Canara Bank vs K. Shyam International And Ors.

S.N.H. Zaidi, J

Both these appeals have arisen out of the judgment dated 10.2.2010 passed by the learned Presiding Officer of DRT-III, Delhi disposing of S.A. No. 77/2010 and O.A. No. 92/2010 with the direction to the respondent to pay Rs. 91,31,806.09 with reducing balance based simple interest @ 10% p.a. from January 1, 2010 till full payment is made. A resume of the factual matrix of the case would show that the appellant Bank had sanctioned open cash credit facility to respondent Munna Lal Gupta, the proprietor of M/s. K. Shyam International on 17.1.2004, but as that account became irregular, the Bank on 8.12.2008 classified it as NPA and issued notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the Securitisation Act) on 10.1.2009 to the respondent claiming an amount of Rs. 91,31,806.09. Respondent Munna Lal Gupta filed an application (S.A. No. 77/2010) under Section 17 of the Securitisation Act on 24.2.2010 before the DRT challenging the action of the Bank. The appellant Bank also filed an application (O.A. No. 92/2010) on 15.4.2010 under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the DRT Act) before the DRT for realising Rs. 1,09,80,245.26. The learned Presiding Officer of DRT-IU, Delhi disposed of both the applications by the impugned order with the direction, as stated above. Feeling aggrieved with the impugned order qua both the applications, the Bank had come up in appeal before this Tribunal.

I have heard Mr. Ashish Kumar Sharma, who was accompanied with Mr. R.C. Sharma, the Manager of the appellant Bank and Mr. Anand Aggarwal, who was accompanied with Mr. Munna Lal Gupta, the respondent and perused the record.

In these appeals two short questions viz.. the rate of interest pendente lite and future and the date since when the interest is payable are involved. The contention of Mr. A.K. Sharma is that the learned DRT has erred in ignoring the contractual rate of interest, which should have been allowed from 8.12.2008, the date when the account was classified as NPA, whereas the interest has been allowed with effect from an imaginary date of 1.1.2010 without any basis.

Mr. Anand Aggarwal, learned Counsel for the respondents, fairly conceded that the appellant is entitled to the interest from 8.12.2008 as claimed and the impugned judgment is bad to that extent only.

However, so far as the rate of pendente lite and future interest is concerned, Mr. Aggarwal submitted that this Tribunal in an appeal, [Appeal No. 146/2009, Punjab National Bank v. Alok Kumar Singh & Ors., I (2011) BC 25, decided on 24.11.2010] wherein the facts and circumstances were almost similar as both the O.A. and S.A. were filed before the DRT, has held that the award of pendente lite and future interest is dependent upon the discretion of the Court, which is to be exercised fairly. Mr. Aggarwal further submitted that the respondent also wants to settle the dispute with the Bank and is ready to pay the due amount with such rate of interest and within such time, as may be determined by this Tribunal. In this regard, it has been pointed out by him that the respondent had filed the S.A. disputing the alleged demand and action of the Bank much prior to the filing of the O.A. by the Bank and had made a payment of Rs. 10,10,000/- to the Bank, which has been mentioned by the DRT in its order.

Considering the facts and circumstances of the case, I am of the view that payment of simple interest on reducing balance basis at Prime Lending Rate (PLR) of the Bank as applicable from 8.12.2008, the date of classification of account as NPA, till the amount is fully paid, would meet the ends of justice. The impugned order is accordingly modified to the extent that the respondents shall pay Rs. 91,31,806.09 to the Bank within 30 days from the date of order with simple interest on reducing balance basis at Prime Lending Rate (PLR) of the Bank as applicable from 8.12.2008 till the amount is fully paid.

Both the appeals are disposed of accordingly. Copy of this order be furnished to the parties as per law and one copy be sent to the learned DRT forthwith.