Ruchi Impex vs ICICI Bank Ltd.

P.K. Bhasin, J

Bank of Rajasthan had granted financial facilities to appellant M/s. Ruchi Impex but it defaulted in repayment of the Bank's dues as per the terms and conditions of the loan and accordingly its account was declared Non Performing Asset (NPA) and when this firm did not repay the loan amount to the said Bank Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), Bank of Rajasthan had filed an Original Application (O.A.) No. 1046/2001 for recovery of a sum of Rs. 72,23,447 along with interest and costs under the Recovery of Debts Due to Banks and Financial Institutions Act, 1093 (RDDBFI Act) before DRT-II, Mumbai. In the O.A., the DRT had issued a recovery certificate for a sum of Rs. 68,79,441.20 alongwith interest @ 16.58% p.a. with quarterly rests from 1.10.2001. Subsequently, however, the recovery certificate came to be modified after the appellant herein had filed a review application (being R.A. No. 04/2007) and the recoverable amount then was fixed at Rs. 58,41,778.96. The appellant had filed then an appeal before the DRAT, Mumbai against the determination of the aforesaid amount recoverable from it and the DRAT vide its order dated 1.8.2007 in M.A. No. 120/2007 gave the benefit of adjustment of another amount of Rs. 6,40,000/- as was also being claimed by the appellant. The order passed by the DRAT is produced below:

"This appeal has been filed against the order dated 18.5.2007 passed in the review application filed before the DRT. The grievance mode in this appeal is that thought the adjustment was given for a sum of Rs. 10 lacs which was deposited during the pendency of the original application the Bank seems to have calculated interest over the sum of Rs. 10,37,662.24 and the adjustment in the interest was not given to the appellants.

The second grievance made on behalf of the appellants is that the Recovery Officer has not given credit of Rs. 6,40,000/- paid by the appellants offer the decree and the Presiding officer has mentioned that the amount paid subsequent to the passing of the decree was Rs. 4,40,000/- which seems to be a mistake.

On behalf of the respondent Bank the learned Advocate has fairly conceded that the respondent Bank is liable to give the adjustment towards the total amount of Rs. 10,37,662.24 paid by the appellants on seven different dates. He also conceded that the amount paid by the appellants subsequent to the passing of the decree is Rs. 6,40,000/- and mention of Rs. 4,40,000/- in the impugned order is a mistake and therefore the respondent Bank is prepared to give credit of Rs. 6,40,000/- to the appellants.

In view of the aforesaid admission made in respect of the both the amounts on behalf of the respondent Bank the appellants have no grievance in respect thereof.

Consequently, the recovery certificate shall be amended accordingly and the appeal shall stand disposed of.

Sd/-

(Chairperson)"

It appears that thereafter Bank of Rajasthan was taken over by ICICI Bank Ltd., respondent herein, and since the mortgaged property was in Delhi, the recovery certificate had been transferred from Mumbai to Delhi.

The case of the appellant is that even though the DRAT, Mumbai had allowed adjustment of Rs. 6,40,000/- in its favour while disposing of its appeal, but, in fact, Bank of Rajasthan did not give benefit of that, amount and because of that the appellant had to approach DRT-III, Delhi by filing an appeal (being Appeal No. 14/2009) and in that appeal the DRT passed the following order in favour of the appellant on 18.4.2012:

"Chamber Appeal filed vide diary No. 3763 dated 13.11.2009.

This chamber appeal has been filed by the appellant for seeking appropriate direction for refund the excess Court fee of Rs. 29,750/- in the aforesaid appeal filed on 9.11.2009 vide diary No. 3710.

Heard the learned, Counsels for both the parties and this chamber is allowed in view of the judgment dated 25.8.2009 passed by the Hon'ble High Court of Delhi in WPC(C) 7205 of 2007 in the matter of Balkishan Bansal v. Jammu & Kashmir Bank Ltd. and the learned Registrar of this Tribunal is hereby directed to refund the excess Court fee to the appellant herein in accordance with law.

Appeal No. 14 of 2009

After hearing both the parties at length, I hereby direct the Bank to give adjustment of Rs. 6.40 lacs to the appellant herein in view of the judgment dated 1.8.2007 passed by the Hon'ble DRAT, Delhi and the interim order passed by this Tribunal in this appeal is hereby vacated.

