Devika Behl And Ors vs Canara Bank

P.K. Bhasin, J

Misc. Case No. 230/2017:

This application was filed by the appellants in the disposed of appeal seeking a direction to the respondent Bank to release the amount of Rs. 12.50 lakh to them along with accrued interest.

The appellants have filed an appeal against some interim order passed by the learned DRT in the appellants' securitisation application under Section 17(1) of SARFAESI Act. In order to maintain an appeal, the appellants were required to make a pre-deposit of 50% of the amount of debt which was being demanded from them by the secured creditor, which in the present case was Rs. 68 lakh-odd. In the order dated 28.11.2012 passed in the present appeal, this Tribunal was informed that a sum of Rs. 22 lakh had so far being deposited with the Bank and on that date the appellants' Counsel has having a demand draft of Rs. 10 lakh ready with him. That demand draft of Rs. 10 lakh was directed to be deposited with the Registry as the pre-deposit has to be made with the Appellate Tribunal. On 21.11.2012, this Tribunal passed an order directing the appellants to handover the demand draft of Rs. 10 lakh to Counsel for the Bank for being deposited in the appellants' loan account with the Bank. It is undisputed that amount of Rs. 10 lakh stood deposited in the appellants' loan account and in addition to that another sum of Rs. 2.50 lakh was also deposited directly by the appellants in their loan account whereby making total deposit of 50% of the demanded amount. Accordingly, the appeal was directed to be entertained and registered.

Finally the appeal came to be dismissed as having become infructuous vide order dated 20.1.2015 since, in the meanwhile, the appellants' S.A. itself had been rejected.

Thereafter, the present application came to be moved on 17.3.2017 seeking refund of Rs. 12.50 lakh which appellants' claimed to have made towards compliance of the condition of pre-deposit. Refund is being claimed for the reason that Hon'ble Supreme Court has passed a judgment in Axis Bank v. SBS Organics Pvt. Ltd. & Anr., III (2016) SLT 341, Civil Appeal No. 4379/2016, that pre-deposit amount, irrespective of the fate of an appeal, has to be refunded to the depositor.

This application has been opposed on behalf of the Bank on the ground that after this Tribunal had permitted the Bank to accept the payment of Rs. 10 lakh and to deposit the same in the borrower's accounts, the amount was deposited accordingly in their account and stood appropriated. In addition to that, with the payment of Rs. 2.50 lakh which was also deposited directly with the Bank by the appellants, a total sum of Rs. 12.50 lakh stood appropriated in the appellants' account.

The appellants, after the dismissal of their appeal, approached the Bank for a settlement. The Bank after taking into consideration all the payments made by the appellants from time-to-time including the aforesaid payment of Rs. 12.50 lakh, received pursuant to the direction of this Tribunal in the present disposed of appeal, a sum of Rs. 89,13,664/- was found to be recoverable and the Bank had agreed to settle the matter by accepting a sum of Rs. 70 lakh. The appellants accepted that decision of the Bank and accordingly had made payment of Rs. 70 lakh. Thereafter, their loan account has closed. A statement of account has been filed with reply on behalf of the Bank which shows the outstanding of Rs. 89,13,664/- in the loan account of the appellants' as on 31.10.2015 and that outstanding balance was after taking into consideration the above referred payment of Rs. 12.50 lakh.

Learned Counsel for the Bank has submitted that, if the appellants wanted to get back the amount of Rs. 12.50 lakh being the pre-deposit amount, the sum could have been demanded after the disposal of the appeal instead of approaching the Bank for settlement and once Bank had agreed for the settlement on the aforesaid terms which stood accepted by the appellants, now they cannot turn around and say that they are entitled to have refund of Rs. 12.50 lakh. It has been submitted that in case this amount is directed to be refunded to the appellants then the effect thereof would be that there was never a settlement and, consequently, appellants will become liable to pay the entire decretal amount as per the final order passed by the DRT and the recovery proceedings would stand revived which earlier stood closed because of the settlement for a sum of Rs. 70 lakh.

After giving my due consideration to the revival submissions, I am of the view that the appellants themselves had allowed conversion of the pre-deposit amount to that of deposit into their loan account which with mutual understanding could be done. The payment of Rs. 12.50 lakh on account of pre-deposit was accordingly permitted to be credited in the borrower's loan accounts, which Bank had done. At that time, there was no order passed by the Tribunal that amount would at any subsequent stage would be considered as pre-deposit liable to be returned to the appellants after the disposal of their appeal. Therefore, as far as the prayer being made now on behalf of the appellants for refund of amount of Rs. 12.50 lakh relying upon the judgment of Hon'ble Supreme Court in Axis Bank v. SBS Organics Pvt. Ltd. & Anr. (supra), is concerned it cannot be accepted, as that amount had ceased to be pre-deposit amount, the moment appellants gave their consent for the money to be released in favour of the Bank for being credited to their loan account. Having taken advantage of that situation, they cannot now be permitted to retract and having taken advantage of the settlement accepted by the Bank, they cannot ask for any refund. In these circumstances, I need not go into the question as to whether if the Bank had refunded Rs. 12.50 lakh, the OTS would have stood cancelled/revoked and recovery proceedings revived.

The application is dismissed, accordingly.