Remanded

National Bank Ltd. v. Indian Bank & Ors.

DRAT16 Apr 2024REGULAR APPEAL/101/2023

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal allowed appeals preferring the Recovery Officer's order dated 24.07.2022. The Tribunal set aside the lower court order for being non-reasoned, lacking findings on framed issues, and devoid of recorded reasons, remanding the matter for fresh adjudication with an opportunity of hearing.

What did the court decide?

The orders/judgment dated 24.07.2022 passed by the Debt Recovery Tribunal-I, Kolkata is set aside and the matter remanded to the Debt Recovery Tribunal for fresh adjudication.

National Bank Ltd. versus Indian Bank & Ors. — Banking and Recovery | DRAT (2024)

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL - KOLKATA

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HON'BLE Justice Anil Kumar Srivastava

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REGULAR APPEAL/22/2021

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A.B. BANK LIMITED having office at Overseas MumbaiBranch at Liberty Building, 41,42 Sir VithaldasThackersey Marg, New Marine Lines, Mumbai – 400020, India and its head Office at the Skymark, 18, Gulshan Avenue, Gulshan-1, Dhaka 1212, Bangladesh.

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... Appellant

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--Vs--

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INDIAN BANK AND ORS having office at 2, N. S. ROAD, Kolkata – 700001 and Branch Office SSI Finance Branch, 3, Red Cross Place, Kolkata – 700001.

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…….Respondent

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2.Mr Purnendu Das residing at C/o. M/s. K.P.S. Enterprise, Banipur, PGBT Road, P.O. Banipur, Habra, 24Parganas North, PIN : 743233

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3.Sabita Das residing at W/o. Purnendu Das, Banipur, PGBT Road, P.O. Banipur, Habra, 24-Parganas North, PIN : 743233

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4.Prosenjit Das S/O. Purnendu Das residing at Banipur, PGBT Road, P.O. Banipur, Habra, 24-Parganas North, PIN : 743233

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5.Bangladesh Krishi Bank, having head office at Krishi Bank Bhaban, 83-85, Motijhel Commercial Area, Dhaka1000, Bangladesh and Branch office at Local Principal Office at 83-85, Motijheel Commercial, Dhaka – 1000, Bangladesh and Branch office at 15, Dilkhusha C/A, Dhaka - 1000

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6.National Bank Limited office at 18, Dilkhusha Commercial Area, Bangladesh and Branch Office at 2, Sir Iqbal Road, Khulna

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7.Pubali Bank head office at 26, DilkhushaCommeIqbal Road, Khulna.

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8.Social Islamic Bank Limited Head Office at City Centre, Level-19-22, 90/1, Motijheel Commercial Area, Dhaka1000, Bangladesh

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9.Trust Bank Limited Head Office at Peoples Insurance Bhavan (2nd, 16th & 17th Floor), 36, Dilkhusha C/A, Dhaka-1000 and at NSC Tower, 62/3, Purana Paltan, Dhaka.

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10.Uttara Bank Limited Head Office at Uttara Bank Bhaban, Shahid Bir Uttam Asfaqus Samad Park, 90, Motijheel Commercial Area, P.O. Box No. 217 and 818, Dhaka-1000, Bangladesh and Branch office at 2/A, Sir Iqbal Road, Khulna – 9.

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11.United Commercial Bank Limited Branch Office at Khulna Branch, Khulna Road, Bangladesh.

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... Proforma Respondents

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REGULAR APPEAL/101/2023

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NATIONAL BANK LTD having Head Office at 116/1, Kazi Nazrul Islam Avenue, Banglamotor, Dhaka – 1000, Bangladesh, previously at 18, Dilkhusha Commercial area, Dhaka, Bangladesh.

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... Appellant

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--Vs--

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INDIAN BANK having Head office at 2 N S ROAD, KOLKATA – 700001 and Branch office at SSI Finance Branch, 3, Red Cross Place, Kolkata – 700001.

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….. Respondent

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2.Mr Purnendu Das, S/O Late BaghalaprasannaDas Prop. M/s. K.P.S. Enterprises, residing at Banipur, PGBT Road, P.O. Banipur, Habra, 24 paraganas North – 743233.

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3.Sabita Das W/o Purnendu Das residing at Banipur, PGBT Road, P.O. Banipur, Habra, 24-Parganas North – 743233.

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Prosenjit Das S/O. Purnendu Das, residing at Banipur, PGBT Road, P.O. Banipur, Habra, 24-Parganas North – 743233.

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5.Bangladesh Krishi Bank having head office at H.O. Krishi Bank Bhaban, 83-85, Motijhel Commercial Area, Dhaka-1000 and Branch office at Local Principal Office at 83-85, Motijheel Commercial, Dhaka – 1000, Bangladesh and Branch office at 15, Dilkhusha C/A, Dhaka – 1000.

