Om Prakash Grover And Ors. vs Canara Bank And Ors.

Ranjit Singh, J

These two appeals, one filed by Mr. Om Prakash Grover (defendant No. 3 in the O.A.) and the other filed by Carrara Bank (applicant in the O.A.), are directed against the same order passed by the Tribunal below allowing the O.A., holding the Bank entitled to recover the amount due from defendants 1, 2 and 3 but fixing the liability of the appellant (defendant No. 3) at (256) Rs. 10 lac with interest. The grievance of the appellant Mr. Om Prakash Grover is that the impugned order has held him liable for the recovery of complete amount, which is even against the observation and finding returned by the Tribunal in the impugned order. On the other hand, the Bank has challenged the impugned order to contest the finding returned by the Tribunal whereby the appellant Mr. Om Prakash Grover has been held liable only for Rs. 10 lac and Mr. Daya Kishan (defendant No. 4) has been relieved of his liability as such.

The appeal filed by Mr. Om Prakash Grover came up for hearing on 14.9.2015 and was adjourned for today when the Counsel for the appellant pointed out that the Bank has also filed an appeal against the same order as was impugned by the appellant Mr. Om Prakash Grover.

Both the appeals are filed with delay for the condonation of which applications have been filed. In addition, appellant Mr. Om Prakash Grover has also filed an application seeking waiver of the requirement of pre-deposit.

I have heard the Counsel for both the appellants. The clear finding returned by the Tribunal below is that appellant Mr. Om Prakash Grover had deposited the documents only for two facilities which were to the extent of Rs. 10 lac plus interest. While allowing the O.A., the Tribunal has directed the defendant Nos. 1, 2 and 3 to pay jointly or severally to the Bank a sum of Rs. 44,55,953.90 within 30 days along with interest @ 12% simple. While so ordering, the Tribunal has held that out of this, the liability of appellant Om Prakash Grover (defendant No. 3) under packing credit and bill purchase limit would be to the tune of Rs. 10 lac plus interest from the date of filing of the O.A. The reading of the impugned order, however, makes it clear that the Tribunal has held the appellant Mr. Om Prakash Grover liable only to the extent of Rs. 10 lac plus interest: In this regard, the finding returned in para 15 of the impugned order can be noticed, which is as under:

"15. After hearing both side at length and perusing the record, this Tribunal is of the view that Bank has failed to show any documents whereby defendant No. 3 has agreed for creation of mortgage for entire loan facilities in fact there are certain correspondence made by defendant No. 3 for release of his property in which defendant No. 2 has also offered his property. Thus, his property liable to be released. After considering rival contention of both the parties and perusal of record, this Tribunal is of the view that initially the defendant No. 3 has deposited title documents as per exhibited AW 1/21 has given for two facilities only and outstanding of these two facilities to the extent of Rs. 10.00 lacs plus interest."

Irrespective of the manner in which the penultimate paragraph is framed in order while allowing of the O.A., the intention of the Tribunal below is clear and that is to restrict the liability of Mr. Om Prakash Grover to Rs. 10 lac plus interest and not to hold him liable jointly and severally with other defendants for payment of Rs. 44,55,953.90, which may so-appear on reading of part of the impugned order. This therefore may need clarification to the effect that the liability of the appellant Mr. Om Prakash Grover shall be restricted to Rs. 10 lac plus interest from the date of filing of the O.A. till full realization. This would be enough to clear the doubt, if any, appearing from the order.

The appellant Mr. Om Prakash Grover has already deposited a sum of Rs. 9 lac and has expressed his willingness to deposit the remaining amount within one month, with the prayer that some concession be allowed to him in the rate of interest. Since the appellant has already deposited a sum of Rs. 9 lac earlier while the earlier appeal filed by him was allowed and the case was remanded for fresh adjudication, he is entitled to maintain the present appeal without making any further deposit. The waiver application is accordingly disposed of.

Considering the fact that this Tribunal has heard both the appeals on merit to an extent and both are being disposed of in limine at this stage, the delay in filing the appeals would be deemed to have been condoned.

The grievance of the Bank is that the Tribunal below has wrongly restricted the liability of appellant Mr. Om Prakash Grover and has also wrongly relieved Mr. Daya Kishan (defendant No. 4). In order to appreciate the submission so made, some reference to the background of the case is called for. This O.A. filed by the Bank was allowed on 25.1.2011. Mr. Om Prakash Grover had filed an appeal against the said order, which was decided by this Tribunal on 21.3.2014. As can be noticed, the appellant Canara Bank had sanctioned Packing Credit Limit of Rs. 10 lac, Post Sales Credit Limit of negotiation of documents against L/Cs. of prime Banks usance whereof was not to exceed 90 days and Packing Credit Sub-Limit of Rs. 2 lac to respondent Nos. 1 and 2 in the year 1987. Smt. Jeeti Mumick had created an equitable mortgage of the property bearing No. 14/11, West Patel Nagar, New Delhi on 23.6.1987 to secure the credit facilities. This property of Smt. Jeeti Mumick was substituted with the property bearing No. 23/21, AB, Tilak Nagar, New Delhi of appellant Mr. Om Prakash Grover. On 29.11.1988, the credit facilities were enhanced from Rs. 10 lac to Rs. 15 lac and Ad hoc Packing Credit Sub-Limit of Rs. 2 lac and OD/DDB Cash Incentive Credit Limit to the tune of Rs. 1.50 lac was also permitted.

