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TMI Blog2005 (11) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... al has committed an error in dismissing the suit on three counts. According to learned Counsel, the claim of the applicant-bank is secured by equitable mortgage of four properties of the defendants. Initially, a consortium of three banks, namely, Bank of Baroda, Syndicate Bank and UCO Bank had advanced loan facilities to the defendants. The claim of the Syndicate Bank and UCO Bank have been satisfied in toto whereas the claim of the appellant-bank, i.e., the Bank of Baroda was not accepted. Counsel stated the finding recorded by the Tribunal is contrary to the pleadings of the defendants and drew my attention to paras. Nos. 1 and 2 of the plain pleadings. Counsel also drew my attention to the corresponding reply in the written statement filed by the defendants. It is alleged that the letter dated April 3, 1995, written by the defendants had not been taken into consideration by the Tribunal for the purpose of considering limitation in the claims of the appellant-bank. He also drew my attention to Section 19 of the Limitation Act, 1963, and stated, the last correspondence dated April 3, 1995, is material for the purpose of counting the period of limitation. Counsel also stated as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry which brings the suit within limitation. Mere marking of documents would not help the appellant to say that the suit is not barred by limitation. Exhibiting documents is subject to relevancy and proof. As long as these entries are not proved by way of evidence, the appellant cannot now raise new grounds before this Appellate Tnbunal. Counsel also drew my attention to the written statement filed by these defendants where a specific stand has been taken about the suit being hit by limitation and stated, the suit is only for recovery of money and not a suit for enforcement of mortgage and therefore, the plea of period of limitation of 12 years cannot be accepted. While making this submission, counsel also drew my attention to a decision of the Debts Recovery Appellate Tribunal, Mumbai, in Kishor Kumar Agarwal v. State Bank of India [2000] II BC 97 (DRAT) wherein the Presiding Officer of the Debts Recovery Appellate Tribunal, Mumbai, has discussed the scope of Sections 17 and 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and the provisions appearing under Order XXXIV of the Code of Civil Procedure. Counsel pleaded dismissal of the appeal on all these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of agreements, hypothecations, deed of guarantees, etc. The cause of action again arose in favour of the applicant-bank on October 20, 1990, when fresh facilities were granted by the applicant-bank to defendant No. 1 for which necessary documents were executed by the defendants accordingly. The cause of action again arose on June 12, 1991, when defendant No. 1 executed the demand promissory note for ₹ 72 lakhs in favour of the applicant-bank. The cause of action further arose on December 17, 1992, when defendants Nos. 1 to 8 acknowledged the outstanding in term loans account. The cause of action also arose on March 3, 1993, when the defendants had executed the documents for credit facilities. The cause of action had been arising time and again when the defendants had been operating the various accounts of the term loan and credit facilities. The cause of action also arose on March 29, 1995, when defendant No. 1 had acknowledged the debts and in consideration of the same and in terms of compromising offer, paid a sum of ₹ 2,27,35,000. The cause of action still persists in favour of the applicant-bank as defendant No. 1 has not paid the amount of the dues of the outstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated March 20, 1995 and March 29, 1995, held that the amount of ₹ 2,27,35,000 was given to the applicant-bank for keeping this amount in no lien account and as such, this letter cannot be construed as if it is extension of their liability in terms of Section 19 of the Limitation Act. The Tribunal has also recorded that the applicant-bank has no right to appropriate or credit the amount in the cash credit account or TL-I account or TL-II account. Thus, the appropriation of the amount on April 5, 1995, by the applicant-bank in their account was unauthorised and cannot be accepted as a deposit, so as to extend the period of limitation. 9. The Tribunal has also considered the contention of the applicant-bank that the suit being a mortgage suit, the period of limitation is 12 years, by extracting the reliefs sought in the O. A. The Tribunal has held at para. 15 that from the reliefs sought, it is clear that the applicant-bank is seeking relief for payment of an amount of ₹ 8,42,57,538 making all the defendants jointly and severally liable. The first relief is for recovery of the above amount and the other reliefs are incidental and therefore, rejected the alternative c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticing this aspect held when the appellant has withdrawn the amount kept in no lien account and debited to the defendant's account on its own, such action cannot itself give cause of action for the appellant to sue the defendants as if this appropriation is in terms of the provisions under Section 19 of the Limitation Act. The Tribunal found that in the absence of any approval or consent by the respondents for withdrawing the amount kept in no lien account and debiting in the loan accounts of the respondents, no cause of action accrued to the appellant on April 5, 1995, for instituting the suit. It is not disputed that for such a withdrawal of the amount kept in no lien account , the appellant-bank had no authority. As per the letter dated March 29, 1995, the amount of ₹ 2,27,35,000 is to be kept in no lien account which is as per the advice of the appellant-bank and shall not be appropriated unless final settlement is made. The claim of the appellant-bank that the amount appropriated on April 5, 1995, is in terms of the settlement and falls within the ambit of Section 19 of the Limitation Act cannot be accepted. Had the defendants consented to such a recourse, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial Institutions Act, 1993, and the relevant provisions under Order XXXIV of the Code Civil Procedure has held thus : The provisions of Order XXXIV are intended to prevent the mortgagor's equity of redemption being lost at the instance of mortgagee. The provisions of Order XXXIV do not apply to the enforcement of the security. By no stretch of imagination, the mortgaged property given as a security for payment of money can be excluded from the definition of debt. If the mortgagee obtains a decree for the payment of money in satisfaction of a claim arising under the mortgage, then only he is not entitled to bring the mortgaged property to sale otherwise than by instituting a suit for sale in enforcement of the mortgage. The suit of the present form with which we are concerned is not a claim arising under the mortgage and a suit for sale in enforcement of the mortgage within the meaning of Order XXXIV of the Code of Civil Procedure. The suit is the simple suit for recovery of debt and the prayer Clauses (c) and (d) are consequential and incidental for the recovery of the said debt. The mortgage is created as a security for the payment of money and as such these submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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