Punjab And Sind Bank vs Raman Khangura And Ors.

Ranjit Singh, J

Debts Recovery Tribunal-I, Chandigarh, while considering the prayer of the respondent No. 1 for interim relief in S.A. filed, has directed the parties to maintain status quo till the next date of hearing with the further direction that the respondent shall pay the overdue amount within month after supply of proper statement of account by the Bank after giving credit to all amounts paid by the respondent and without compounding of penal interest. Aggrieved against this order, Punjab and Sind Bank has filed the present appeal. When this appeal came up for hearing on 1.4.2013, the Counsel for the appellant Bank made a statement that the deposit of the overdue amount as directed by the Tribunal below would lead to regularization of the loan account, which would be beyond the jurisdiction of the DRT to order as the Tribunal ought to have decided the matter after completion of pleadings and evidence of the parties on the basis of grounds raised in the S.A. The submission further was that the amount has to be deposited towards the debt due on the borrower/mortgagor and not towards overdue amount.

After having got the notice issued, the Bank apparently did not take the care to attend to the case seriously as its conduct would reflect. None appeared for the Bank on 6.6.2013, which was the next date and case was adjourned to 31.10.2013. On 31.10.2013, the Tribunal did not hold any proceedings. On the next date, i.e. 20.2.2014, the Bank again remained unrepresented. The Counsel for the respondent, however, pointed out that negotiations were in progress and there was a possibility of settlement. This was one-sided submission and no one was present on behalf of the Bank to endorse or to rebut the plea. The case had to be adjourned for arguments to 4.4.2014. On this date, a proxy Counsel appeared on behalf of the Counsel for the appellant. The Counsel for the respondent disclosed despite having approached the Bank repeatedly, the Bank has not disclosed the overdue amount. Since none had appeared on behalf of the Bank, the Manager of the concerned branch was directed to remain present on the next date of hearing. He was also directed to bring details of the overdue amount as well as the statement of account. On 21.4.2014, which was the next date, neither the Counsel nor the Manager of the Bank came present. Seeing the careless and casual approach shown by the Bank, this Tribunal issued direction for the Chairman and Managing Director of the Bank to remain present before this Tribunal on 19.5.2014. This was primarily done as the impression conveyed or appeared was that the Bank was doing this to help the borrower defaulter.

Thereafter, one application after another was filed for review of the said order. When prayer for review was declined, an application seeking exemption from personal appearance of the Chairman and Managing Director was filed. Exemption was granted on the assurance of the Counsel for the appellant that the details of overdue amount and the statement of account have been supplied to the Counsel for the respondent as well as to the respondent.

The case thus is taken up for hearing today. When the Counsel for the appellant is asked to disclose the overdue amount, she still struggles to find the same and states that the statement of accounts is provided to the respondent. The Counsel for the respondent, however, states that the overdue amount is not disclosed in the statement of accounts. Both, the Counsel then enters into serious dispute in this regard. The Counsel for the Bank has placed before me a communication dated 11.3.2014 addressed to respondent No. 2, as per which the total overdue amount is shown as Rs. 10,22,01,193.63. The Counsel for the respondent has disputed the amount. In this manner and on account of casual manner depicted by the Bank, the respondent has succeeded in not paying even the overdue amount for over a period of one year. It appears that the Bank has shown no concern that it could not even realize the overdue amount due to its careless attitude despite the impugned order dated 1.3.2013. Is it a lethargic attitude of the Bank or a deliberate help to the respondents may need to be examined.

Earlier, the Counsel for the respondent had expressed his willingness and readiness to comply with the direction issued by the Tribunal below to pay the overdue amount. Non-payment was being attributed to the action of the Bank in not disclosing the overdue amount. Once disclosure dawned on him, respondent apparently is evasive in this regard. Counsel for the respondent prays for time to contest the overdue amount. This prayer is declined and the Counsel are heard on merit in this case.

