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UNION OF INDIA THRU' THE SECY, MINISTRY OF FINANCE, N.DELHI versus SURESH MANI

High Court of Judicature at Allahabad

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Union Of India Thru' The Secy, Ministry Of Finance, N.Delhi v. Suresh Mani - COMPANY PETITION No. 99 of 2000 [2007] RD-AH 6073 (3 April 2007)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

Court No. 30

 COMPANY PETITION NO. 99 OF 2000

In the matter of

    Kashi Nath Seth Bank Ltd Shahjahanpur

(amalgamated with State Bank of India on 1.1.1996

under the scheme prepared by Reserve Bank of India)

Union of India through the Secretary

Ministry of Finance, New Delhi- Petitioner

Versus

Umesh Tandon S/o Late Shri Rajendra Tandon

R/o 7/110-C,  Swaroop Nagar, Kanpur,UP

Respondent

Hon. Sunil Ambwani, J.

1. Heard Shri Subodh Kumar learned counsel  for petitioner-Union of India and Shri Maneesh Mehrotra for respondent- Umesh Tandon S/o Late Shri Rajendra Tandon,  R/o 7/110-C,  Swaroop Nagar, Kanpur,UP

2. The  Union of India, through Secretary, Ministry of Finance, New Delhi has initiated these proceedings under Sections  45, 45H (2), 45L (4) of the Banking Regulation Act, 1949 read with Section 543 (1) of Companies Act, 1956 for recovery of Rs. 228.36 lakhs  along with interest from the respondent-Umesh Tandon, the Ex-Director of the Kashinath Seth Bank(amalgamated with State Bank of India w.e.f. 1.1.1996) for negligence, misfeasance and breach of trust causing mismanagement and losses to the bank leading to its winding up and amalgamation with State Bank of India, under a scheme prepared by the Reserve Bank of India.

3. Two years before the amalgamation, a moratorium was declared. The competent authority was directed to scrutinize the affairs of the Bank. It was found that the Bank had suffered losses on account of several acts of misappropriation and misfeasance by the  Directors of the Bank to the extent of Rs. 35.18 crores, as on 31.3.1995 leading to filing of this Company Petition. The matter is connected with 16 other Company Petitions with regard to misfeasance by the Ex-Directors for various periods beginning from 1984 to December 1994.

4. Shri Subodh Kumar, learned counsel for Union of India  states that respondent-Umesh Tandon  was a Director of the Bank from 22.9.1989 to 13.3.1994. He along with other members of Board of Directors is jointly and severally liable to the loss of Rs. 228.36 lacs caused to the Government of India and/or to State Bank of India due to negligence and misfeasance of the respondent, which the respondent must pay to the bank as damages along with interest @ 18% per annum.

5. Shri Maneesh Mehrotra filed his appearance in the matter in 2000. He however has not chosen to file a reply to the application. In a supplementary affidavit filed in connected Company Petition No. 112 of 2000, the loss caused to the bank explained after investigations is stated as follows:-

"10-A That till 12th of September, 1993, the affairs of the Kashi Nath Seth Bank Ltd were in the hands of a Board which was being managed by the Board of Directors including Sri P.C. Seth, R.C. Seth, Ashok Kumar, Dwarika Nath, Umesh Tandon, P.K. Pandey etc.

10-B That no doubt the Board of Directors, as per their balance sheet of the financial year 1991-92 (assessment year 1992-93) have shown profit of Rs. 5,955.48. However, in the financial year 1992-93 (assessment year 1993-94) ending on 31st March, 1993, they have shown a net loss of Rs. 7, 10, 47, 252.15. At the cost of repetition it is submitted that till 31.3.1993 the affairs of the Bank were being managed by the Board of Directors including the aforesaid persons. It is also important to mention here that while preparing and tendering the balance sheet of the Bank till 31.3.1993 there is a page showing highlights of different financial years i.e. 1988-89, 1989-90, 1990-91, 1991-92 and 1992-93. A chart of the highlights is filed herewith and is being reproduced hereinafter.