The plea of appellant Mr. Om Prakash Grover in the earlier appeal filed by him was that he had never given guarantee for the credit facilities availed by the borrower. As per him, the title deeds of his property were illegally retained by the Bank and the appellant could only be made liable for a sum of Rs. 10 lac. This plea was not accepted by the Tribunal below and thus appeal was filed. The impugned order passed by the Tribunal below on 25.1.2013 was set aside by this Tribunal not on merit but on the ground that the said judgment was pronounced after expiry of nearly two years of having been reserved for orders. By detailed reasons given in the order dated 21.3.2014, this Tribunal allowed the appeal and while setting aside the order, remanded the case back to the Tribunal for fresh hearing and decision.

The Tribunal below in this background has now passed the impugned order holding Mr. Om Prakash Grover liable only for Rs. 10 lac plus interest. The reasons given in support of this finding have already been noticed above. The appellant-Bank could not point out any document to show that Mr. Om Prakash Grover had agreed to mortgage the property to secure the entire loan facilities.

The Counsel for the appellant-Bank has now even relied upon a document furnished by appellant Mr. Om Prakash to urge that the document in complete is required to be examined and if done so, it would indicate that appellant Mr. Om Prakash had furnished guarantee for entire loan facilities advanced to the borrowers. Mr. Mehra, appearing for Mr. Om Prakash Grover, on the other hand, would refer to the subject where it has been clearly written that the total limit is of Rs. 10 lac and post credit sanctioned to the borrower by way of packing credit and bill purchase facilities had not extended through this document. The reading of the contents of this document cannot change the position that whatever guarantee was extended, it was to the extent of Rs. 10 lac. No other document was referred to during course of arguments.

Read in any manner, this document does not give any indication that it was for entire facilities advanced. Since the total limits in this document was restricted to Rs. 10 lac, the Tribunal has rightly come to the conclusion that the liability of appellant Mr. Om Prakash would be to the extent of Rs. 10 lac plus interest only.

Mr. Mehra would also submit that the guarantee without mortgage of the property would not be enforceable but has not pursued this submission as the appellant Mr. Om Prakash Grover wants to buy peace and settle the case by discharging the liability fastened on him through the impugned order.

I have also considered the request made by the Counsel for appellant Mr. Om Prakash Grover for concession in the rate of interest, but I am not inclined to reduce the rate of interest in any manner. The Bank is in no position to recover the amount as ordered by the Tribunal. The borrower-defendants are untraceable. As revealed during the course of hearing, the property of respondent No. 4, which is released by the Tribunal below, even otherwise is not available for the purpose of effecting recover}'.

The submission by the Counsel for the appellant-Bank is that Tribunal below was misconceived in passing the impugned order by observing that this order be treated as part and parcel of the final order dated 25.1.2011 as the order dated 25.1.2011 had been set aside by this Tribunal. The Counsel states that the present order could not have been held to be part and parcel of the said order. This submission has some substance but would not mean much to call for any interference in the impugned order. The Bank is otherwise held entitled to recover its amount.

The grievance by the Bank that Mr. Daya Kishan (defendant No. 4) has been wrongly released may be partly attributed to the negligence of the Bank. The Counsel appearing for Mr. Om Prakash Grover has points out that the order dated 25.1.2011 had earlier been reviewed by the Tribunal below so far as the liability of defendant No. 4 was concerned. This order on review was passed on 13.9.2013 releasing the property of defendant No. 4. The Bank has never raised any challenge against this order. Even today, the Bank has not filed any appeal against the order dated 13.9.2013.

The Tribunal had reviewed the order dated 25.1.2011 by noticing that the defendant No. 4 had never executed deed of guarantee. He had, in fact, been impleaded as mortgagor. The Tribunal accordingly found that the said defendant could not be held liable for any dues payable by other co-defendants. It is on this count that Counsel appearing for Mr. Om Prakash Grover would seek his release as well. Since this issue has not been raised before the Tribunal below and is not seriously pursued before me, I am not inclined to consider the same, more so, when the appellant Mr. Om Prakash Grover has come forward to seek concession in the rate of interest and shown his readiness to pay the amount within one month.

Once the appellant-Bank has allowed the order passed by the Tribunal below on 13.9.2013 to attain finality, it cannot now seek to challenge that order in this circuitous manner while making submission in the present appeal that defendant No. 4 is wrongly relieved. The Tribunal below had reviewed the order dated 25.1.2011 so far as the liability of defendant No. 4 was concerned when the earlier Appeal No. 284/2011 was decided on 21.3.2014. Once the Bank has allowed this position to prevail for all this while, it cannot now be permitted to rake up this issue in this manner. This Tribunal has set aside the order dated 25.1.2011. Thus, liability of defendant No. 4, if any, was set aside. Even otherwise, defendant No. 4 stood relieved of his liability when order dated 21.3.2014 was passed as per the review order dated 13.9.2013. Whatever may be the case, the position on 21.3.2011 was that defendant No. 4 had already stood relieved of his liability and against this order there was no challenge made by the Bank. The Bank thus cannot be permitted to re-agitate the issue in the present appeal when it has made no challenge till date against the order dated 13.9.2013.1, therefore, find no merit in the appeal field by the Bank. Accordingly, Appeal (Inward) No. 547/2015 filed by the Bank is dismissed, The appeal filed by Mr. Om Prakash Grover (Inward No. 516/2015) shall stand disposed of in the light of the observations made above about the liability of the said defendant.