Businessman faces arrest for failing to repay loan

CHENNAI OCT. 26. Irked at a borrower showing "wilful disobedience" to court orders, Justice S. Ashok Kumar has ordered the arrest of a Hyderabad-based businessman, Mohan Reddy, and the immediate auction of his property in lieu of the sum he borrowed from the Dugar Finance Limited.

Mr. Reddy borrowed Rs. 3.38 crores between September 30, 1994 and May 30, 1995 through 21 hire purchase agreements. As he failed to repay, the matter was referred to arbitration in which process he was asked to repay the sum with 18 per cent interest.

Mr. Reddy's plea against the decree was transferred to the Madras High Court in March 2001. Though the court asked him to pay at least the admitted sum of Rs. 2.96 crores within eight weeks from October 2002, neither Mr. Reddy nor his guarantors paid up the sum. As per the report filed by the Administrator, he was liable to pay as on date Rs. 8.46 crores.

Pointing out that the depositors had been paid only 20 per cent of their deposit, Mr. Justice Ashok Kumar said, "In the interest of depositors, suitable orders are necessary for the recovery of money from the chronic debtors and defaulters".

"In spite of sufficient opportunities, the debtors have failed to pay any money. Hence, the Registry is directed to issue non-bailable warrants against them for their arrest and for producing them before this court on November 10," he said.

Mr. Reddy's 8,000-square yard property in the posh King Kothi area, valued at Rs. 10,000 per square yard, "is sufficient to meet the liability. It is ordered to be sold in public auction."

While the inspection of the immovable property is to be held on October 27 and 28, the tenders would be opened in the court on December 12.

The last date for submitting the sealed tenders before the Official Liquidator was December 10, he added.

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