HIGHLIGHTS

(Rupee in Lakhs)

SN

1988-89

1989-90

1990-91

1991-92

1992-93

1

Total No. of Branches

29

29

29

30

30

2

Deposits

4,289.54

5,290.25

7,102.69

7,075.09

7,086.65

3

Advance

2,883.82

3,392.12

4,218.83

4,714.80

4608.16

4

Income

 540.02

  547.87

  674.11

 906.14

 398.92

5

Expenditure

 535.78

  528.29

  673.09

 904.71

1109.45

6

Reserve

   10.00

    12.75

   22.00

   24.05

-678.60

7

Investment

830.74

1085.23

1752.05

1761.30

1691.00

The reserves of the amount of different financial years is too much material specially regarding financial year 1992-93 which shown minus 678.60 Lacs. The form of balance sheet further shows that the advances made by the Bank to the borrowers is  46,08,16,180.00.  The said advances including present amount in dispute is approximately 8.00 crore. Copy of the entire balance sheet and annual report of financial year 1992-93 is being annexed herewith and marked as Annexure No. 1 to this company petition.

10C That, on 13th September, 1993 the Reserve Bank of India imposed certain restrictions regarding withdrawal of amount from the accounts of the Bank. The Board of Directors was suspended w.e.f. 13th September, 1993. Thereafter powers under Section  35-A of the Banking Regulation Act were invoked vide order dated 8.9.1993 which continued till 19.6.1994. During the restriction, the officers of the Reserve Bank of India found that the condition of the Bank was worse and actual loss to the Bank till 31.3.1994 was Rs. 24,08,47,285.82. To prove this fact a copy of the balance sheet and annual report dated 31.3.1994 is being annexed herewith and marked as Annexure No. 2 to this company petition. Ultimately while exercising the powers under Section 45 (2) of the Banking Regulation Act, the Government of India passed an order of Moratorium on 20.6.1994 suspending the business of the Bank. The said Moratorium continued till 19.12.1994. The Bank was again placed under the Reserve Bank of India's directions from 20.12.1994. Consequently second order of Moratorium was passed on 30.6.1995 which continued till the Bank was financially amalgamated with transferee bank.

10-D That in the year ending on 31.3.1995 (financial year 1994-95) (assessment year 1995-96), the Bank was found to be in loss of Rs. 35, 18, 82, 619.00. Copy of the Director's Report and balance sheet is being annexed herewith and marked as Annexure No. 3 to this company petition.

10-E That, the financial condition of the Bank was so worse that the transaction of the Bank was not possible and, as such, total business of the Bank was restricted for a period of about 2 years till it was amalgamated on 1.1.1996. After amalgamation of Kashi Nath Seth Bank Ltd in State Bank of India vide Gazette Notification dated 31.12.1995 effective from 1.1.1996, the business of the erstwhile Kashi Nath Seth Bank Ltd was transferred to the State Bank of India and State Bank of India started its smooth functioning as per the scheme of amalgamation. Copy of the gazette notification  dated 31.12.1995 is being annexed herewith and marked as Annexure No. 4 to this company petition.

6. Brief facts giving rise to this petition are that Shri Umesh Tandon was director of the bank w.e.f. 22.9.1989 to 13.3.1994. In para 11 it is stated that he along with other members of Board of Directors is jointly and severally liable for the loss caused to the bank to the tune of Rs. 133.94 lacs on account of loan extended to Dinesh Cold Storage, Shahjahanpur. Initially a  term loan of Rs. 28 lacs was sanctioned on 28.11.1988 and a cash credit (hypothecation) limit of Rs. 10 lakhs was  sanctioned to the said unit on 26.4.1989, which was enhanced to Rs. 50 lacs on 1.8.1992 in the meeting of the board of directors in which the respondent participated without taking care to examine that the plant was old and loss making and that at every time the credit limit was enhanced.

7. In para 12 of the petition, it is stated that  cash credit limit of Rs. 5 lacs sanctioned to General & Motor Finance Co. Kapsenda on 30.10.1987,  was enhanced to Rs. 15 lacs within five months. One of the partners of the borrowing company Shri Jagdish Chandra Mehrotra joined the board of directors on 20.6.1988. He was father-in-law of respondent Shri Umesh Tandon and that both of them participated in the board meeting held on 20.12.1991,  in which the credit limit of the firm was enhanced. The overdrawing and enhancements were allowed to the firm to the tune of Rs. 20.35 lacs on 22.2.1989 and Rs. 25 lacs on 20.12.1991. The respondent was required to  comply with the provisions of Section 20 of Banking Regulation Act 1949, and to take care of the interest of the bank by inquiring into the credit worthiness of the firm before enhancing the credit limit, resulting into losses to the bank.

