statement that they had shifted to Delhi in January, 1993 and, therefore, he did not acknowledge or confirm the balance on April 6, 1993.
51. The learned Presiding Officer has of course framed an issue as to whether the claim of the respondent-bank is barred by time, and has given a finding that the claim is not barred by time. The learned Presiding Officer found that the respondent-bank has proved the execution of the balance confirmation letter dated April 6, 1994, by Mr. T.K. Paul, who stated that Mr. Sandeep Saraf (the third defendant) acknowledged the debt on April 6, 1994, in his presence and executed the documents. The learned Presiding Officer held that the possibility of his coming to the respondent-bank cannot be ruled out.
52. But, learned counsel for the appellants-defendants contends that the affidavit of Mr. T.K. Paul was sworn to by him on June 26, 1999, and at that time the documents were in a sealed cover in the court, whereas the verification in the affidavit is that he was swearing to the affidavit from his personal knowledge and records available with the bank. He also points out that T.K. Paul has not stated as to which of the facts is true to his personal knowledge and which is true as per the records available with the bank. He therefore, contends that the affidavit is not reliable. He further contends that there is nothing special in the affidavit of T.K. Paul to be preferred against the affidavit filed on the side of the appellants-defendants, especially, when there is no cross-examination, and when T.K. Paul has not attested the balance confirmation letter. Further, the averment in para. 6 of plaint is that the first defendant under the signature of the second defendant acknowledged and confirmed the balance on April 6, 1993, whereas, T.K. Paul has stated that the third defendant signed the balance confirmation on April 6, 1994. Learned counsel for the appellants-defendants contends that the finding of the learned Presiding Officer of the DRT that the possibility of the third defendant coming to Delhi cannot be ruled out, is an assumption for which there is no basis. He also contends that even if one of the defendants has signed the balance confirmation, it will not bind the other defendants.
53. Taking into consideration all these aspects, I am of the view that the finding of the learned Presiding Officer of he DRT that the claim is not barred by limitation cannot be sustained. But, in my view the respondent-bank should be given an opportunity to file proper affidavit or examine the witness to prove that the claim is in time. Then the appellants-defendants have also to be given an opportunity to move an application seeking permission to cross-examine the respondent-bank's witness.
54. Learned counsel for the appellants-defendants next contends that though the respondent-bank, in order to prove its case against the appellants-defendants filed certain affidavits, these affidavits ought not to have been considered at all. Learned counsel for the appellants-defendants contends that the DRT has not given any direction to the respondent-bank to file affidavits by way of evidence and in the absence of any such direction, the affidavits filed by the respondent-bank cannot be taken into consideration at all. In this connection, learned counsel for the appellants-defendants refers to the provisions of Rule 12(6) of the Debt Recovery Tribunal (Procedure) Rules, 1993 (hereinafter referred to as "the Rules"). Sub-rule (6) of Rule 12 of the Rules provides that the Tribunal may at any time for sufficient reason order that any particular fact or facts shall be proved by affidavit, or that the affidavit of any witness shall be read at the hearing on such conditions as the Tribunal thinks reasonable.
55. But learned counsel for the respondent-bank on the other hand contends that when the original application was pending before the DRT, Jabalpur (before it was transferred to DRT, Allahabad), direction had been given by the DRT to file the affidavits.
56. But learned counsel for the appellants-defendants contends that even otherwise, the affidavits by way of evidence filed by the respondent-bank are worthless and meaningless.
57. Learned counsel for the appellants-defendants points out that the respondent-bank has filed the affidavits of Mr. Rakesh Vohra, Mr. S.C. Magoo, Mr. T.K. Paul and Mr. D.K. Sharma in support of its case.
