Case Law Details
Shrikant G. Mantri Vs Punjab National Bank (Supreme Court of India)
Facts- The appellant, a stock-broker by profession, had opened an account with erstwhile Nedungadi Bank Limited. The appellant had applied for an overdraft facility on 25th April, 1998, in connection with his day today share and stock transactions. It is not in dispute that the said overdraft facility was sanctioned by the Bank to the appellant initially for an amount of Rs.1 crore, for which the appellant had pledged certain shares worth more than Rs.1 crore, as security as per the margin requirements specified by the Bank. Subsequently, in the year 1999, the appellant applied for enhancement of the said overdraft facility.
The said overdraft facility was enhanced by the Bank from Rs.1 crore to Rs. 5 crore, vide its letter dated 13th December, 1999.
Again, in March 2001, the appellant approached the Bank for temporary increase in the overdraft limit. The Bank, vide its letter dated 17th March, 2001, granted the request of the appellant and temporarily enhanced the overdraft facility from Rs.5 crore to Rs.6 crore, for a period of one week.
It appears that due to steep fall in the share market, the Bank, vide its letters dated 16th and 17th March, 2001, called upon the appellant to pledge additional shares to regularize the overdraft account. As an additional security, the appellant pledged 37,50,000 equity shares of face value of Rs.10/ of unlisted company Ansal Hotels Ltd. towards the dues of the Bank, vide his letter dated 30th March, 2001. It is not in dispute that subsequently, consequent to the merger of Ansal Hotels Ltd. with ITC Ltd., and the bonus and splitting of ITC shares, the aforesaid 37,50,000 equity shares of Ansal Hotels Ltd. became equivalent to 3,75,000 shares of ITC Ltd.
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