8. In para 13 it is stated that loans extended to Seth Jewellers, Oktenganj Ballia for a cash credit of Rs. 6 lacs was sanctioned on 22.11.1985. The overdrawings were  allowed by successive branch managers to cover up such overdrawings. The credit limit of the borrowing firm was enhanced to Rs. 16 lacs by the then Chairman on 1.12.1989 which was approved by the Board of Directors on 22.12.1989 in which the respondent also  participated. These overdrawings were allowed by branch manager till it reached a limit of Rs. 26 lacs against the sanctioned limit of Rs. 16 lacs. These overdrawings were accommodated by the then Chairman Shri R.S. Chanana on 26.11.1991, and were  approved by the board in its meeting held on 20.12.1991. The excessive overdrawings were permitted without any approval of the Board and that  the Board of Directors resolved to regularise overdrawings  influenced by the fact that the proprietor of the firm Shri Ajay Seth is  the nephew of Shri P.C. Seth, ex-director of the bank.

9. In para 14 it is a term loan was sanctioned to Seth Ice and Cold Storage, Harpur, Ballia, of Rs. 10 lacs  in April 1989. Despite the fact that Rs. 4.96 lacs  were released by the branch manager in excess  of the limit, sanction of second term loan of Rs. 20 lacs by the then Chairman was approved by the Board of Directors on 22.12.1989 in which the respondent participated. The second term loan was approved by the board in a routine manner without seeking explanation of the previous loans  and overdrawings allowed by the branch manager. The outstanding reached Rs. 25 lacs against the sanctioned limit of Rs. 14 lacs  was approved in its meeting dated 1.8.1992.

10. In para 15 it is stated that loan account of Saraswati Electricals Enterprises, Sahukara, Bareilly with a cash credit of Rs. 1.5 lacs sanctioned on 27.5.1986 was allowed to  be overdrawn right from the beginning to be increased to Rs. 3 lacs on 22.1. 1987, Rs. 5 lacs on 3.3.1987 and Rs. 7 lacs on 22.12.1987. When the outstanding reached Rs.10 lacs, a proposal for enhancement of credit limit to Rs. 15 lacs was put up before the board. The directors of the meeting dated 15.5.1992, in which the respondent also participated, approved the enhancement only to regularise the overdrawings without any justification causing loss of Rs. 14.6 lacs.

11. It is then contended in para 16 that Shri Vivek Mehrotra Bhatta Entt, Shahjahanpur  with a sanction of Rs. 4 lacs on 8.11.1986 was running with excessive overdrawings and it was allowed to exercise credit limit of Rs. 6.5 lacs by the then Chairman approved in the board meeting dated 19.1.1991 in which respondent was present. The approval was given in  totally mechanical fashion  influenced by the  fact that Shri Vivek Mehrotra, son-in-law of Shri J.C. Mehrotra, a director in the bank and participated in the meeting. Shri Vivek Mehrotra is brother-in-law of the respondent.

12. In para 17 it is contended that credit was extended to  Lala Kashinath Seth Jewellers, Chowk, Shahjahanpur. It was sanctioned initially for Rs. 5 lacs on 10.4.1982. The account was allowed to be excessively overdrawn. The last enhancement was made on 4.11.1991 to Rs. 40 lacs. Though the capital of the firm  remained an abysmally low at Rs. 0.65 lacs, the accommodation to the extent of Rs. 54 lacs was allowed in the meeting dated 20.12.1991 influenced by the fact that proprietor of the borrowing unit Shri S.C. Seth, was younger brother of Shri P.C. Seth, a director in the bank.

13. It is contended  by Shri Subodh Kumar, learned counsel for petitioner that Shri J.C. Mehrotra also participated in the meeting. The interest of the respondent and the interest of Shri J.C. Mehrotra, also a partner in the firm  General and Motor Finance Co., Kapsenda was common. Shri J.C. Mehrotra is father-in-law of the respondent and also Shri   Vivek Mehrotra a partner in Bhatta Entt, Shahjahanpur, in furtherance to common intention enhanced the credit limits without disclosing their relationship thereby violating the mandatory provisions of Rule 299, and 300 of the Companies Act 1956.