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6.A B Bank Limited Overseas Mumbai Branch at Liberty Building, 41-42, Sir VithaldasThackersey Marg, New Marine Line, Mumbai – 40020, India and Head Office at The Skymark, 18, Gulshan Avenue, Gulshan-1, Dhaka-

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1212, Bangladesh.

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7.Pubali Bank Head Office at 26, DilkhushaCommeIqbal Road, Khulna.

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8.Social Islami Bank Ltd Head Office at City Centre, Level-19-22, 90/1, Motijheel Commercial Area, Dhaka1000, Bangladesh

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9.Trust Bank Limited H.O. at Peoples Insurance Bhavan (2nd, 16th & 17th Floor), 36, Dilkhusha C/A, Dhaka1000, Bangladesh and at NSC Tower, 62/3, Purana Paltan, Dhaka, Bangladesh

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10.Uttara Bank Limited H.O. at Uttara Bank Bhavan, Shahid Bir Uttam Asfaqus Samad Park, 90, Motijheel Commercial Area, PO Box No.217 and 818, Dhaka-1000, Bangladesh and Branch office at 2/A, Sir Iqbal Road, Khulna-9.

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11.United Commercial Bank Limited Branch Office at Khulna Branch, Khulna Road, Bangladesh

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... Proforma Respondents

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For appellants : Mr. Proshit Deb, ld. Adv. (Appl.22/2021) Ms. Aparajita Rao, ld. Adv. (Appl. 101/2023) Mr. P. Bose, ld. Adv.

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For respondents: Mr. Debasish Chakraborty, ld. Adv. Ms. Sarmistha Pal, ld. Adv. Mr. Proshit Deb, Ld. Adv. Resp.no.6 (Appl.101/2023) Ms. Aparajita Rao, ld. Adv. Resp. no.6 (Appeal No. 22/2021) Mr. Safikul Mondal, ld. Adv – Resp. no.9

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THE APPELLATE TRIBUNAL :

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Since the issues raised in both the Appeal No. 22 of

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2021 [Allahabad Bank (Indian Bank) Vs. Mr. Purnendu Das,

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Proprietor of M/s. K.P.S. Enterprise & 10 others] and Appeal No. 101 of 2023 [National Bank Ltd, Dhaka Vs.

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Indian Bank & 10 others] are same and the challenge is also against the same judgment and order dated

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24.07.2022 passed by the learned DRT-I, Kolkata,both

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these appealsare taken up for hearing analogously and are

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being disposed of by this common judgment and order.

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It appears that O.A. 22 of 2021 was filed by Allahabad

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Bank (now merged with the Indian Bank), who is respondent no.1 in the Appeal, before the learned DRT against defendant no.10 and ten other defendants seeking relief for issuance of recovery certificate to the tune of Rs.4311.39 lakhs together with interest, costs and other usual reliefs from defendants no. 1 to 3. Defendant no.10 is the appellant herein.

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As per pleadings in the O.A. it is stated that

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respondent no.2, 3 and 4 herein who were defendant no. 1, 2 and 3 in the O.A. before the learned DRT. Initially defendant no.1 was sanctioned Rs.91.00 lakhs for carrying out export business of onion. As proprietor of M/s. K.P.S. Enterprise, defendant no.1 approached bank for an overall limit of Rs.8,97,50,000.00. Necessary documents were executed including demand promissory note and other documents. Defendant no.2 stood as guarantor in his personal capacity. Necessary documents were executed.

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Subsequently, a limit of Rs.19.50 crore was sanctioned on

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22.12.2007 wherein again defendant no.2 and 3 stood as

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guarantor. Again, limit of Rs.33.50 crore was sanctioned on 10.08.2010 wherein again defendant no. 2 and 3 stood

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as guarantor and necessary documents were executed.

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Personal guarantee as well mortgage documents were also

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executed.

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Defendant no.1 purchased export bills from time to

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time from the applicant bank and presented those bills to the applicant bank for onward submission of the documents to the overseas buyers at Bangladesh. Ultimately, 59 bills remain unpaid with an amount of Rs.24,61,63,900/-. Defendant no.1 used to get the letter of credit from different banks of Bangladesh. Defendant no. 4 to 11 had availed packing credit from the applicant bank for procurement of goods and food grains and raised bills payable on sight. Documents were not made. Matter was taken up by the applicant with the Customs authority and

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seven bills amounting to Rs.294.91 lakhs were found to be

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fake.

