State Bank Of India vs Sarabjit Kaur

Ranjit Singh, J

While pleading settlement, respondent Ms. Sarabjit Kaur withdrew her S.A. filed before the Tribunal below when the Counsel for the appellant Bank stated before the Tribunal that the respondent had deposited the amount as per orders passed by the Tribunal. Aggrieved against this order, the Bank has chosen to file the present appeal. The Tribunal below had directed the Bank to return the original documents as the matter stood settled and the SA was ordered to be dismissed as withdrawn.

The plea by the Counsel for the Bank in the present appeal is that the impugned order was passed against the facts of the case and was passed exceeding the power vested in the Tribunal below.

In this case, respondent Ms. Sarabjit Kaur had availed a loan of Rs. 2.50 lacs which was repayable in monthly instalments of Rs. 6,000/- with interest @ 2.25% above PLR with minimum of 16% p.a. with monthly rests. Respondent had executed necessary security documents and had availed the loan. The house measuring 100 sq. yds. built-up was mortgaged with the appellant Bank. The account was classified as NPA in August, 2010 and the Bank, thereafter, took action under the SARFAESI Act on 16.1.2015.

On 15.7.2014, the Bank had, come out with one-time settlement (OTS) scheme for small loans. The Bank wrote to the respondent for settlement under the scheme, the loan availed by the respondent being in the category of small loan. The last date for applying for OTS under the said scheme was 30.9.2014. Those interested in the scheme were required to deposit 30% as upfront payment by 31.10.2014. The Bank later came up with plea that the Branch Manager by mistake had considered the case of the respondent eligible under the scheme and sent her letter dated 29.8.2014. As per the Bank, this scheme was not applicable to all the accounts. Rs. 3,01,454/- was payable by the respondent and under the scheme the respondent could settle the account by paying Rs. 1,32,710/-, 30% of the amount was to be deposited within 30 days of receipt of the communication and the balance was payable within 60 days. It is stated that the Bank did not receive any response within 30 days whereas the respondent deposited a sum of Rs. 40,000/- on 16.12.2014. The said amount was credited by the Bank. The appellant Bank, thereafter served notice under Section 13 of the SARFAESI Act on 16.1.2015, calling upon the respondent to pay a sum of Rs. 6.80 lacs within 60 days. No objections were received and possession notice was issued and the Bank took possession of the property on 31.3.2015. The appellant, thereafter, filed S.A. On 9.7.2015, when the S.A. was listed before the Tribunal below, the Counsel for the respondent made a statement that the respondent was willing to pay the amount and handed over some calculation stating that approximately Rs. 97,000/- was payable under the OTS. The Counsel prayed for some concession stating that respondent was willing to pay Rs. 85,000/-. For this purpose, the Counsel sought an adjournment. As per the Bank, the respondent was not eligible for the OTS scheme. The Tribunal below, still, has allowed the prayer as already noted.

It is noticed that the Counsel for the respondent had made the statement before the Tribunal on 9.7.2015 while handing over calculation that a sum of Rs. 97,000 was due as per the OTS. Besides, Counsel also pleaded for some concession and expressed his readiness to pay Rs. 85,000/-. The Tribunal found it to be a fair offer. Accordingly the respondent was asked to bring demand draft of Rs. 85,000/- on the next date of hearing. This amount was paid and the impugned order was passed on 14.9.2015.

No doubt, the Tribunal may not be justified in enforcing the one-time settlement scheme, that too, reducing the amount payable on the ground that it was a fair offer, but it is a case where a borrower who is not quite well-to-do has come forward to settle the account with the Bank. Respondent has been led to garden path by the communication addressed to her by the Bank offering one-time settlement scheme. It would not now lie in the mouth of the Bank to say that this scheme was not applicable to the case of the respondent. The Bank ought to have acquainted itself with the facts of the case before making offer. Concededly, by now the appellant has made deposit of a sum of Rs. 1.68 lac. The Bank had otherwise offered settlement of the loan account on payment of Rs. 1.32 lac. Pursuant thereto, the appellant has by now deposited Rs. 1.68 lacs. There, however, was some delay in making this deposit. If there is some delay on the part of the respondent in depositing the amount, she has made payment of a Rs. 36,000/- more than the amount offered for settlement. Would it be fair for the Bank like State Bank of India to go after such small loanee who has made payment pursuant to the offer made by the Bank? Apparently the Bank is not being fair to the respondent by backing out of the offer to settle, by pleading mistake on the part of the Branch Manager. Once the offer made has been accepted by the respondent, the Bank cannot be permitted to opt out, specially so, when it is a small loan account. As per the Bank, the amount due is Rs. 2,80,843 whereas the respondent has concededly paid Rs. 1.68 lacs against the offer of Rs. 1.32 lacs.

The Counsel for the appellant Bank would submit that the Tribunal could not have enforced this settlement in the manner it has done. This issue may not invite consideration once the Bank itself has made the offer of settlement for Rs. 1.32 lacs. It is not a case of Tribunal enforcing a settlement. Once an offer was made and accepted by the respondent, the Bank cannot be permitted to change its stand. In any event, there is hardly any substantial difference in the amount which the Bank has claimed compared to the amount which the respondent has paid. I am not inclined to interfere in the impugned order in equity and to ensure fairness in action. The issue whether the Tribunal would have jurisdiction to force settlement on the parties by reducing amount payable in terms of settlement is kept open to be decided in appropriate case. The present appeal is, however, dismissed.