58. So far as the affidavit of Mr. Rakesh Vohra is concerned, learned counsel for the appellants-defendants points out that the verification of the affidavit by the deponent is dated July 26, 1999, and purports to have been made at New Delhi, whereas, it has been notarised on August 11, 1999, at Kanpur. He also points out that as per the verification, the contents of this affidavit are true to his personal knowledge and as per the records available. He further points out that it has not been made clear as to which of the paragraphs are true to his knowledge and which of them are true as per the records. He also points out that as per the affidavit, he was posted in the Naveen Market Branch, Kanpur, from January 4, 1990 to October 30, 1993, whereas, the present suit was instituted before the Civil Judge, Senior Division, Kanpur, in May, 1996. Learned counsel for the appellants-defendants contends that the suit documents, at the time when this affidavit was purportedly made were lying in a sealed cover in the court, and therefore, he could not have seen or perused these documents, when he swore to this affidavit. He also points out that though in this affidavit, Mr. Rakesh Vohra speaks about the letter of arrangement dated February 19, 1992 and states that the same is filed as annexure A1, the said annexure A1 is not found along with this affidavit. He also points out that similar is the case of annexure A2 (the promissory note), annexure A3 (promissory note delivery letter) and the guarantee (annexure A4). He also points out that while Mr. Rakesh Vohra has stated that the letter of arrangement--annexure A1 was signed in his presence, he does not say so with the reference to the guarantee form annexure A4. He further points out that Mr. Rakesh Vohra has stated in his affidavit that the appellant-second defendant--Mohan Lal Saraf signed the letter of arrangement annexure A1 as guarantor also whereas, it has not been specifically stated so in the plaint. He also points out that as per para. 5 of the affidavit, it has been mentioned that the appellant-third defendant--Sandeep Saraf had signed the declaration about the credit facilities (annexure A6); agreement for cash credit hypothecation of goods (i.e., annexure A7) agreement for cash credit hypothecation of debts and assets (i.e., annexure A8) ; hypothecation agreement in form K (i.e., annexure A9) letter of debit and cash credit account, all charges of insurance, inspection and other charges (i.e., annexure A10) and free access letter (i.e., annexure All). He points out from this affidavit that this witness has stated only about the appellant-third defendant signing all these documents in his presence and not about others.
59. He further points out that Mr. Rakesh Vohra has also stated in his affidavit that the appellant-second defendant has also given a letter to deposit the title deed with the bank and that the said letter is annexure A15. He points out that this letter annexure A15 is also not annexed with the affidavit.
60. Learned counsel for the appellants-defendants therefore, pointing out the fact that the affidavit of Mr. Rakesh Vohra was verified by him at New Delhi on July 26, 1999, whereas, it was notarised at Kanpur on August 11, 1999, the fact that the documents spoken to by him were in the custody of the court at that time, the fact that the documents spoken to by him have not been attached with this affidavit, the fact that the verification has not been done properly and the other factors pointed out, contends that these aspects will clearly show that his affidavit does not even conform to the definition of an affidavit or the form in which the affidavit should be verified. He also contends that it does not prove anything properly. He, therefore, contends that this affidavit of Mr. Rakesh Vohra cannot be relied upon, and will also be of no use.
61. So far as the affidavit of Mr. S.C. Magoo is concerned, learned counsel for the appellants-defendants points out that this affidavit was sworn to on June 26, 1999, on which date the documents were in the custody of the court, and therefore, this witness also could not have perused the documents referred to in the plaint, whereas his affidavit says that the documents referred to in the plaint are in the custody of the bank. He also points out this witness speaks about the statement of accounts, but the annexure number is left blank in the affidavit. He, therefore, contends that this affidavit also cannot be relied upon.
62. So far as the affidavit of Mr. T.K. Paul is concerned, learned counsel for the appellants-defendants points out that this affidavit was also sworn to on June 26, 1999, on which date all the documents were in the custody of the court. He contends that though this witness has stated that the appellant-third defendant has signed the balance confirmation-cum-acknowledgment of security letter (annexure A12) and form K special (annexure A9) in his presence, and that he has also signed annexure A9 along with Mr. D.K. Sharma, he does not say that these documents had been completed, when he signed them. He contends that such a statement is necessary in view of the specific plea taken by the appellants-defendants that the documents were signed by them in blank. Here again, learned counsel for the appellants-defendants points out that the affidavit does not say which of the averments are true to this personal knowledge and which of them are true as per the records. Therefore, he contends that this affidavit of Mr. T.K. Paul is also unreliable.
