ICICI Bank Limited vs Gujarat State Financial Corporation and Another

K.A. Puj, J.—The petitioner - ICICI Bank Limited has filed this petition under Article 226 of the Constitution of India praying for the direction to the respondent No. 1 Corporation to forthwith pay to the petitioner Bank a sum of Rs. 20,99,000/- payable to the petitioner towards principal being the balance payment towards the security deposit of Rs. 50 Lacs given as collateral security towards the line of credit sanctioned by the respondent Corporation under its letter No. GSFC/NBC/12274 dated 22.10.1997, along with normal bond rate at the rate of 12.03% compounded semi annually till date of realization.

This Court has issued notice on 20.08.2002. The petition was admitted on 24.09.2004 and ad-interim relief in terms of paragraph 8 (B) was granted whereby the respondent Corporation was directed to discharge its liability towards payment of interest on the balance amount of Rs. 20,99,000/- at the normal bond rate of 12.03% having accrued till the date of filing of the petition and thereafter, from time to time having accrued semi annually. The Court has also observed that it would be open for the respondents to move the Court with an appropriate application for modification or vacating of interim relief. The Court has passed further order on 29.09.2005 directing the respondent Corporation to comply with the directions issued by this Court vide order dated 24.09.2004 and to deposit the amount in question with the Registry of this Court within a period of two weeks from the date of receipt of the said order.

Pursuant to the order passed by the Court on 29.09.2005, the Court has permitted the respondent No. 1 Corporation to deposit the cheque for the amount in question with the Registry of this Court and the Registry was directed to accept the same. While issuing this direction on 12.01.2010, the Court has also disposed of Civil Application No. 2793 of 2005 moved by the respondent No. 1 Corporation for vacating the interim relief by holding that in view of the order passed in the main matter, Civil Application for vacating the interim relief did not survive and it was disposed of accordingly.

Subsequent to this, the petitioner has filed two Civil Applications being Civil Application Nos. 2877 and 2878 of 2010. In Civil Application No. 2877 of 2010, the petitioner has prayed for the direction to the Registry to issue payment in favour of and in the name of the petitioner as withdrawal of the amount of Rs. 20,99,000/- deposited by the respondent Corporation. In Civil Application No. 2878 of 2010, the petitioner has prayed for passing appropriate order against the appropriate Officer of the respondent No. 1 Corporation for failing and/or refusing and/or neglecting the compliance of the orders dated 24.09.2004 and 29.09.2005. The petitioner has also prayed for the direction to the respondent Corporation to comply with the orders dated 24.09.2004 and 29.09.2005. The petitioner has further prayed for the direction that in the event of failure of the compliance of the said orders of this Court, the respondent Corporation should not be permitted to place its defense nor the respondent Corporation be heard in Special Civil Application No. 8474 of 2002 till the full compliance is made by the respondent Corporation of the aforesaid orders in depositing the remaining amount as directed by the Court.

Under the above circumstances, the main Special Civil Application as well as two Civil Applications are taken up for hearing.

Heard Mr. T.S. Nanavaty, learned advocate appearing for the petitioner and Mr. R.D. Dave, learned advocate appearing for the respondent No. 1 - Corporation.

The dispute between the parties in a very narrow compass. The petitioner is insisting for interest, if not at the rate of 12.3% being bond rate, at any rate as this Court thinks fit just and proper. On the other hand, respondent Corporation is contending for complete waiver of interest looking to its financial condition and sacrifice made by other nationalized Banks. As a matter of fact, the petitioner in November 2004 agreed to waive entire interest which came to Rs. 3,40,500.48 on that day and cost, on getting Rs. 20,99,000/- from the respondent No. 1 Corporation, the petitioner also agreed to withdraw the present Special Civil Application on getting the aforesaid amount. However, the said offer could not be accepted by the respondent Corporation at that point of time and proceedings were going on before this Court. Ultimately, pursuant to the order passed by this Court as indicated above, the principal amount was belatedly deposited in the Court.

In view of the financial position of the respondent No. 1 Corporation as well as in view of the fact that many other public sector Banks have sacrificed even with regard to principal amount, the Court persuaded the learned advocate for the petitioner to take necessary instruction in the matter with regard to their offer made in November 2004 and if the said offer were accepted by the respondent No. 1 Corporation now, the proceedings should be put to an end.

In view of the above facts and circumstances, ultimately, consensus was arrived at between the parties and the petitioner Bank agreed to accept the principal amount of Rs. 20,99,000/- waiving their right to claim any interest on that amount.

Since consensus was arrived at between the parties, the Court has not gone into the merits of the matter and disposes of the main petition as well as two Civil Applications by directing the Registry to issue cheque of Rs. 20,99,000/- with interest, if any, accrued thereon in favour of the petitioner Bank and the said cheque be handed over to Mr. T.S. Nanavati, learned advocate appearing for the petitioner on or before 20.04.2010.

With these directions and observations, this petition as well as both the Civil Applications are accordingly disposed of without any order as to costs.