At, Debt Recovery Appellate Tribunal At Chennai
By, THE HONORABLE JUSTICE: A. SUBBULAKSHMY. (CHAIRMAN)
1. The appellant Bank filed the application before the DRT for recovery of Rs. 11,82,712 against the defendant. The suit was posted in the Special Drive conducted by DRT as suggested by the applicant Bank as it was a fit case for compromise. The learned Presiding Officer, DRT, has stated in his order that in the Special Drive the defendant agreed to pay Rs. 11 lakhs as full and final settlement but the Bank was not agreeable and the Bank wanted Rs. 13.60 lakhs. The Presiding Officer, DRT, found that the difference between the claim of the Bank and the defendant was Rs. 2.60 lakhs and he suggested to compromise the matter if the defendant agrees to pay Rs. 12 lakhs. The Presiding Officer, DRT has stated that the defendant agreed and paid this amount of Rs. 12 lakhs and the balance amount towards the claim of the Bankis only Rs. 1.60 lakhs. The Presiding Officer, DRT invoking Section 19(20) of the Recovery of Debts Due to Banks and Financial Institutions (RDDB&F) Amended Act 1/2001, by reducing the rate of interest found that the defendant has satisfied the claim of the applicant Bank and the defendant is liable to be discharged and accordingly discharged the defendant and ordered the return of the documents of title deeds to the defendant. Aggrieved against that order the Bank has come forward with this appeal.
2. Learned Counsel appearing for the appellant Bank submits that the appellant Bank never consented to pass decree for Rs. 12 lakhs and even though the matter was heard in the Special Drive conducted by the DRT and as the defendant never agreed for Rs. 12 lakhs, the Presiding Officer, DRT has no right to pass such order as there, was no consent on the part of the defendant for the sum of Rs. 12 lakhs. He further submitted that without the consent of the Bank the order passed by the DRT is not proper and the Bank is deprived of much benefit and the Bank is deprived of its benefit on these transactions and the Bank had to incur loss and the order passed by the Presiding Officer, DRT is not sustainable. He further submitted that there is no basis at all for settling the amount of Rs. 12 lakhs.
3. On the other hand, Counsel appearing for the respondent defendant submitted that there is no sanction letter towards the loan transaction and there are no terms and conditions and there is also no agreement for interest and in the absence of any substantial contract or agreement between the parties the Bank is not entitled to contend that and the order passed by the Presiding Officer, DRT is not sustainable. Counsel for appellant Bank submitted that the defendant approached the appellant Bank for overdraft facility and he availed the overdraft facility pending sanction of regular limit by depositing title deeds of his immovable property and since the defendant did not pay the dues regularly the Bank was obliged to file suit for recovery of the amount.
4. It is seen from the order of the DRT that the suit was posted in the Special Drive conducted by DRT it is seen from the order of Presiding Officer, DRT that the Bank wanted Rs. 13.60 lakhs. The matter was also compromised before the DRT and the Presiding Officer suggested the amount of Rs. 12 lakhs by way of compromise. The defendant had agreed and paid a sum of Rs. 12 lakhs. The Presiding Officer, DRT has found that as the applicant Bank wanted Rs. 13.60 lakhs and as the defendant has paid Rs. 12 lakhs the difference amount is only Rs. 1.60 lakhs and so by invoking Section 19(2) he has passed that order discharging the defendant from his liability. Section 19(20) of amended Act reads as follows:
"The Tribunal may after giving the applicant Bank and the defendant an opportunity of being heard, pass such interim or final order including the order for payment of interest from the date on or before which the payment of the amount is found due upto the date of realization or actual payment on the application as it thinks fit to meet the ends of justice."
The wording in this section "as it thinks fit to meet the ends of justice" indicates that to give a finality to the proceedings and as the defendant has agreed to pay Rs. 12 lakhs and in fact has paid that amount also and as the matter was posted in the Special Drive conducted by the DRT in the Adalat, the Presiding Officer, DRT has passed such order. Further, there are also no documents to show with regard to the rate of interest to be paid by the defendant to the appellant Bank. There is also no agreement setting out the terms and conditions between the parties. So, in the absence of any document between the appellant Bank and the defendant with regard to the rate of interest the appellant Bank is not entitled to contend that it has been deprived of much benefit flowing out of this loan.
5. In JT 1994(7) SC Page 108 (State Bank of India, Bhubaneshwer v. Ganjam District Tractor Owners' Association and Ors.) the Supreme Court has held that when the agreement on which the Bank's claim is founded does not provide for payment of compound interest or interest with periodical rests the petition of the Bank for claim of interest has to be dismissed on that short ground.
6. In the decision cited above, the agreement entered into between the Bank and the borrower did not stipulate the rate of interest and so it was held that the Bank is not entitled to compound interest and it has to be held in favour of the borrower.
7. In the case on hand also, there is no agreement between the parties with regard to the rate of interest. When the matter came up for consideration in the Special Drive conducted by DRT, as suggested by Presiding Officer, DRT for compromise, the defendant availed that opportunity and paid Rs. 12 lakhs and the Presiding Officer, DRT invoking Section 19(20) has passed the final order discharging the defendant. The Bank has received the entire amount of Rs. 12 lakhs and the learned Presiding Officer has exercised his discretion and he passed the final order by invoking Section 19(20) and the Presiding Officer had to invoke Section 19(20) under the circumstances that the defendant paid Rs. 12 lakhs and the difference between the amount offered by the defendant and the appellant Bank was only a small amount. In the absence of any documentary evidence with regard to the payment of rate of interest and also any substantial agreement between the parties the appellant Bank is not entitled to contend that it is entitled for more amount. Considering all the circumstances the learned Presiding Officer has passed the order in the Special Drive under the Adalat settlement. The documents of title also were returned to the defendants.
8. I see no ground to interfere in the order passed by the learned Presiding Officer, DRT, Chennai.