63. So far as the affidavit of Mr. D.K. Sharma is concerned, learned counsel for the appellants-defendants points out that as per his affidavit, Form K special (annexure A9) was signed by the appellant-third defendant and that he has also signed as a witness along with Mr. T.K. Paul, and that the guarantee form B (annexure A4) has been signed by the appellants-defendants Nos. 2 to 4 in his presence. Apart from the same objection that the documents were at the time he verified the affidavit, in the custody of the court and that the verification does not say as to which of the averments are true to his personal knowledge and which of them are true as per the records. Learned counsel for the appellants-defendants also contends that as per the averment in para. 3 of plaint, the appellant-second defendant is not even a guarantor. Therefore, he contends that this affidavit of Mr. T.K. Paul is also unreliable.
64. Apart from pointing out these defects in the affidavits filed on behalf of the respondent-bank, learned counsel for the appellants-defendants also contends that in view of the defence taken by the appellants-defendants that they signed some blank papers and forms and had not executed documents referred to in paragraphs 4(i) to 4(vi) of the plaint, the appellants-defendants should have been given an opportunity to cross-examine the witnesses whereas, no such opportunity was given to them. He contends that now, this is a case of affidavit against affidavit of the parties, and there is nothing special to prefer and rely upon the affidavits filed by the respondent-bank, and therefore the affidavits filed by the respondent-bank should have been tested by giving an opportunity to the appellants-defendants to cross-examine these witnesses. But learned counsel for the respondent-bank on the other hand contends that the appellants-defendants did not file any application for permitting them to cross-examine, and that there is also no need for cross-examination.
65. I have considered the contentions put forward with reference to the affidavits filed by the respondent-bank. The defects pointed out by learned counsel for the appellants-defendants regarding the verification contained in the affidavits, i.e., as to the source of knowledge of the deponents certainly affect the validity of these affidavits. The affidavit of Mr. Rakesh Vohra suffers from vital defects. While the verification was purportedly made on July 26, 1999, at New Delhi, it was notarised at Kanpur on August 11, 1999. The contention of the appellants-defendants that the documents were in the custody of the court in a sealed cover when these affidavits were sworn to by the deponents, and therefore, they could not have perused the documents at that time has also to be taken note of.
66. This apart, as per the affidavit of Mr. T.K. Paul, it is the third defendant--Sandeep Saraf who has signed the balance confirmation-cum-acknowledgment letter on April 6, 1994, whereas, plaint para. 6 speaks of an acknowledgment by the first defendant under the signature of the second defendant on April 6, 1993. In para. 9 of the plaint relating to "cause of action" it has been mentioned as if cause of action arose on April 6, 1994, the date of acknowledgment of balance, but, without any details and without making any reference to the acknowledgment letter-cum-balance confirmation letter dated April 6, 1993.
67. Therefore taking into consideration all the aspects pointed out above, I am of the view that these affidavits cannot be relied upon. But, at the same time, I am of the view that in the interests of justice, the respondent-bank should be given an opportunity to file fresh and proper affidavits to prove its case.
68. Therefore, in the interests of justice the appellants-defendants should also be given an opportunity to move an appropriate application seeking leave to cross-examine the witnesses.
69. Learned counsel for the appellants-defendants next points out that the principal amount claimed in the original application is Rs. 6,47,571 whereas, the interest claimed up to date of suit is Rs. 7,41,865. He contends that the account maintained by the appellants-defendants became inoperative in June, 1992, itself, but still, the respondent-bank filed the suit, only in May, 1996. Learned counsel for the appellants-defendants contends that the respondent-bank cannot sleep over the matter and allow the interest to accrue. He contends that in view of the delay, the interest for the period prior to the suit should be disallowed. Learned counsel for the appellants-defendants relies upon the decision in Central Bank of India v. Ravindra , wherein it was held that the court is not powerless to deny the bank's claim for interest if it finds that the filing of the suit was delayed for the purpose of gaining an unfair advantage, and that in such cases, the interest, though claimed as per the contract, would be denied by the court on the grounds of public policy, and the creditor having tried to gain an unfair advantage on the debtor by a deliberate inaction of himself.