With the above observations, this appeal is allowed and the same is disposed of. File be consigned to records.

Sd/-

(Ashish Kalia)

Presiding Officer, DRT-III, Delhi"

It appears that after passing of the aforesaid order dated 18.4.2012 by the DRT-III, Delhi, a settlement was arrived at between the appellant and ICICI Bank Ltd. which, in the meanwhile, had taken over Bank of Rajasthan. Copy of that memorandum of understanding has been annexed by the appellant with this appeal as Annexure A-2 and is available at page No. 33 of appeal paper book. A perusal of the said document shows that the settlement was arrived at between ICICI Bank Ltd. and Mr. Jagmohan Bagga, as proprietor of M/s. Ruchi Impex. As per the said memorandum of understanding, the appellant had agreed to pay a sum of Rs. 51 lacs to ICICI Bank Ltd. towards closure of the credit facility account of the appellant.

The appellant claims that it had paid a sum of Rs. 45 lacs to ICICI Bank on different dates from 27.11.2012 to 31.10.2013 and the Bank was asked to give adjustment of Rs. 6.40 lacs as per the orders of DRT III, Delhi and earlier order of DRAT, Mumbai but the Bank did not accede to that request of the appellant and did not return the title deeds and did not issue No-Due Certificate as per the memorandum of understanding referred to above. The appellant then filed I.A. No. 1708/2013 before DRT-III, Delhi for issuing direction to the respondent Bank to give adjustment of Rs. 6.40 lacs and also to issue No-Due certificate to the appellant and to release the original title deeds in view of the satisfaction of the recovery certificate (being TRC No. 01/2004). The respondent Bank opposed that application since the settlement had been arrived at between the parties whereby the appellant had agreed to pay to the respondent Bank a sum of Rs. 51 lacs and the respondent had given up its claim for the balance amount recoverable under the recovery certificate and further that as per the direction of the DRT it had given the benefit of adjustment of Rs. 6.40 lacs to the appellant and only thereafter settlement had been arrived at. It is the further case of the appellant that the DRT had directed the respondent Bank to file a statement of account showing the said adjustment which it was claiming to have been given to the appellant and even though thereafter an affidavit was filed by the respondent Bank on 19.11.2015 but that was silent about the adjustment of the said amount.

The learned DRT, vide its impugned order dated 5.4.2016 rejected the application of the appellant for giving direction to the respondent Bank to give adjustment of Rs. 6.40 lacs to the appellant. That order is also being reproduced below:

"1. The present application has been filed by the applicant praying therein to issue necessary directions to the respondent F1 to give the adjustment of Rs. 6.40 lacs and to issue no due certificate to the applicant and consequently the original title deeds in view of the satisfaction of recovery certificate.

It has been submitted by the applicant that the Hon'ble Chairperson of DRAT, Mumbai, vide judgment dated 1.8.2007, gave its finding that the Counsel for the respondent Bank conceded that it is liable to give adjustment towards the total amount of Rs. 10,37,662.24 paid by the appellants on seven different dates as well as Rs. 6.40 lacs paid subsequent of passing of decree would also be given and disposed of the appeal with the direction for amendment of Recovery Officer. It has further been submitted by the applicant that the appellant was nut given with credit of Rs. 6.40 lacs in the amended recovery certificate and thereafter the appellant preferred an appeal.

It has been submitted by the applicant that after merger of the Bank of Rajasthan Ltd. in ICICI Bank Ltd., the applicant and the respondent Bank entered into the compromise by way of Memorandum of Understanding dated 26.12.2012 with the Bank for a sum of Rs. 51,00,000/-. It has further been submitted by the applicant that as per the MOU, after payment of Rs. 51,00,000/- to the respondent the respondent shall issue the no Due Certificate and release the original title deeds of the mortgage properties. It has also been submitted that the applicant has already deposited a sum of Rs. 45,00,000/- with the respondent from 27.11.2012 till 31.10.2013 and the adjustment of the amount of Rs. 6.40 lacs is to be given.

