Mr. A. Das, Advocate V. Defendant No.1 and Defendant No.2 and Respondent No.5

CRP/110/2012

AI Insights

The case revolves around an application under Article 227 of the Constitution of India, filed against an order by the Debts Recovery Tribunal, Guwahati. The petitioner, who runs a Public Distribution Wholesale Shop in Meghalaya, sought various documents from the Bank to establish whether proper procedures were followed before sanctioning a loan of Rs.10,00,000/-. The petitioner alleged collusion between the Bank and an employee (Respondent No.5), claiming that the loan was obtained without his knowledge and against the norms, as the stock used for hypothecation belonged to the Government. The court dismissed the petition, finding the requested documents irrelevant to the matter of loan recovery.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 819594 (HC-GUWAHATI)
• Appeal Type: Others
• Pronouncement Date: 29-02-2012
• Assessment Year: misc
• Other Referred Cases: M/S Paras Drugs & Chemical Industries and others v. UCO Bank and others, AIR 2001 Rajasthan 356
• Laws Referred To: Article 227 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: A DAS
• Keywords: Banking Norms; Collusion; Debts Recovery Tribunal; Hypothecation; Loan sanction; Public Distribution Wholesale Shop

Judgement Text

"CRP 110/2012 BEFORE THE HON’BLE MR JUSTICE A.K. GOSWAMI. Heard Mr. A. Das, learned counsel for the petitioner. This is an application under Article 227 of the Constitution of India fi led against the order dated 29.2.2012 passed by the Debts Recovery Tribunal, Guw ahati in O.A. No.42/2010 rejecting an application praying for directing the appl icant-Bank to furnish the documents being Pre-sanction Appraisal-cum-Report, the last few years Profit and Loss Account, the report of Physical Verification of Stock, Income Tax Returns, details of previous dealing with the defendant No.1, Balance Sheet, Stock Statement, permission for hypothecation of P.D.S. rice etc. The petitioner is running a Public Distribution Wholesale Shop (P.D.S) a t Tura Bazar, Meghalaya. Learned counsel for the petitioner submits that the af oresaid documents had been sought for to establish as to whether an enquiry was done before the loan was sanctioned in the name of the petitioner amounting to Rs.10,00,000/-. The contention of Mr. Das is that the Bank had sanctioned the l oan in collusion with the defendant No.2, the Respondent No.5 herein, who is an employee of the petitioner. It has been submitted that the petitioner had put h is signature on some blank papers and due to such collusion, taking advantage of the trust reposed by the petitioner upon Respondent No.5, the Respondent No.5 w as able to obtain the loan amounting to Rs.10,00,000/-. In the petition before this Court, it has been stated by the petitioner that no loan could be granted against hypothecation of P.D.S. stock, inasmuch as the P.D .S stock belongs to the Government and the wholesalers/dealers are only the chan nels of distribution of the P.D.S Stock and the wholesalers/dealers have no righ t over the P.D.S. stock. It is, therefore, stated in the petition that the loan in question is illegal and non-est in the eye of law. Significantly, in the pet ition, it is not the case projected that the petitioner had not availed of loan. It was stated that he was not aware of the loan of Rs.10,00,000/- being granted till such time, the summon was served upon him. In the Additional Affidavit fil ed, the petitioner has stated that the loan account was being operated by the Re spondent No.5 with the signatures of the petitioner. In paragraph 12 of the written statement, the petitioner has stated that the loa n under reference was sanctioned without conforming to the banking norms. It app ears from the order dated 29.2.2012 that in order to secure the loan, documents had also been executed by the petitioner. I have also considered the judgment placed by Mr. Das in M/S Paras Drugs & Chemi cal Industries and others v. UCO Bank and others, reported in AIR 2001 Rajasthan 356. There is no dispute regarding the power of the Court to order production of documents, which is coupled with discretion to examine expediency, justness a nd relevancy of documents to the matter in question. Having regard to the nature of the relief sought for by the applicant-Bank, whic h is realization of Rs.12,66,295/- only from the petitioner and the Respondent N o.5 jointly and severally in connection with the loan of Rs.10,00,000/-, this Co urt is of the considered opinion that the documents sought for by the petitioner is not relevant for determining the issue. Accordingly, I find no good reason to interfere with the order dated 29.2.2012 a nd accordingly, the petition is dismissed. "