Dhrupjee Prasad and Others vs State of Bihar and Others

All things considered the fact of the matter is that the appellants applied for a loan from the Bank of India in 1981 to purchase a 110 KVA Kirloskar Generator for running their cold storage. The Bank sanctioned a sum of Rs. 1,97,000.00. The appellants submitted documents as a demand promissory note, an agreement for hypothecation, a declaration of hypothecation of stocks and a letter of lien. When the time came to discharge the loan the appellants resorted to all sorts of legal engineering to ensure that the loan is not paid. The appellants took the Bank to the brink so as to obliging the bank to file a claim before the Debts Recovery Tribunal, Patna which was registered as a Case no. PT 154 of 1998; Bank of India, Siwan Branch vs. Janta Cold Storage, Siwan. The ground of the proceedings before the Debts Recovery Tribunal initially a suit was filed by the Bank, which stood transferred upon coming of Recovery of Debts Due to the Bank and Financial Institutions Act, 1993.

There is no issue on the record that the proceedings had been rendered exparte. The appellants filed a writ petition, in fact, asserting that there has been irregularity of proceedings.

While the proceedings before the Tribunal were left pending to take its recourse under the Act, the appellants were obliged under the law to make deposit but this was not done by them. Learned Judge on the petition recorded that the recovery may ensue. This, perhaps, aggrieves the appellants and, thus, the present letters patent appeal.

The appellants have approached the High Court in its equity jurisdiction. The initial submission as was made before the Court was that the debt is the barred. The High Court is not impressed with this submission as what the appellants have taken as a loan is a public debt and if the contention of the appellants is accepted then it will he a t precedent that persons like the appellants will take out loans from public banks any public finance institutions and tailor a situation that the loan is not paid and take protection under the statute of limitation that it is beyond recovery. The situation then will amount to a circumstance the persons like the appellants will contribute to deficit financing of nation''s economy of undischarged debts and the State this would take recourse to make up this deficit by taxation paid by persons and other citizens who have nothing to do with bad debts.

The debt is admitted. The hypothecation of assets against which are debt was given lies on record and the appellants have been III-advised to confirm the proceedings to avoid the discharge of the loan. The appellants are obliged a discharge their loan forthwith. The High Court is not inclined to interfere with this appeal and, according this appeal is dismissed with costs.