On other hand the learned Counsel for the respondent F1 submits that as per the recovery certificate a sum of Rs. 58,41,778.96 plus future interest @ 16.58% form 1.10.2001 is payable by the applicant but in order to avoid further litigation the respondent F1 settled this matter for Rs. 51.00 lacs after giving all the adjustment. She also submits that there is no clause in the MOU about any adjustment.

After hearing the learned Counsels for both the parties and perusing the records, this Tribunal is agreed with the submission of the learned Counsel for the respondent F1 that there is no clause in the MOU about any adjustment and even after sacrificing the huge amount the respondent F1 has entered into a settlement for a sum of Rs. 51.00 lacs with the applicant and this aspect has already been dealt with by the learned Recovery Officer. Thus, in view of the above, the applicant is liable to pay the amount as per the MOU to the respondent F1 and direct the applicant herein to deposit the amount with the respondent F1 within a period of two months without any further interest.

At this stage the learned Counsel for the respondent F1 has paid the cost of Rs. 9,000/- to the learned Counsel for the applicant.

With the above observations, nothing is survived the present application and hence the some is disposed of.

File the consigned to records.

Sd/-

(Ashish Kalia)

Presiding Officer

DRT-IIL Delhi"

Feeling aggrieved by this order of the DRT, the appellant borrower has approached this Appellate Tribunal with the same grievance which it has been raising all along that the Bank had not extended to it the benefit of adjustment of Rs. 6.40 lacs. The same grievance was urged before this Tribunal even during the course of arguments by the learned Counsel for the appellant and the submission was that even though there was a settlement between appellant ICICI Bank Ltd., but under the garb of settlement the Bank could not deny the benefit of adjustment of Rs. 6.40 lacs extended to it by the DRAT, Mumbai and then by DRT-III, Delhi also in their orders which have already been reproduced by me.

On the other hand, the learned Counsel for respondent Bank had submitted that the Bank had given due adjustment of all the payments made by the appellant but since still a lot of amount was payable by the appellant under the recovery certificate and only to relieve itself of the continuing botheration of filing one petition or the other, the appellant had approached the Bank for a settlement and it was at its request that the Bank had agreed to settle the matter by fixing the settlement amount at Rs. 51 lacs and in case the appellant had any grievance at the time of signing of the memorandum of understanding dated 26.11.2012, which was executed after the passing of the order dated 18.4.2012 by the DRT-III, Delhi, it was always at liberty to refuse to agree to a settlement for payment of Rs. 51 lacs to the Bank and could have continued its legal battle and now the Tribunal cannot reopen the settlement and ask the Bank to satisfy as to whether in fact benefit of adjustment of Rs. 6.40 lacs had been extended to the appellant or not and in any case the Bank has already cancelled the settlement because of the failure of the appellant to honour the settlement terms.

After giving my serious consideration to the rival submissions, I find merit in the submissions advanced on behalf of the Bank that the question whether the settlement amount of Rs. 51 lacs, which had been fixed with the consent of the parties, was actually fixed after giving benefit of adjustment of Rs. 6.40 lacs to the appellant or not, cannot be gone into now. It was for the appellant to have refused to accept the settlement for a sum of Rs. 51 lacs in case it was felt that the Bank was not taking into consideration the amount of Rs. 6,40,000/- while fixing the settlement amount of Rs. 51,00,000/- which it was liable to do. That was not done.

Thus, having agreed to pay Rs. 51,00,000/- to the Bank to finish off the matter once for all, which the appellant must have done after taking into consideration all the aspects of the matter, it does not lie in its mouth now to say that the matter with the respondent Bank should be closed only with the payment of Rs. 45 lacs as against the settlement amount of Rs. 51 lacs. The appellant must have calculated the amount payable by it under the recovery certificate even after the adjustment of Rs. 6.40 lacs and would have found that amount payable even thereafter to the respondent would be much more than the amount of Rs. 51 lacs agreed to be accepted by the Bank to close the chapter and only then it must have decided to settle for Rs. 51 lacs. In case settlements are allowed to be opened by Tribunals at the instance of any party to a settlement just for the asking no Bank will come forward to settle the disputes with borrowers and instead will prefer to invite judicial verdicts in respect of their claims against defaulting borrowers. I therefore, find no merit in this appeal and the same is dismissed with cost of Rs. 10,000/-.