70. Learned counsel for the appellants-defendants points out that the learned Presiding Officer of the DRT has allowed pendente lite and future interest till the date of realisation almost at the contract rate itself, i.e., 20 per cent. per annum, with quarterly rests, but has not given any reason for doing so. Learned counsel for the appellants-defendants relies upon the decision in Central Bank of India v. Ravindra , wherein it has been held that the award of interest pendente lite and post decree is discretionary with the court and that if the court finds that the component of interest is disproportionate to the component of the principal sum actually advanced, the court may exercise its discretion in awarding interest at a lower rate or may even decline awarding such interest, but this discretion shall be exercised fairly and judiciously and not in an arbitrary or fanciful manner.
71. In this connection, learned counsel for the appellants-defendants refers to the averment made in the counter-claim, wherein, the appellants-defendants have stated that the respondent-bank is not entitled to charge any interest or pendente lite interest or interest upon interest or other charges. Learned counsel for the appellants-defendants therefore, contends that the learned Presiding Officer of the DRT ought to have framed an issue or point for consideration, as to whether the respondent-bank is entitled to interest and if so, at what rate, and then decided the same, whereas, the learned Presiding Officer has not framed any such issue or point for consideration. He also contends that the learned Presiding Officer of the DRT has not applied his mind to this aspect and given any reasons for allowing interest at 20 per cent. per annum from the date of suit till the date of realisation, with quarterly rests.
72. I agree with learned counsel for the appellants-defendants in this respect. A perusal of the impugned final order passed by the learned Presiding Officer of the DRT shows that he has not considered these aspects and has not given his reasons for granting interest at the rate of 20 per cent. per annum with quarterly rests from the date of suit till realisation.
73. Whether the respondent-bank is not entitled to any interest at all even for the period prior to suit also has to be considered and decided.
74. Therefore, in my view, this order of the learned Presiding Officer with regard to the interest is liable to be set aside and the matter has to be remanded back to the DRT for further consideration and fresh disposal, with regard to the interest to which the respondent-bank will be entitled.
75. Learned counsel for the appellants-defendants next points out that the appellants-defendants filed the counter-claim dated June 5, 2002, claiming a sum of Rs. 8,75,603.75 being the value of the pledged and hypothecated stocks, raw materials in the custody of the respondent-bank, and also a sum of Rs. 10 lakhs as compensation from the respondent-bank for not having taken the decisions or steps in time for the disposal of the pledged/ hypothecated stocks of semi-finished and finished goods in the custody of the respondent-bank. According to the appellants-defendants some financial assistance was taken against the pledge/hypothecation of stocks, semi-finished and finished goods, raw materials and goods in process. The appellants-defendants claim that the appellant-first defendant-company was surreptitiously taken possession under Section 29 of the UPFC Act and was sold, and at that time the respondent-bank took over the unfixed assets, which were pledged and hypothecated with the respondent-bank. The appellants-defendants also claim that they had submitted the stock balance as on May 21, 1992, of the raw materials which have been pledged with the respondent-bank, the value of which was Rs. 8,75,603.75.
76. Learned counsel for the appellants-defendants contends that the stocks, raw material, etc., which were hypothecated with the respondent-bank got converted into a pledge. According to him when the UPFC took over the appellant-first defendant-company under Section 29 of the UPFC Act, the respondent-bank had taken possession of all the raw materials, etc., but had not taken steps to sell them nor has it accounted for those stocks, raw materials, etc., pledged with it. Therefore, learned counsel for the appellants-defendants contends that the respondent-bank, without giving back the raw material pledged with it, cannot even file the suit. He also contends that inasmuch as the security given in the shape of stocks, raw materials, etc., having been lost, defendants Nos. 2 to 4 who are stated to be guarantors are also discharged.
77. Learned counsel for the appellants-defendants contends that no issue has been framed as to whether the stocks, raw materials, etc., were in the custody of the respondent-bank, and that the appellants-defendants had not been given the opportunity to prove the counter-claim.
78. But learned counsel for the respondent-bank on the other hand contends that the counter-claim itself is not maintainable. According to him, though the appellants-defendants were given time to file written statement they did not file the written statement, but filed the counter-claim. According to him a counter-claim is not at all maintainable in the absence of a written statement and therefore, should be rejected.
