Pradeep Gambhir And Ors. vs Oriental Bank Of Commerce

S.N.H. Zaidi, J

This appeal impugns the order dated 27,9.2011 passed by the learned Presiding Officer of the DRT-III, Delhi in Appeal No. 16/2010 directing the appellants to make payment as per the recovery certificate (R.C. No. 53/2006) issued in pursuance to the order dated 21.9.2006 of the Tribunal. Briefly stated, the relevant facts are that the respondent-Bank had filed an application (O.A. No. 108/2002) before the DRT below under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the RDDBFI Act) against the appellants for the recovery of Rs. 4,11,23,065.69 along with costs and pendente lite and future interest. The O.A. was allowed ex parte, vide order dated 21.9.2006, which was assailed in appeal before this Tribunal along with application for waiver of pre-deposit required under Section 21 of the said Act. This Tribunal, vide order dated 14.3.2007, rejecting the waiver application of the appellants, directed them to deposit 75% of the amount of debt due as determined by the Tribunal below, for entertaining the appeal. The appeal was not entertained as the amount was not deposited, as ordered.

The appellants, however, filed Writ Petition No. WP(C) No. 2939/2007 against the order of this Tribunal before the Delhi High Court. During the course of hearing of that petition, on 19.12.2007, the petitioner/appellants and the respondent-Bank agreed to settle the matter and it was agreed that a total amount payable as on 1.10.2000, as NPA, would be Rs. 3,17.36,403/-. On this amount, the petitioners agreed to pay interest at PLR prevailing from time-to-time and they were allowed adjustment of the amounts made thereafter. The petitioner/appellants were to pay the entire amount by 31.3.2008 and in case the amount could not be paid by that date, they were allowed two months' time up to 31.5.2008 and for that period they agreed to pay interest w.e.f. 1.4.2008 @14% per annum or PLR, whichever was higher. The Hon'ble Court disposed of the petition accordingly. The appellants, however, neither paid the agreed amount to the respondent-Bank within the agreed period nor within the extended period allowed by the High Court by order dated 2.7.2008.

Recovery Certificate (R.C. No. 53/2006) was issued in pursuance of the order dated 21.9.2006 of the Tribunal and in execution thereof, the Recovery Officer had ordered for the auction sale of the mortgaged property. The CD/ appellant No. 3 filed appeal (Appeal No. 16/2010) before the DRT below challenging the order of the Recovery Officer. The learned Presiding Officer of the DRT, vide order dated 23.8.2010, directed the CD/appellant to deposit Rs. 50 lacs, which was deposited by him vide cheque dated 29.10.2010. The learned Presiding Officer directed the CD/appellant to make a deposit of Rs. 1,00,73,617/- to the CH Bank before 31.12.2010 as the CD had demonstrated the said amount as outstanding on the basis of a statement filed by him. Aggrieved with that order, the CH Bank preferred an appeal before this Tribunal and this Tribunal, vide order dated 21.12.2010, after setting aside the impugned order remitted the matter back to the Tribunal below with a direction to decide the appeal within the given time-frame. The learned DRT, vide order dated 15.2.2011, passed on an application filed by the CH Bank, directed the CD/appellant to deposit a sum of Rs. 3.5 crores by 31.3.2011, failing which, the appeal was ordered to be dismissed. This order was, however, challenged by the CH Bank before this Tribunal in appeal (Appeal No. 160/2011) and this Tribunal, vide order dated 29.8.2011, allowed the appeal and directed the DRT to reconsider and dispose of the application within 30 days. In compliance of the said direction, the DRT below has disposed of the appeal by the impugned order with the direction, as mentioned above.

Mr. Gautam Gambhir, appellant No. 3, arguing the appeal in person for the appellants, contended that the appellants had always tried to amicably settle the dispute with the Bank and out of seven loan accounts, six had been so settled and the due amount qua those accounts had been paid. He further submitted that he had settled the present loan account also before the Hon'ble Delhi High Court on 19.12.2007, but as he did not succeed in selling any of his properties, he could not make the payment to the Bank as per term of the said settlement. He also submitted that even thereafter he made several settlement proposals through letters improving upon earlier offers, but all those offers were declined by the Bank, however, in reply to his proposal dated 18.4.2010 for Rs. 497 lacs, the Bank, though declining the proposal, yet by letter dated 2.8.2010 had expressed the view of its High Level Settlement Advisory Committee that the appellants should have honoured the settlement earlier approved by the competent authority as per the direction of the Hon'ble High Court of Delhi with delayed period interest and it was also suggested that if the appellant was still interested in pursuing the settlement proposal then he should deposit Rs. 50 lacs as upfront payment to show his bona fide. Mr. Gambhir submitted that he had conveyed his acceptance to that offer by letter dated 14.8.2010 and deposited Rs. 50 lacs, though not in one lump sum. He further submitted that he is still ready to pay the outstanding amount as per order dated 19.12.2007 of the Hon'ble High Court, along with interest @ 14% per annum or at PLR, whichever is higher or as per offer dated 2.8.2010 of the respondent-Bank. It has been pointed out by him that he has already deposited about Rs. 2.92 crores till date.

