Canara Bank vs Rama Tayal And Ors.

S.N.H. Zaidi, J

Heard parties Counsel on application IA No. 255/2011 filed by the appellant for condonation of delay in filing the appeal. The appeal has been filed on 4.3.2011 against the order dated 9.2.2011. According to Mr. Vijay Kumar, the appeal is well within the period of limitation and the application has been filed by way of abundant caution, Mr. Abhay Chauhan does not dispute this contention. As the appeal has been filed within time, there is no need of any condonation of delay application is disposed of accordingly. Let the appeal be registered. Also heard on appeal and perused the record. This appeal impugns the order dated 9.2.2011 of the DRT-III, Delhi passed on M.A. No. 5/2010 filed in S.A. No. 305/2009 whereby the borrower/respondents have been allowed extension of time up to 25.3.2011 for making deposit of Rs. 1.25 crores

Briefly stated, the facts of the case are that two loan facilities were sanctioned by the appellant Bank to two firms (respondent Nos. 9 and 10 herein) of which respondent Nos. 5 to 8 and their late father were the partners. Respondent Nos. 5 to 8 and Smt. Murti Devi stood guarantors for the repayment of the loan amount and created security interest in favour of the Bank by mortgaging properties, including property in question bearing No. 4/50, Roop Nagar, Delhi. When the borrower firms could not maintain the financial discipline, the appellant filed two applications (O.A. No. 63/2003 and O.A. No. 84/2003) under Section 10 of the RDDBFI Act for the recovery of the outstanding amount of debt due qua both the loan accounts. It appears that as a cheque issued by one of the respondents (respondent No. 8) to the appellant could not be honoured, the Bank initiated proceedings under Section 138 of the Negotiable Instruments Act (N.I. Act) against him and also took measures under the SARFAESI Act against the respondents. The legal heirs of late Smt. Murti Devi (respondent Nos. 1 to 4 herein), the aforesaid guarantors and borrower firms challenged the actions of the Bank taken under the SARFAESI Act by filing application (S.A. No. 305/2009) under Section 17 of the said Act. The said SA was disposed of by the Tribunal below by order dated 6.11.2009 and the borrowers were directed to pay Rs. 2.3 crores in respect of both the loan accounts to the Bank within the given timeframe. The respondents paid Rs. one crore only in compliance of that order within the given time. They also deposited Rs. 58 lacs with the Bank in the proceedings under the N.I. Act. The respondents did not make any further payment and sought extension of time for payment of the balance amount by moving an application before the Tribunal below, which has been allowed by the impugned order.

The submission of Mr. Vijay Kumar is that as the respondents have committed default in making payment of the entire amount within the time given by order dated 6.11.2009, they were not entitled for any indulgence for extension of the time and the appellant Bank has become entitled to sell the secured assets and to recover the entire amount claimed in the OAs It is also pointed out by him that the valuation of the secured asset has since appreciated manifold.

Mr. Abhay Chauhan, on the other hand, submits that though there had been some delay in making payment as per order dated 6.11.2009, yet as the respondents have a buyer of the property in question, they intend to deposit the entire balance amount due to them along with interest, even at the contractual rate. He further points out that besides the earlier payments of Rs. 1.58 crores, the respondents have given a DD of Rs. one crore to the appellant Bank on 8.6.2012 and deposited a further sum of Rs. 16 lacs on 16.6.2012 with it and without prejudice to their rights, they are still ready to deposit any further outstanding amount.

Vijay Kumar does not dispute the above payments and submits that on calculating the interest at the contractual rate and giving adjustment of payment of Rs. 1.58 crores, an amount of Rs. 1.26 crores was due against the respondents, out of which Rs. 1.16 crores have further been deposited and as such an amount of Rs. 10 lacs is still due on them. He also points out that as against the present valuation of Rs. 8 crores, the property in question is said to have been sold for Rs. 7.4 crores. Mr. Kumar further submits that the appellant is also entitled for the cost of appeal.

Mr. Chauhan points out that besides giving the Demand Draft of Rs. 10 lacs which is ready with him, the respondents are also ready to pay the cost of appeal DD No. 008249 dated 18.6.2012 for Rs. 10 lacs has been delivered to Mr. Vijay Kumar for deposit in the respondents loan account.

Having considered the submissions of the parties Counsel, I am of the view that since the liability of the respondents has already been adjudicated by the Tribunal below by its order dated 6.11.2009, which has attained finality, the appellant cannot re-agitate the same on the ground of default in payment of the same within the given time. The appellant Bank is, therefore, entitled to the adjudicated amount of Rs. 2.3 crores together with interest at the contractual rate. As the entire amount along with interest at the said rate has been paid by the respondents to the Bank, nothing now remains to be paid to the appellant. However, since the payments have been made by the respondents during this appeal, the appellant appears entitled for cost of the appeal, which is determined as Rs. one lac as per agreement of the parties.

In view of the above observations, the appeal is finally disposed of with cost as stated above. On payment of cost, the appellant shall release the original title deed of the property in question in favour of its buyer Mr. Ravinder Goel on his identification by any of the borrowers/sellers. Copy of the order be given to the parties and one copy be sent to the DRT concerned.