banks and financial institutions, but also made provision
for ensuring that defaulting borrowers are not able to invoke the jurisdiction of
Civil Courts for frustrating ... synonymous with those of the regular Courts and the lawyers
representing the borrowers and defaulters used every possible mechanism and
dilatory tactics to impede
actual amount of dues, sought to be recovered from the
borrowers. The offending provisions as contained under the
Act, are such that ... possession of the secured assets
without affording any opportunity to the borrower. Before
further detailing the grounds of attack, we may peruse some
Section 13(2) of the Act provides that when a borrower, who is
under a liability to a secured creditor, makes any default in repayment ... classified as non-
performing asset, then the secured creditor may require the borrower, by
notice in writing, to discharge his liabilities within sixty days from
debit balance. He, therefore, held that
since the assessee had diverted its borrowed funds to a sister concern
without charging any interest, proportionate interest relating ... lacs had a clear nexus with the borrowed funds, as the
balance amount had been paid out of the receipts from other parties to whom
recovery of money, specially those filed by banking institutions against
their borrowers, has been referred by a three-Judge Bench of this court ... behalf appears to have been
canvassed. Interpretation of the liability of the borrower to pay interest
on the principal sum to include interest that became
action had been taken
earlier under that Act. The contention of the borrower is that the Notice
given by the bank on 6.1.2003 was merely ... companies which are
empowered to take possession of secured assets of the borrower including
the right to transfer by way of lease, assignment or sale
mortgaged properties. It appears that on account of
defaults committed by the borrowers / respondents in repayment of the
outstanding dues, in the month of April ... account of the
borrowers / respondents were classified as a “Nonperforming Asset”
(NPA) by the Bank. As the borrowers / respondents failed and neglected
to repay
term loans from various banks and financial institutions.
That part of the borrowed funds which was not immediately required by the
Company was kept invested ... circumstances of the case, interest
derived by the assessee from the borrowed funds which were invested in
short term deposits with banks would be chargeable
along with interest
if the timely payments are not made by the borrower. Each
one of them had also executed and signed Agreement of
guarantee ... which may at any time
become due to the bank from the borrower, on accounts
opened in respect of the said limits down
were to be disbursed
on the basis of securities created by the borrowers and as and
when enough securities were created, the loan amount ... been paid.
Learned counsel for the respondents submitted the
Corporation and the borrower unit have a fiduciary relationship and
are really partners in a business