79. In this connection learned counsel for the respondent-bank points out that while the counter-claim was filed on June 5, 2002, the written statement was filed by the defendants on June 12, 2002. Learned counsel for the respondent-bank relies upon the decision in Ramesh Chand Ardawatiya v. Anil Panjwani, and contends that in the absence of the written statement, the counter-claim cannot be entertained. But, that was a case where the defendant appeared on February 10, 1987. The written statement was not filed even till October 29, 1992, on which date the defendant absented, and the case was proceeded ex parte. The application filed by the defendant to set aside the order proceeding ex parte was dismissed. The plaintiff examined certain witnesses (in ex parte evidence). The plaintiff's arguments were heard and judgment was reserved. The civil revision petition which the defendant had preferred was dismissed on March 25, 1995. On March 25, 1995, the defendant filed an application seeking leave of the court to cross-examine the plaintiff's witnesses, which was allowed on May 2, 1995. It was on May 2, 1995, the defendant moved an application for placing on record a counter-claim. It is in these circumstances, the hon'ble Supreme Court held that once the right to file the written statement is lost, or the time limited for the delivery of the defence has expired, the written statement cannot be allowed to be filed as of right and the counter-claim cannot be allowed to be raised.
80. Learned counsel for the respondent-bank contends that the appellants-defendants have been using both the terms "pledged" and "hypothecated" with reference to the stocks, raw materials, etc., and that there cannot be a case of both pledge and hypothecation at the same time. He also contends that even as per form K, the hypothecated goods were not to be taken possession of by the respondent-bank and that there was no pledge at all. According to learned counsel for the respondent-bank the stocks, raw materials, etc., were with the appellants-defendants, and that they were not taken possession of by the respondent-bank. He also contends that there is no evidence for loss or damage allegedly suffered by the appellants-defendants and that the pleadings with regard to the counter-claim and set off are vague.
81. But, learned counsel for the appellants-defendants points out that Section 172 of the Indian Contract Act defines a "pledge" as the bailment of goods as security for payment of debt or performance of a promise. He also points out that as per Section 148 of the Indian Contract Act, bailment is delivery of goods by one person to another for some purpose upon a contract that they shall, when the purpose is accomplished, be returned. He also points out that as per Section 149 of the Indian Contract Act, the delivery to the bailee can be made by doing anything which has the effect of putting the goods in the possession of the intended bailee.
82. Pointing out these provisions, learned counsel for the appellants-defendants contends that constructive delivery shall be sufficient. In this regard learned counsel for the appellants-defendants relies upon the decision in Dhanalakshmi Bank Ltd. v. K.K. Jose, . But this decision will not be of any help to the appellants-defendants. That decision related to a case of key loan transaction. The hon'ble Kerala High Court held that the property should be actually or constructively delivered to the pawnee. In that case there was no dispute as to whether the property was in the possession of the bailee, either actually or constructively, or not. But, in the present case on hand there is a dispute as to whether the respondent was in possession of the stocks, etc., at any time. In this connection learned counsel for the respondent-bank refers to the agreement for cash credit hypothecation of goods (form K) dated February 19, 1992. He points out Clause 4 of this agreement which provides that the borrower shall maintain at all times sufficient quantity of goods. He further points out Clause 5 which provides that the goods shall be kept at the borrower's risk and expenses in good condition.
83. Pointing out these provisions learned counsel for the respondent-bank contends that it is clear that possession of the goods hypothecated were not handed to the respondent-bank. He also points out that even the appellants-defendants have used the terms "hypothecated" and "pledged" in their counter-claim, and claim for set off.
84. I agree with learned counsel for the respondent-bank in this respect. The several aspects pointed out above clearly go to show that the goods hypothecated were not delivered to the respondent-bank on February 19, 1992. That is why even learned counsel for the appellants-defendants contends that the hypothecation got converted into a pledge, and that even constructive possession is sufficient. Further, learned counsel for the appellants-defendants contends that possession of appellant-first defendant-company was taken by the UPFC, and it was sold. The case of the appellants-defendants is that at that time the respondent-bank took possession of the unfixed--pledged and hypothecated assets. This has been denied by the respondent-bank in its reply to the counter-claim. The respondent-bank has specifically stated that the stocks were in the sole custody of the defendants.