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5. Pending proceeding various properties at schedule B

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were sold by the applicant as well as other mortgaged properties. FIR was also lodged in CBI,Fraud Cell, against defendant no.1. Despite several notices and reminders, they did not adhere to the terms and conditions of the loan. Ultimately, loan account was classified as NPA on 23.08.2011. Notice u/s 13(2) of the SARFAESI Act was issued on 24.10.2011 upon defendant no.1,2 and 3. Loan account of defendant no.1 was recalled as well as guarantee furnished by defendant no.1,2 and 3. Applicant bank filed O.A. u/s 19 of the Recovery of Debts & Bankruptcy Act, 1993 for issuance of recovery certificate of Rs.4311.39 lakhs together with interest, costs and other usual reliefs from defendants no. 1 to 3.

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It appears that present appellant is defendant no.10 in

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the O.A. proceeding before learned DRT, who filed written statement. Notices were served upon other defendants, but they did not enter appearance.

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Defendant no.10 filed written statement stating that

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bank had scrutinised the documents in the letter of credit

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dated 04.11.2010 and found certain discrepancies in the

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documents. Bank was already informed by the importer

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that they did not receive the goods in respect of said letter

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of credit. Accordingly, bank return concerned documents.

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Vide letter dated 06.12.2010 defendant no.10 duly returned the concerned documents to the applicant bank in terms of UCPDC,600. Thereafter, on 15.02.2011 defendant no.10 received another swift message from the applicant bank demanding payment, which was duly replied. Letter

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of credit expired on 03.08.2010. Thereafter, on

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29.12.2010 applicant bank sent swift message demanding

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payment. Since letter of credit expired there is no question of making payment. It is further stated that Suit No.58

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was filed before the District Court wherein an injunction order was passed.

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One written statement was also filed by defendant

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no.11, but who did not enter appearance in the appeal.

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Connected appeal No. 101 of 2023 is filed by National

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Bank Ltd., Bangladesh against defendant no.1 Indian Bank

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and other 10 respondents.

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On the basis of pleadings, learned DRT has framed

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following issues :

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(i) Whether the claim of the applicant is within time? (ii) Whether the defendants no. 1 to 3 had utilised the loan facilities granted by the applicant bank? And

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(iii) Whether the applicant bank is entitled to the reliefs claimed against the defendants no. 1 to 11?

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Thereafter, learned DRT recorded statement of

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witness and held that there is no evidence to contradict the

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same. Accordingly, accepted the version submitted by the applicant by way of evidence in affidavit sworn by Sri Rajeev Kumar. Consequent thereto learned DRT passed the impugned order.

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Learned counsel for the appellant has challenged the impugned order on various grounds.

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Bare perusal of the impugned judgement and order will show that learned DRT has not recorded a single finding regarding the ground taken by the applicant

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therein. Further, the pleas raised by the defendant no.10 were not considered. Even three issues were framed, but

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no finding on those issues is recorded by learned DRT.

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Basically, impugned judgement and order was passed without assigning any reason. It is settled principle of law

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that judgement and order should be a reasoned one. Learned DRT should record its own finding and thereafter judgement or order be passed. But in the present case, mandatory legal proposition was not being followed by the

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learned DRT.

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Accordingly, I am of the considered view that such a judgement and order cannot be sustained. However, it is also settled principle of law that before remanding the matter, appellate court should decide the matter if materials available on record, but in the present case, material available specifically show that if this Appellate Tribunal decide the matter, it may cause prejudicial to the parties as they would be debar from an opportunity of filing

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appeal. Hence, it is necessary that the matter be remanded back to the learned DRT to decide afresh after

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affording opportunity of hearing to the parties. It is needless to mention that learned DRT should deliver a

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reasoned judgement and order. Accordingly, both the

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appeals deserve to be allowed.

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Both the Appeal No. 22 of 2021 and Appeal No. 101 of

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2023 are allowed. Judgement and order dated 24.07.2020

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passed by learned DRT-I, Kolkata is set aside. Matter is

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remanded back to learned DRT to decide it afresh in the

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light of the observation made in the body of the judgement.

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As far as these twoappellantsare concerned, A. B.

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Bank Ltd and National Bank Ltd are preferred the appeals,

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no other defendants in the O.A. preferred any appeal.

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Hence, judgement will be binding on them.

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Since the O.A. proceedings are pending from 2021, it is expected that learned DRT should make endeavour to

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decide the matter as expeditiously as possible.

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Copy of this judgement and order be kept in the file of

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Appeal No. 101 of 2023.

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File be consigned to record room.

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Copy of the order be supplied to the appellant and the respondents and a copy be also forwarded to the concerned DRT.

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Copy of the judgement/Final Order be uploaded in the Tribunal’s website.

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Order dictated, signed and pronounced by me in the open Court on this the 16^th day of April, 2024.

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(Anil Kumar Srivastava, J) Chairperson

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Dated : 16.04.2024 14-15 /pkb

National Bank Ltd. v. Indian Bank & Ors.

Case brief

What is this about?

What did the court decide?

National Bank Ltd. v. Indian Bank & Ors.

Case brief

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