14. On the other hand, Shri Arun Kumar Misra, appearing for respondent in the connected petitions, submits that in none of these transaction, the respondent is alleged to have gained anything personally or retained to himself for the purposes of assessing or quantifying recovery or damages by him to the bank. According to him, the directors may not have exercised prudence for sanction of loans, which may be required by law, but that by itself cannot be treated to be misfeasance or breach of trust. The misfeasance has  an element criminal liability. The proceedings are quasi criminal in name  which may also ultimately make respondent liable to criminal acts. He submits that out of transactions detailed in the Company Petition, when  the respondent was director of the bank  upto 1992,  the current status of  loan accounts is as follows:-

"1. Lala Kashi Nath Seth Jewellers, Bahadurganj, Shahjahanpur.

Loss shown in the petitioner-Rs. 489.40 lacs

A compromise proposal dated 26.3.2001 pending consideration before the State Bank of India.

2. Dinesh Cold Storage, Shahjahanpur

Loss shown in the Petition-Rs. 133.94 lacs

Account settled with the State Bank of India under the One Time Settlement Scheme for Rs. 94 lacs, by its order dated 26.07.2006 of the said amount, Rs. 84 lacs have been paid and a sum of Rs. 10 lacs are to be deposited by 02.4.2007.

3. General and Motor Finance Company, Kapsenda

Loss shown in the Petition-Rs. 15.67 lacs.

Present status is not known.

4. Viraj Cold Storage & Allied Industry, Misripur

Loss shown in the petition-Rs. 65.05 lacs.

Account settled with the State Bank of India under the One Time Settlement Scheme for Rs. 115.50 lacs, by its order dated 8.8.2005. The said amount has been deposited and a no dues certificate has been issued to the said firm. A withdrawal application has been filed by the Bank before Debt Recovery Tribunal, Lucknow in terms of the compromise.

5. Lal Kashi Nath Seth Jewellers, Tundla, Agra

Loss shown in the Petition-Rs. 38.87 lacs.

Account settled with the State Bank of India under the One Time Settlement Scheme for Rs. 38.77 lacs. The said amount has been deposited and the case pending before the Debt Recovery Tribunal, Allahabad was decided 24.7.2001 in terms of the compromise.

6. Seth Jewellers, Oktenganj, Ballia

Loss shown in the Petition-Rs. 29.48 lacs

Accounted settled with the State Bank of India under the One Time Settlement Scheme for Rs. 30.48 lacs, by its order dated 30.3.2001. The said amount has been deposited and the suit pending before the Debt Recovery Tribunal, Allahabad and has been dismissed in the full satisfaction of the compromise by the order dated 14.3.2002.

7. Seth Ice & Cold Storage,  Harpur, Ballia

Loss shown in the Petition-Rs. 19.80 lacs.

Account settled with the State Bank of India under the One Time Settlement Scheme for Rs. 72.61 lacs, by its order dated 31.3.2001. The said amount has been deposited and the suit pending before the Debt Recovery Tribunal, Allahabad and has been dismissed in terms of the compromise by the order dated 11.3.2002.

8. Vivek Mehrotra, Bhattha Enterprises, Shahjahanpur

Loss shown in the petition- Rs. 8.13 lacs

Present status is not known.

9. Lala Kashi Nath Seth Jewellers, Chowk, Shahjahanpur

Loss shown in the Petition- Rs. 7.28 lacs

Account settled with the State Bank of India under the one time Settlement Scheme for Rs. 6.61 lacs, by its order dated 30.3.2001. The said amount has been deposited and the suit pending before the Debt Recovery Tribunal, Allahabad and has been dismissed in terms of the compromise.

9. Saraswati Electricals Enterprises, Bareilly

Loss shown in the Petition- Rs. 14.06 lacs

A compromise proposal dated 31.3.201, after depositing Rs. 4.70 lacs is pending consideration before the State Bank of India. Present status is not known."

15. Shri Maneesh Mehrotra appearing for respondent has placed reliance upon  Official Liquidator vs. T.J. Swamy and others 1996 86 CC 696, and Official Liquidator, Dhavalgiri Paper Mills Pvt. Ltd vs. Chinubhai Khilachand and others 2003 114 CA 278  in which it was held that there should be specific allegations in respect of each director or officer, quantifying losses to the company. The allegation against former directors without giving any details of the loans and evidence to that effect is not sufficient as the liability was quasi criminal in nature.