In the impugned order, the Tribunal below has noticed the issues which are raised on behalf of the respondent while seeking interim relief. Having noticed the contentions raised on behalf of the respondent, the Tribunal below has held that prima facie the issue of declaring the account as NPA/substandard where the value of the secured asset is more than the outstanding amount as well as the other issue like effect of payment made by the borrower after issuance of notice under Section 13(2) of the Act, etc. are arguable issues and could be adjudicated only after completion of pleadings and evidence. Having said so, the Tribunal has directed the respondent to pay the overdue amount within one month which direction is impugned. The finding returned by the Tribunal below are not justified. Having held that the issue raised can be adjudicated after completion of pleadings, the Tribunal has passed the status quo order. This order in effect amounts to allowing the main prayer in the S.A. No order passed as interim order can be justified if it leads to allowing the main relief in the suit or proceedings The Tribunal apparently failed even to mention the overdue amount and taking advantage of the same, the respondents have been able to enjoy the benefit of status quo order which had effectively stalled the action of the Bank without putting any condition on the defaulting borrower. It is immaterial whether the value of secured asset is more than the outstanding amount and the observation that the declaration of account as NPA or substandard in this regard would be an issue apparently is a stretched view. The Tribunal below ought to have realised that the present S.A. was filed by the respondent once the Bank had taken action to recover its dues, which was in accordance with law. Directing status quo order even on payment of overdue amount more appropriately could have waited till the pleadings were complete and if the balance of convenience was seen in favour of the respondent. The Bank may be justified in making the grievance that the deposit of the overdue amount would mean deposit of due amount as condition grant of status quo order. This has led to a dispute of which the respondent has taken full advantage. Bank has thus helped the respondent by its action. Further taking advantage of the relief clause framed by the Bank, the Counsel for the respondent has stated that the relief claimed in the appeal may be allowed and beyond the relief claimed no direction can be issued by this Tribunal.

I am not much impressed with such niceties on which the respondent has sought to dependent and has relied on for his submissions. Ever since the matter has been taken up for hearing, the respondent has been pleading that the Bank has not intimated the overdue amount. Had the Tribunal stated the amount required to be deposited, this confusion could have been avoided. Once the overdue amount is disclosed, the respondents now wish to raise a contest in this regard with obvious reason and aim to avoid payment of even the overdue amount. The status quo order was passed on the condition of payment of the overdue amount. Whatever may be the situation, the overdue amount has to be paid as the respondent has not challenged this order. The respondent can enjoy the benefit of order of status quo only on deposit of overdue amount. The respondent has been able to enjoy the benefit of the status quo order without even complying with the condition imposed by the Tribunal for a far too long a period. This position is a rather discomfortable to notice. Once the Bank has disclosed the overdue amount which is to the tune of Rs. 10 crores, the respondent cannot be permitted to enjoy the status quo order without making any payment till date though respondents were to comply with the such condition within a period of one month.

I am also not much impressed with the submission that the Bank had not disclosed the overdue amount to the respondent. There is evidence which shows that on 11.3.2014 the overdue amount has been communicated to the respondent. It is stated that the Bank has conveyed the overdue amount, but has not been able to show or place on record any evidence showing that such overdue amount was intimated to the respondent. This may be a case of connivance of the Bank staff or may not be so. It is for the Bank to find out. But the Bank would certainly hold an inquiry as to why the Manager had remained absent despite order passed by this Tribunal requiring him to remain present. The action taken against him should be intimated to the Registrar of this Tribunal.

Speaking frankly, the action of the Bank under the SARFAESI Act ought to have been stayed only on the payment of the amount due. The Bank ought to have been permitted to realize the amount which is due. If the Bank had been vigilant, it could have formulated and claimed relief in appropriate manner in this appeal. The relief claimed in this appeal is so worded that it has encouraged the respondent to plead before this Tribunal that this relief may be allowed. The relief claimed in the appeal reads:

"The deposit of alleged overdue amount be held to be the deposit of due amount as a condition for grant of status quo."

I have not been able to gather as to what exactly the Bank would want to convey from this nature of relief as claimed. Perhaps the Bank is seeking direction that the overdue amount is the amount due to be recovered from the respondents and the status quo order would operate if the amount due is paid. If that was the nature of relief, the Bank could have sought clarification in this regard from the Tribunal below. Since the respondents are seen avoiding payment of the even the overdue amount which has now been intimated to the respondent, the interim order standing in their favour cannot be allowed and ought to be withdrawn.

The present appeal is accordingly allowed. The status quo order granted by the Tribunal below shall stand withdrawn. If the respondent is still willing to pay the overdue amount of Rs. 10,22,01,193.63, it may do so within a period of two weeks from today. The Bank in the meantime would be at liberty to proceed with the recovery of the due amount in accordance with law. Copy of this order be placed before the CMD and Managing Director of the appellant Bank. Registry of this Tribunal will despatch the copy to the CMD and MD of the Bank.