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of <h1>Appellant-bank's appeal dismissed as time-barred for unauthorized fund appropriation from 'no lien account.'</h1> The Tribunal dismissed the appellant-bank's appeal, ruling that the suit was time-barred due to limitation. It held that the appropriation of funds from ... - Issues Involved:1. Dismissal of the suit claim on grounds of limitation.2. Equitable mortgage and period of limitation.3. Appropriation of the amount deposited in the 'no lien account'.4. Classification of the suit as a simple recovery suit or a suit for enforcement of mortgage.Detailed Analysis:1. Dismissal of the Suit Claim on Grounds of Limitation:The appellant-bank's suit was dismissed by the Debts Recovery Tribunal (DRT), Chandigarh, on January 13, 2005, for claims of Rs. 2,33,59,138 in TL-I, Rs. 1,14,29,922 in TL-II, and Rs. 1,07,18,243, holding that these claims were barred by limitation. However, the Tribunal directed the recovery of Rs. 3,87,50,236 as interest on the bank guarantee invoked. The appellant-bank contended that the Tribunal erred in dismissing the suit on grounds of limitation, arguing that the claim was secured by an equitable mortgage of four properties and that the period of limitation should be considered from the last correspondence dated April 3, 1995, under Section 19 of the Limitation Act, 1963. The appellant also argued that the period of recovery for a mortgage suit is 12 years under Order XXXIV, Rule 2 of the Code of Civil Procedure, and thus, the suit was within the limitation period.2. Equitable Mortgage and Period of Limitation:The appellant-bank argued that the Tribunal failed to consider the equitable mortgage of four properties and the relevant entries in the statement of account, which would bring the suit within the limitation period. The appellant contended that the suit, filed in March 1997, was within the limitation period based on entries dated December 12, 1994, December 13, 1994, and March 31, 1994. The Tribunal, however, held that the suit was barred by limitation and rejected the appellant's claim of a 12-year limitation period for a mortgage suit, stating that the suit was for recovery of money and not for enforcement of mortgage.3. Appropriation of the Amount Deposited in the 'No Lien Account':The Tribunal examined whether the amount of Rs. 2,27,35,000 deposited by the defendants under settlement in a 'no lien account' could be appropriated without the consent and authority of the defendants. The Tribunal found that the amount was deposited in response to a letter dated March 20, 1995, advising the defendants to deposit funds in a 'no lien account'. The Tribunal held that the appropriation of the amount by the appellant-bank on April 5, 1995, was unauthorized and could not be considered as an acknowledgment of liability under Section 19 of the Limitation Act, thereby not extending the period of limitation.4. Classification of the Suit as a Simple Recovery Suit or a Suit for Enforcement of Mortgage:The appellant-bank argued that the suit should be considered as a suit for enforcement of mortgage, which has a 12-year limitation period under Order XXXIV of the Code of Civil Procedure. The Tribunal, however, held that the relief sought in the suit was for recovery of money, with other incidental reliefs, and thus, it could not be construed as a suit for enforcement of mortgage. The Tribunal referred to a decision by the Debts Recovery Appellate Tribunal, Mumbai, in Kishor Kumar Agarwal v. State Bank of India [2000] II BC 97 (DRAT), which clarified that the provisions of Order XXXIV do not apply to the enforcement of security and that the suit in question was a simple suit for recovery of debt.Conclusion:The Tribunal dismissed the appellant-bank's appeal, holding that the suit was barred by limitation and that the appropriation of the amount deposited in the 'no lien account' was unauthorized. The Tribunal also rejected the appellant's contention that the suit should be considered as a suit for enforcement of mortgage, affirming that it was a simple suit for recovery of money. The appeal was dismissed with no costs.
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