Navalakha Agencies And Ors vs Indian Bank

A. Arumughaswamy, J

The respondent/applicant has filed Original Application No. 792 P/2001 before DRT, Pune for recovery of a sum of Rs. 28,59,305.00 together with interest @ 17.5% p.a. with quarterly rest. The Original Application has been decreed on 7th October, 2003, against which the borrower/appellant has filed the present Appeal. The borrowers/guarantors are the appellant. The contention of the Counsel for the appellants have two folds: (1) The interest claimed by the respondent is excessive against the agreement. Therefore, the claim of interest is against the law. This loan is granted for indirect agriculture category. Hence, the Counsel prayed the interest cannot be levied on monthly basis, which is contrary to the sanction letter. Considering these points, the Original Application an amount to be reduced considerably. Therefore, the Appeal has to be allowed and the order of DRT, Pune has to be set aside, (2) The second contention of the Counsel for the appellant is that the creation of mortgage itself is doubtful. Nothing has been proved before the Court of Law. The loan which has been sanctioned on the basis of the documents or titles are said to have been produced before the respondent at the time of obtaining the loan are not before the Court. Hence, the Counsel prayed that the Appeal has to be allowed.

The Counsel for the respondent contended that without any pleadings, at the first instance the appellant is raising this issue before this Court. The Counsel contended that the Hon'ble High Court of Bombay raised all these points and answered. Hence, the Counsel prayed that the Appeal has to be dismissed.

On the submissions made by the respective Counsel, from the perusal of the prima facie documents, it is clear that this Appeal is against the claim amount, on the basis of the documents executed by the appellants herein. Further from perusal of the pleadings, it is seen that the respondent-Bank has sanctioned two loans to the appellant indirect agriculture category: (1) Rs. 11 lacs and Rs. 5 lacs as Cash Credit Loan Altogether, they have sanctioned Rs. 16 lacs. Thereafter, the balance amount has been confirmed by respective parties in April, 1994 and the respondent-Bank has issued statutory notice dated 20th February, 1995. Hence, there is no dispute on the events.

On the sufficient submissions made by the learned Counsel for the appellant and on verification of the records, i.e. lower Court's records and proceedings and Statement of Accounts, it is seen that the interest as claimed by him is on monthly basis, but as per the agreement, only yearly rests has been given. The amount has been received for the purpose of purchase of agricultural pesticides (CCF Loan has been obtained).

The Counsel for the appellant contends that for indirect agricultural purpose, if this loan has been obtained, yielding period has to be considered. Therefore, he relied on the Hon'ble Apex Court and contended that the respondent has calculated the interest as per the agreement and quarterly rests has been calculated which is not correct.

The Learned Counsel for the appellant contends that the mortgage has not been created by respective parties at the time of furnishing the letter to them. From perusal of the records, it is seen that only letter dated 27th October, 1995 has been produced respondent before DRT for declaration of mortgage. In that letter, ten documents have been mentioned, which were never produced before DRT. Therefore, the declaration of mortgage is bad in law.

The original documents have not been produced before this Appellate Tribunal. Therefore, the appellant had created equitable mortgage over the property in favour of the Bank which could not be a correct one. If his intention was to create mortgage, certainly one could have received the documents along with the letter of memorandum. Now the Counsel for the respondent contends that the documents are mistakely not filed before the DRT, but they are available in the Bank itself. Therefore, he wants an opportunity to produce the documents before this Appellate Tribunal. If this is allowed to produce before this Court, as requested by the Counsel for the respondent, the appellant may not have an opportunity to look into the documents. Therefore, this matter has to be remanded back to DRT, Pune. After setting aside the order dated 7th October, 2003 passed by the Presiding Officer, DRT Pune, the Original Application, stands disposed of, accordingly.

The learned Counsel appearing for the respective parties contends that the auction has been conducted. 25% of the amount alone has been deposited, which is the amount of Rs. 97,50,002/- and it is in the credit of the Bank. This fact also has been recorded.

The learned Counsel for the appellant contends that his bifurcation application, OTS Application, verification of documents application, all these applications (i.e. Exts. 16, 17, 18 and 19) are still pending before the DRT. Therefore, this applications also have to be ordered.

The Counsel for the respondent contends that the OTS Application has been disposed of. The Waiver Application also has been disposed of. Therefore, the Counsel prayed that suitable orders can be passed.

On perusal of the submissions made by both the sides, it is seen that the Exts. 16, 17, 18 and 19, all interim applications which have not been disposed of, but before that, the Original Application has been disposed of.

As per the agreement, it is only yearly rests. The interest can be calculated only on the yearly basis. Therefore, that method has to be agitated and if any other applications have not been disposed of by DRT, Pune, it is for DRT, Pune to dispose of the remaining applications also.

I have already discussed in the creation of equitable mortgage, I have to set aside the finding of the DRT. Hence, I am remanding back this matter to DRT, Pune for disposal as per the procedure known to law. If any document/affidavit has been produced by both the sides then the DRT is at liberty to receive the same and dispose of the Original Application, accordingly. Stand over to 8th August, 2014 for appearance of both the parties before DRT, Pune.

ORDER

The respondent-Bank is at liberty to produce all the original and other connected documents and file examination of affidavits within a month before DRT. The respondent is also permitted to file additional affidavit, if necessary, and the DRT is directed to dispose of the petition, calculating the interest @ annual rest, since it is Agricultural loan.