HC rejects recovery plea by SBH

Hyderabad: Justice MS Ramachandra Rao of the AP High Court rejected the plea of the State Bank of Hyderabad to recover a sum of Rs1.65 crore from one of its customers M/s Star Electrical Industries. The judge dismissed an appeal filed by the bank against the judgement of a civil court rejecting its claim.

The judge reasoned on facts of the case that the plaintiff bank had taken custody of the goods of the defendant company. There was theft of the goods while in the custody of the bank.

“The right to sue on the debt assumes that he is in a position to redeliver the goods on payment of the debt and therefore if he has put himself in a position where he is not able to redeliver the goods, he cannot obtain a decree,” Justice Ramachandra Rao reasoned while rejecting the plea of the bank. The plea of the bank that the theft of the goods is attributable to a guarantor defendant was also rejected in view of the acquittal by a criminal court.