Alluminium Syndicate And Ors. vs Punjab & Sind Bank

Ranjit Singh, J

Originally, the Bank had filed a suit in the High Court on 16.3.1995. Defendant No. 3 was served, but did not appear before the High Court and was proceeded ex-parte. The remaining defendants were served by way of publication but did not appear. They were also proceeded ex-parte on 6.3.1997. The case ultimately was transferred to DRT and the O.A. was decided on 13.3.1997 allowing the claim of the Bank. It is seen from the recovery proceedings that when the Recovery Officer took action to put the property to auction sale an application was filed by the appellants that they are ready to deposit Rs. 2 lacs on 23.2.2007 and requested for some more time to settle the matter with the Bank. The Recovery Officer found that the CDs had sought several opportunities to get the scheduled auction postponed for settling the matter, but the same could not be settled. He directed CDs to deposit an amount of Rs. 5 lacs in their account with the Bank on or before 24.2.2007 to show their bona fide.

Thereafter, the appellants filed an application on 23.2.2007. The prayer in the application was for postponement of auction scheduled for 26.2.2007 upon the condition imposed vide order dated 22.2.2007. The CD No. 2 who was present during the proceedings agreed to deposit Rs. 4 lacs with the Bank on 24.2.2007 by way of Bank Draft or cash and also requested for postponing the scheduled auction sale for another 30 days. The earlier order was modified to the extent that instead of Rs. 5 lacs the CD No. 2 would deposit with the Bank Rs. 4 lacs on 24.2.2007 by way of demand draft/pay order/cash, failing which the auction as scheduled was to be carried out. As per the Counsel for the appellants, this amount was deposited, but still they preferred an appeal against this order before the DRT In the meantime, the auction, which was not stayed had failed. The appellants pointed out before the Tribunal below that they by then had paid a sum of Rs. 34 lacs. Placing reliance on the case of State Bank of India v. Vijay Kumar, IV (2007) SLT 504 : Appeal (Civil) No. 1573 of 2007, decided by Hon'ble Supreme Court on 26.3.2007, the appellants made a prayer for depositing the money towards OTS when the Bank had not rejected the proposal.

This prayer of the appellants was opposed by the Bank on the ground that the appeal was not maintainable in the form it was filed before the Tribunal.

The Tribunal, after hearing the arguments at length found that the basic contention in the appeal is that the appellants had entered into a compromise with the Bank vide letter dated 25.6.2003 for Rs. 40 lacs but they had defaulted in making the payment. It is noticed by the Tribunal that the appellants had made payment of approx. Rs. 24.77 lacs from 31.3.1999 till 28.2.2007. As per the case set up by the appellants they had paid a net amount of Rs. 34 lacs The Tribunal considered the judgment of the Hon'ble Supreme Court and found that it was of no help to the appellants for the reason that Hon'ble Supreme Court had viewed that the Bank may consider the proposal when it was not rejected and the appellant had paid the dues as per the OTS amount with the Bank. In the present case both the conditions had not been met with by the appellants as he had not deposited the entire compromise amount and the proposal was duly rejected by the Bank. Since the appellants in this case had not paid the OTS amount, the Tribunal below did not find any merit in the appeal. It has further observed that the contract of compromise had failed. Directions were issued to the appellants to clear the dues within 30 days. The present appeal is directed against the said order.

I have considered the submissions made by the learned Counsel for the appellants. He has primarily relied upon this Tribunal's order dated 1.1.2013 whereby the recovery proceedings was stayed on the condition that the appellants would deposit the amount of interest calculated at the rate of PLR simple prevailing between 16.1.2003 and 30.6.2004 on reducing balance basis on the outstanding principal amount, as per the OTS dated 25.6.2003, as well as on deposit of the amount of interest calculated at the rate of 24% p.a. simple with effect from 1.7.2014 on reducing balance basis on the balance principal amount until it was fully paid. This was complied with by the appellants. Counsel submits that the appellants are still ready to settle with the Bank and that they had complied with the condition imposed vide order dated 1.1.2013. Counsel for the Bank, however, would submit that the OTS has failed. No direction possibly can be issued to the Bank to settle the matter with the appellants. Now the appellants have to discharge their liability, which has increased to about Rs. 57 lacs. Concededly the appellant has not challenged the order passed in the OA. Subsequent thereto, during the course of the recovery proceedings settlement between the appellants and the Bank was entered into, but the appellants failed to take advantage of that. If the appellants still intend to settle the case, they may approach the Bank. It may not be possible for this Tribunal to issue any direction in this regard. The appellants would still be at liberty to settle their account on terms acceptable to both the parties.

With this observation, the appeal is dismissed.