85. Learned counsel for the respondent-bank contends that the appellants-defendants have not proved that the respondent-bank took possession of the stocks, etc. He also points out that no material has been produced by the appellants-defendants even to show that UPFC took possession of the appellant-first defendant-company and sold it, and if it had done so, on what date the possession of the stocks, etc., were taken by the respondent-bank. Learned counsel for the respondent-bank contends that the appellants-defendants have not given the date on which the cause of action arose for the counter-claim or set off. He also points out that the appellant-second defendant-Mohan Saraf has not mentioned in his affidavit the date on which possession of the goods was taken, and as to when the cause of action for the counter-claim arose.
86. I agree with learned counsel for the respondent-bank in this regard. The appellants-defendants have not established by any acceptable material that at any time the possession of the hypothecated goods was taken over by the respondent-bank. There is also nothing to show that the respondent-bank is at least in constructive possession of the hypothecated goods. Therefore, the decision of the hon'ble Kerala High Court cited above will not help the appellants-defendants.
87. The decision of the hon'ble Allahabad High Court in Punjab National Bank v. Lakshmi Industrial and Trading Co. P. Ltd., AIR 2001 All 28 : [2002] 111 Comp Cas 109 also will not help the appellants-defendants. In that case the defendant's goods were pledged, and possession was given to the bank, which is not the case in the case on our hand.
88. Taking into consideration all these aspects, I hold that the appellants-defendants have not established their counter-claim or claim for set off on the basis that the goods were pledged, or that these goods were in the possession, either actual or constructive, of the respondent-bank, or that the appellants-defendants suffered any loss due to the non-availability of these goods.
89. The appellants-defendants have also taken the plea that they wanted financial assistance to the extent of Rs. 15 lakhs, but, the respondent-bank disbursed hardly Rs. 5 lakhs, which was not sufficient for their business, and that though the respondent-bank assured to grant the remaining balance, did not grant the same. The appellants-defendants claim that they have suffered loss. But as learned counsel for the respondent-bank rightly contends, the respondent-bank sanctioned a limit of Rs. 9 lakhs ; but, if the appellants-defendants did not avail of the entire amount, the respondent-bank is not responsible for the same. There is nothing to show that the respondent-bank is responsible for the alleged losses.
90. Learned counsel for the respondent-bank also contends that claim is also vague and the details of the alleged loss, the date/s on which the loss was caused have also not been specifically mentioned by the appellants-defendants. He, therefore, contends that the appellants-defendants are not entitled to the counter claim or set off on the basis of the alleged loss also.
91. I agree with learned counsel for the respondent-bank in this regard also. In view of what has been pointed above, the appellants-defendants are not entitled to the counter-claim or set off on the basis of the alleged loss also.
92. Taking into consideration all these aspects, I hold that the appellants-defendants have not proved that they are entitled to the counter-claim or to set off any amount.
93. The appeal is accordingly allowed in part, in so far as it relates to the final order passed by the learned Presiding Officer of the DRT against the appellants-defendants for the recovery of Rs. 13,89,436 with interest and costs. The final order is set aside to that extent, and the matter is remanded back to the DRT for further inquiry and fresh disposal in accordance with law and in the light of the observations contained in this order.
94. The learned Presiding Officer of the DRT shall take the O. A. back to his file, give an opportunity to respondent-bank to file fresh/further affidavits or examine witnesses to prove its case. It is also open to the appellants-defendants to move an appropriate application before the DRT seeking leave to cross-examine the respondent-bank's witnesses. If and when such an application is filed by the appellants-defendants, the same shall be considered and disposed of by the DRT in accordance with law.
95. The appeal with regard to the counter-claim and set off is dismissed.
96. The parties are directed to appear before the DRT concerned on April 28, 2004, for taking further directions from DRT, without waiting for any further notice from the DRT.
97. Copy of this order be furnished to both sides, and also be forwarded to the concerned DRT.