Mr. H.P. Bhardwaj, learned Counsel appearing on behalf of the respondent Bank, on the other hand, submitted that the appellant could not indicate any infirmity or illegality in the order impugned and had only stressed that the matter be settled as per the High Court's order dated 19.12.2007, but since the appellants themselves had not complied with the said order within the given time and the Bank had withdrawn that settlement therefore, they cannot take the advantage of that order. He also contended that the settlement offer made by the Bank through its letter dated 2.8.2010 had never culminated into a complete contract as the appellant, in his reply dated 14.8.2010 to that letter, had made the acceptance conditional by saying that he needed eight months' moratorium period before starting the payment of amount as during this period he was to start some banquet business and he himself scheduled the repayment in eight quarterly instalments starting from April, 2011 ending March 2013 with simple interest @ 12% per annum on reducing balance. His contention is that as the acceptance of the appellant was not absolute or unqualified, therefore, no formal contract was formed and the Bank is not obliged to act as per that offer. Mr. Bhardwaj, in support of his contention, relied upon the judgment rendered in the cases of Union of India v. Uttam Singh Dugal and Co. (Pvt) Ltd., AIR 1972 Delhi 110 and Vishwa Industrial Company Pvt. Ltd. v. Mahanadi Coalfields Ltd. & Ors., AIR 2007 Ori. 71, wherein the Hon'ble High Courts, while interpreting Section 7 of the Contract Act, had observed that the acceptance of offer must be absolute and unqualified and where there is any variation or any condition is attached, it would be a counter proposal and cannot be said to be an unqualified or absolute acceptance and would not result in the formation of a formal contract.

A perusal of the record shows that an amount of Rs. 2,91,84,561/- has already been deposited by the appellants to the Bank qua the loan in question as is evident from the calculation-sheet filed by the Bank in pursuance of the order dated 29.2.2012 of this Tribunal. This circumstance supports the appellant's contention that he wants to amicably settle the dispute with the Bank. However, it also appears that in pursuance of the Hon'ble High Court's order dated 19.12.2007, the competent authority of the Bank had approved the settlement proposal as directed by the Hon'ble Court and the appellant No. 3 was informed of the same by letter dated 4.2.2008, which was indisputably served upon him, and in the said letter it was made clear that in case the appellants failed to deposit the amount by 31.5.2008 or to comply with the directions of the Hon'ble Court, the settlement would stand withdrawn and the entire amount of debt with up-to-date interest would become recoverable through legal process. It is also an undisputed fact that the appellants had not complied with the terms of the order dated 19.12.2007 and as such they cannot get the benefit of the said order now.

I am convinced with the contention of Mr. Bhardwaj that as the alleged acceptance of the Bank's proposal dated 2.8.2010 was not absolute or unqualified and was conditional to the effect that the payment of the amount was to be made within certain period and was in the form of a counter offer, therefore, the contract was not legally concluded and as such the Bank cannot be compelled to act in accordance with the said offer.

Although there appears to be some factual incorrectness in the description about the order dated 19.12.2007 of the Hon'ble High Court made in para 4 of the judgment that "the settlement was arrived at for a sum of Rs. 559.25 lacs plus interest @ PLR 13.25% simple w.e.f. 1.1.2008 to 31.3.2008 and in case of delay of sale of two properties, further period of two months, i.e., upto 31.5.2008 was granted along with interest @ 14% simple or PLR simple whichever is higher w.e.f. 1.4.2008 till 31.5.2008", yet merely on that ground the impugned order cannot be interfered with as the learned Tribunal below has not made the impugned order on its basis and has only observed that the appellant had not complied with that order.

The order dated 21.9.2006 of the Tribunal below allowing the Bank's application under Section 19 of the RDDBFI Act has attained finality as it has not been set aside by any competent forum till date and the learned Recovery Officer is proceeding in accordance with the recovery certificate issued pursuant to that order and bids have been received in the auction sale of one of the mortgaged properties but since no illegality or infirmity has been pointed out either in the order of the Recovery Officer or in the impugned order of the learned DRT, the appeal has no substance and is liable to be dismissed.

The appeal is accordingly dismissed without any order as to cost. The Recovery Officer may proceed in accordance with law in respect of the sale of the mortgaged property. The interim order stands vacated. Copy of this order be furnished to the parties as per law and be also sent to the DRT concerned.