16. In Ghaziabad Development Authority vs. Balbir Singh, AIR 2004 SC 2141, the Supreme Court held:-

"In Official Liquidator, Supreme Bank Ltd v. P.A. Tendolkar (Dead) by LRs AIR 1973 SC 1104, the question which arose for consideration was as to whether a director having regard to the provisions of Section 235 of the Companies Act, committed acts of misfeasance. The said decision ex facie has no application in the present case. Therein, this Court was concerned with a case where the director was held to be not merely cognizant of but guilty of commission of fraud in the conduct of the business of a company even through no specific act of dishonesty was proved against him personally. The duties of a Managing Director are provided for in the Companies Act as also Articles of Association of the Company. He, thus, holds a position of trust vis-a-vis the shareholders of the company. In that case all the directors were found to have committed acts of fraud. The Court took recourse to the provisions of Section 45H of the Companies Act wherein special provisions for assessing damages against delinquent directors have been laid down. Even in England where award of exemplary or aggravated  damages for insult etc. to a person has now been held to be punitive, exception has been carved out if the injury is due to 'oppressive, arbitrary or unconstitutional action by servants of the Government' (Salmond and Heuston on the Law of Torts). Misfeasance in public office is explained by Wade in his book on Administrative Law thus :

"Even where there is no ministerial duty as above, and even where no recognised tort such as trespass, nuisance, or negligence is committed, public authorities or officers may be liable in damages for malicious, deliberate or injurious wrong-doing. There is thus a tort which has been called misfeasance in public office, and which includes malicious abuse of power, deliberate maladministration, and perhaps also other unlawful acts causing injury." (p. 777).

The jurisdiction and power of the courts to indemnify a citizen for injury suffered due to abuse of power by public authorities is founded as observed by Lord Hailsham in Cassell and Co. Ltd. v. Broome (1972 AC 1027 : (1972) 1 All ER 801) on the principle that, 'an award of exemplary damages can serve a useful purpose in vindicating the strength of law'. An ordinary citizen or a common man is hardly equipped to match the might of the State or its instrumentalities. That is provided by the rule of law. It acts as a check on arbitrary and capricious exercise of power. In Rookes v. Barnard (1664 AC 1129 : (1964) 1 All ER 367, 410) it was observed by Lord Devlin, 'the servants of the government are also the servants of the people and the use of their power must always be subordinate to their duty of service'. a public functionary if he acts maliciously or oppressively and the exercise of powers results in harassment and agony then it is not an exercise of power but its abuse. No law provides protection against it. He who is responsible for it must

@page-SC2147

suffer it. Compensation or damage as explained earlier may arise even when the officer discharges his duty honestly and bona fide. But when it arises due to arbitrary or capricious behaviour then it loses its individual character and assumes social significance. Harassment of a common man by public authorities is socially abhorring and legally impermissible. It may harm him personally but the injury to society is far more grievous. Crime and corruption thrive and prosper in the society due to lack of public resistance. Nothing is more damaging than the feeling of helplessness. An ordinary citizen instead of complaining and fighting succumbs to the pressure of undesirable functioning in offices instead of standing against it. Therefore the award of compensation for harassment by public authorities not only compensates the individual, satisfies him personally but helps in curing social evil. It may result in improving the work culture and help in changing the outlook. Wade in his book Administrative Law has observed that it is to the credit of public authorities that there are simply few reported English decisions on this form of malpractice, namely, misfeasance in public offices which includes malicious use of power, deliberate maladministration and perhaps also other unlawful acts causing injury. One of the reasons for this appears to be development of law which apart, from other factors succeeded in keeping a salutary check on the functioning in the Government or semi-government offices by holding the officers personally responsible for their capricious or even ultra vires action resulting in injury or loss to a citizen by awarding damages against them. Various decisions rendered from time to time have been referred to by Wade on Misfeasance by Public Authorities. We shall refer to some of them to demonstrate how necessary it is for our society. In Ashby v. White (1703) 2 Ld Raym 938 the House of Lords invoked the principle of ubi jus ibi remedium in favour of an elector who was wrongfully prevented from voting and decreed the claim of damages.The ratio of this decision has been applied and extended by English Courts in various situations. In Roncarelli v. Duplessis (1959) 16 DLR 2d 689 the Supreme Court of Canada awarded damages against the Prime Minister of Quebec personally for directing the cancellation of a restaurant-owner's liquor licene solely because the licensee provided bail on many occasions for fellow members of the sect of Jehovah's Witnesses, which was then unpopular with the authorities. It was observed that, 'what could be more malicious than to punish this licensee for having done what he had an absolute right to do in a matter utterly irrelevant to the Alcoholic Liquor Act? Malice in the proper sense is simply acting for a reason and purpose knowingly foreign to the administration, to which was added here the element of intentional punishment by what was virtually vocation outlawry. In Smith v. East Elloe Rural District Council (1956 AC 736 : (1956) 1 All ER 855)) the House of Lords held that an action for damages might proceed against the clerk of a local authority personally on the ground that he had procured the compulsory purchase of the plaintiff's property wrongfully and in bad faith. In Farrington v. Thompson (1959 UR 286) the Supreme Court of Victoria awarded damages for exercising a power the authorities knew they did not possess. a licensing Inspector and a police officer ordered the plaintiff to close his hotel and cease supplying liquor. He obeyed and filed a suit for the resultant loss. The Court observed :

