1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. SUIT NO.2073 OF 1997 Bank of Baroda. ...Plaintiff. Vs. Shobha Plastics Pvt.Ltd.& Ors. ...Defendants. .... Mr.Mihir Mody i/b. K.Ashar & Co. for the Plaintiff. Mr.B.A. Vora None for Defendant Nos.1 to 4. ..... CORAM : DR.D.Y.CHANDRACHUD, J. August 6, 2009. P.C. The suit has been instituted for the recovery of monies due and outstanding to the Plaintiff under a Cash Credit (Stock) Facility extended to Defendant Nos.1 to 4 together with interest due and payable thereon. 2. In response to the request of the First Defendant, the Plaintiff by a letter of sanction dated 23rd November 1989 sanctioned six facilities, amongst them being a Cash Credit (Hypothecation of Stock) Facility in the amount of Rs.10 lakhs. The First Defendant, in order to secure the Plaintiff executed a Demand Promissory Note, a 2 letter of continuing security, an instrument of hypothecation and an undertaking, all dated 13th December 1989 in respect of the Cash Credit (Hypothecation of Stock) Facility. Defendant Nos.2 to 4 executed a Deed of Guarantee dated 13th December 1989. The aforesaid facility was availed of by the First Defendant to the extent of Rs.10 lakhs. The First Defendant is the owner of immovable property admeasuring 1840 sq.mtrs. of land at GIDC, Vapi more particularly described in Exhibit-D to the Plaint. Prior to the availing of finance from the Plaintiff, the First Defendant had received a term loan from the Fifth Defendant in the amount of Rs. 39.56 lakhs against a first charge on the aforesaid property. Under the terms of the sanction granted by the Plaintiff, a second charge was created in favour of the Plaintiff which was registered with the Registrar of Companies on 25th March 1991. 3. The First Defendant executed an acknowledgement of debt dated 21st February 1992 in respect of the Cash Credit (Hypothecation of Stock) Facility. Defendant Nos.2 to 4 executed a Deed of Guarantee dated 6th January 1993. On 19th July 1993, a tripartite agreement was 3 executed between the Plaintiff, the First Defendant and the Fifth Defendant whereby a second charge in respect of the aforesaid immovable property was recorded as having been created in favour of the Plaintiff subject to the first charge held by the Fifth Defendant. 4. The Fifth Defendant upon a default by the First Defendant, took recourse to its power under Section 29 of the State Financial Corporation Act, 1951. The Fifth Defendant is stated to have thereupon rescheduled repayment of the term loan granted to the First Defendant. On 18th August 1995, the First Defendant acknowledged its liability to the Plaintiff in the amount of Rs. 10,40,183.19. Thereupon, it has been stated that there was a default on the part of the First Defendant which led to the Fifth Defendant once again taking possession of the immovable property on 2nd January 1997. 5. At the interlocutory stage, by an order dated 7th July 1997, the Court Receiver was appointed as Receiver in respect of the goods, more particularly described in Exhibit-T to the Plaint with liberty to 4 sell the same by public auction and/or by private treaty and to appropriate the net sale proceeds and to pay the same over to the Plaintiff in satisfaction of the dues of the Plaintiff. The Court has been informed that an amount of Rs.50,000/- was realized on the sale of the goods and by an order dated 3rd February 2003, the sale was confirmed. 6. The Defendants have been served with the writ of summons. The Fifth Defendant (Gujarat State Financial Corporation) has filed a Written Statement in which it has been stated that the Corporation has a first charge on the immovable property, as noted earlier in the course of this order. The Plaintiff has not disputed the first charge of the Fifth Defendant. No Written Statement has been filed by Defendant Nos.1 to 4. In these circumstances, the averments that are contained in the plaint have not been controverted. The Plaintiff has filed an affidavit of evidence of their Chief Manager and a compilation of the original documents which are tendered and taken on record. The Plaintiff has proved its claim on the basis of the evidence on record. The Plaintiff does not dispute that the Fifth 5 Defendant has a first charge on the immovable property, more particularly described in Exhibit-D to the Plaint. The suit shall accordingly stand decreed in terms of prayer clauses (a), (b)(i), (b) (ii) and (c ). The grant of relief in terms of prayer clause (b)(i) shall be subject to the first charge on the immovable property, more particularly described in Exhibit-D to the plaint in favour of the Fifth Defendant. Monies which have been realized in pursuance of the sale of the movable property in pursuance of the orders dated 7th July 1997 and 3rd February 2003, shall be appropriated in satisfaction of the decretal dues of the Plaintiff. There shall be a refund of Court fee, if any, as per the rules. .....