Law: Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997

Section: 10

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)--- ----S. 10---Leave to defend the suit---Bona fide serious dispute---Dispute was only with .regard to the validity of accounts---Three loans were received by the borrower from the Bank and contention of the borrower was that last loan was continuity of the earlier loans---Plea raised by the borrower was that mark-up on mark-up had been charged by the Bank---Validity---No requirement existed to lead evidence to prove any specific document or to prove any fact---Where the dispute could be determined from the admitted documents and. the scrutiny of the accounts, as such the same was not a serious dispute---High Court appointed a Chartered Accountant for the purpose of scrutiny of accounts---Leave to defend the suit was refused by High Court but defendants were allowed to appear and participate in .the proceedings of the Court for the purposes of determining the amount due--­Application was dismissed accordingly. PICIC v. Frontier Ceramic Ltd. 2000 CLC 287 ref. ORDER 1. These are the applications fixed for granting leave to defend under section 10 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1`997 on behalf of the defendants. All the applications have been argued simultaneously and on the same grounds, as such decided by a single order. 2. The case of the plaintiff is that they had granted facility to Tri Star Polyester Limited whereby, a sum of Rs.75 million were paid to the defendant. The facts that arise from the plaint are that the first financing agreement was entered into between Tri Star Polyester Limited and the plaintiff for a sale price of Rs.43.459 million in respect of purchase of various shares mentioned in the said agreement whereby, the said company namely Tri Star Polyester Limited agreed to buy` back the sable for a total purchase price of Rs.55.606 million. In the agreement clause 3 provides for payment of instalments and the dates for payment of each such instalment" It also provides a prompt payment bonus that in the event the purchase price paid on the dates mentioned the prompt payment bonus shall be given to the…

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