"Now I take it to be perfectly clear, that if a public officer abuses his office, either by an act of omission or commission, and the consequence of that is an injury to an individual, an action may be maintained against such public officer."

17. In the present case all the details and supporting evidence including the document of which these loans were sanctioned and limits were enhanced from time to time and minutes and proceedings of the board meeting have been brought on record. Out of seven cases the court finds the liability to be specific with particular  in only three cases  namely General Motor & Finance Co; Saraswati Electrical Enterprises and Vivek Mehrotra Bhatta Entt Shahjahanpur and has quantified the same. This liability is joint and several with other directors, who have also been made responsible for these accounts on which the respondent is made liable by the court.

18. It is not denied that some of the these demands are now settled by one time settlement accepted by the State Bank of India and in these accounts the bank would not be suffering any loss as the condition of these statements account is that no further dues be recovered from the borrowers. The statement shows that the account of  Dinesh Cold Storage, Shahjahanpur;  Seth Jewellers, Oktenganj Ballia; Seth Ice and Cold Storage, Harpur, Ballia and  Kashinath Seth Jewellers, Chowk, Shahjahanpur have been settled and that the amounts have been, or are likely to be  deposited. In the matter of General Motors and Finances Co. Kapsenda, the loss shown of Rs. 15.67 lacs; in Vivek Mehrotra Bhatta Entt, Shahjahanur, the loss is shown Rs. 8.13 lacs;  in Saraswati Electricals Enterprises, Sahukara, Bareilly,  the loss is shown Rs. 8.13 lacs and  Saraswati Electrical Enterprises Sahuraka Bareilly, in which the loss is shown at Rs. 14.06 lacs, have not been settled so far.

19. As a director of the bank, the respondent was collectively responsible for the decisions taken by the directors. During this period, the bank was suffering losses and that an observer of Reserve Bank of India was appointed to participate in the meeting. At this stage the bank had to be more careful in regularising the defaulting accounts or sanctioning fresh loans or credit limits to the  firms with history of defaults.  The loss of Rs. 15.67 lacs suffered in the matter of General Moters and Finances Co. Kapsenda.; Rs. 14.06 lacs in the matter of Saraswati Electrical Enterprises of Rs. 8.13 lacs; Vivek Mehrotra  Bhatta Entt, Shahjahanpur are directly attributable to the negligence of Shri Umesh Tandon as director along with his father-in-law Shri P.C. Mehrotra, who participated in the meeting to regularise these accounts and to further extended the loan facility. The proceedings of the meeting of the Board of Directors have been brought on record in which the respondent did not point out his relations with Shri J.C. Mehrotra and Shri Vivek Mehrotra. The respondent  as such grossly abused his position as a  director and committed  breach of trust and misfeasance in allowing the  bank to suffer irrecoverable  losses.  

20. The company petition is consequently allowed. The court quantifies the damages of Rs. 15.69 lacs in the account of General Motors and Finance Co. Kapsenda; Rs. 14.06 lacs in the account of Sawaswati Electrical Enterprises Bareilly and Rs. 8.13 lacs in the account of Vivek Mehrotra Bhatta Entt Shahjahanpur as damages  caused to due to negligence and breach of trust by the Directors of the Board including Shri Umesh Tandon to be recovered and grants declaration to that effect. Shri Umesh Chandra son of late  Shri Rajendra Tandon resident of  7/110-C, Swaroop Nagar, Kanpur, UP is restrained from transferring and encumbering his personal assets in any manner whatsoever out of which these damages are to be recovered. All these amounts will bear interest at the rate of 12% per annual w.e.f. 1.1.1996 for recovery when the Bank was taken over by the Reserve Bank of India. The Union of India will identify the properties from which these damages have to be recovered and will apply to the court for order of an  recovery of these amounts from the assets of respondent.

Dt. 3.4.2007

RKP/


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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