PER OSWAL-J
1. The appellant is a partnership concern engaged in the manufacture of
Soya Naggets from Soya Beans and had availed the credit facility
from State Bank of India against hypothecation of stock in the form of
raw material and finished goods apart from mortgage of immovable
property comprising factory, land along with building, machinery etc.
On 25.09.2000, the appellant filed the statement of stock-raw material
2026:JKLHC-JMU:756-DB
and finished goods on estimated basis to avail cash credit facility, and
inflated stock was shown as the appellant was sure that no verification
of the stock and its valuation shall be made by the bank, as the factory
building, land and machinery were furnished as collateral security.
The bank accepted the statement of stock at its face value.