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Canara Bank withdraws suit against ABCL, Amitabh clears dues

After a prolonged legal battle spanning over 20 months, Canara Bank has finally withdrawn its suit filed in debt recovery tribunal against Amitabh Bachchan Corporation Ltd for recovery of Rs 100 million advanced to the entertainment company floated by the megastar.

The case was withdrawn last week by Canara Bank after the actor opted for an out-of-the-court settlement and repaid the entire loan obtained by ABCL in three instalments ending September, its lawyer Nishit Dhruva said on Wednesday.

Accordingly, the tribunal has vacated the injunction granted earlier on the attachment of Amitabh's bungalow 'Prateeksha' located at Juhu in north-west Bombay.

The Canara Bank has also withdrawn its appeal filed before the Appellate Authority for Industrial and Financial Reconstruction against the order of Board for Industrial and Financial Reconstruction which had declared ABCL as a sick company.

The AAIFR is set up in the union finance ministry in Delhi.

In its capacity as a creditor, Canara Bank had taken objection to the company going to BIFR for being declared as a sick unit. "Since claims have been paid, our objections have been withdrawn," the bank's lawyer said.

The ABCL has also withdrawn its appeal filed before the debt recovery appellate tribunal in Bombay against the order of debt recovery tribunal which directed Amitabh Bachchan and his wife Jaya to declare on affidavit their personal assets because they had stood as guarantors for the loan obtained from Canara Bank.

Canara Bank had advanced the loan of Rs 100 million to ABCL in 1996 as credit facilities. However, ABCL failed to regularise its account with Canara Bank which filed a suit in the high court on February 25 last year.

The high court, on March 17 1999, appointed a court receiver in respect of hypothecated goods, book debts and immovable property (two flats at Juhu) of ABCL mortgaged in favour of Canara Bank.

On a motion taken out by the bank, the court had also restrained ABCL guarantors Amitabh and Jaya from creating any third person rights in respect of their Juhu bungalow 'Prateeksha'.

ABCL, however, pleaded that the bungalow had already

been mortgaged to Sahara India group for a loan of Rs 150 million obtained by Amitabh and Jaya. The suit was finally transferred to debt recovery tribunal after it was set up in Bombay in July 1999.

Meanwhile, ABCL was declared a sick company on July 9 last year by BIFR within the meaning of section 3(1)(o) of Sick Industrial Companies Special Provisions Act (SICA), 1985.

On September 2, 1999, Canara Bank filed an appeal before the AAIFR challenging the order of BIFR declaring ABCL a sick company.

Canara Bank had pleaded before the tribunal that ABCL had dishonestly tried to wriggle out from its responsibility of repaying its debt by mortgaging 'Prateeksha' bungalow of the actor.

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