Decided on May 09,2003



A.Subbulakshmy, - (1.)AGGRIEVED against the Order passed by the PO, DRT-I, Chennai, directing the Bank to consider the One Time Settlement (OTS) offer made by the defendants in their representation dated 23.7.2002 as per the OTS under the modified guidelines of the Reserve Bank of India (RBI) and shall make necessary compromise after receiving the balance amount from the defendants within 30 days from the date of confirmation of acceptance of the offer by the Bank and also directing the Bank to return the title deeds of the mortgaged properties to the defendants after receiving the payment under One Time Settlement scheme as full and final settlement at the earliest, the appellant Bank has come forward with this appeal.
(2.)Counsel for the appellant Bank submits that previously the matter was compromised under One Time Settlement for a sum of Rs. 40 lakhs and as per that compromise settlement the respondent did not pay that amount and that compromise fell through and it was also rejected by the Bank and matters settled once are not open for settlement under the new RBI guidelines and as the respondent did not act as per the previous compromise settlement, the benefits of the new RBI guidelines are not available to the respondent and the respondent is not entitled to invoke the new RBI guidelines and seek the Bank for settlement under the OTS Scheme. He further submitted that the respondent is a wilful defaulter and he also played fraud upon the Bank by not paying the amount to the Bank and also by not paying the amount as per the settlement proposal and also by disposing of some of the mortgaged properties. Counsel for the respondents submitted that of course the matter was compromised previously but as per the compromise the respondents did not pay that amount, now the new RBI guidelines have, come and the appellant is entitled for OTS under the new RBI guidelines even though the matter was previously settled and the settlement had fallen through. He further submitted that the new RBI guidelines also does not prohibit with regard to the enforcement of the RBI guidelines as against the borrowers who already entered into compromise and did not set as per the compromise.
The amount due by the respondent to the Bank became NPA in 1992 and the NPA amount in both the TAs is Rs. 25,88,725.178/-. During the pendency of the TAs before DRT-I, Chennai, the matter was settled between the parties in the year 1999 for a sum of Rs. 40 lakhs as full and final settlement and the entire compromise amount had to be paid by 9.8.1999. But the respondents paid only a sum of Rs. 5 lakhs in response to that said compromise out of the sum of Rs. 40 lakhs. So, the applicant Bank sent letter dated 22.11.1999 informing the respondent that the concession permitted to them had been withdrawn and requested them to pay the entire loan amount due thereon. Then, the respondent again came forward with the letter dated 17.10.2000 requesting the Bank to extend the Scheme provided by the RBI and to provide with the statement exhibiting the balance payable by him after crediting the amounts paid to the account and he has also assured the Bank to settle the amount in one lump sum within 30 days of the Scheme in full and final settlement. For that the Bank sent reply stating that as per the Bank's guidelines wherever concession has been permitted and partial amounts are recovered, such proposal cannot be now brought under the revised RBI guidelines and the party to remit the full compromise amount of Rs. 40 lakhs along with interest at PLR simple till clearance for the entire delayed period on reducing balance. Again, the respondent sent letter to the Bank on 23.7.2002 requesting the Bank to consider his request and to agree for OTS under the settlement scheme of the RBI. The appellant has set out in his letter that if the RBI guidelines in respect of the small sick units had been applied, the amount payable by him will be about Rs. 12 lakhs and he has requested the Bank not to deny the opportunity to him and settle the matter as per the new RBI guidelines.

(3.)COUNSEL for the appellant Bank strenuously argued that the new RBI guidelines is not applicable to the respondent as the compromise previously effected fell through and as per the compromise that respondent did not pay that amount and he became a wilful defaulter and once compromise is effected and if the compromise terms are not carried out by the borrower, the borrower is not entitled to seek for OTS under the new RBI guidelines. He lays stress on the Internal Circular issued by the appellant Bank in respect of this. It has been specifically stated in the Internal Circular that RBI has not dealt with these accounts wherein compromise has already been permitted and where there are no/part recoveries, hence, it is not clear whether such accounts are to be considered under the revised Scheme, if the parties represent to consider under the new scheme and in respect of that they may take a stand that the accounts falling under the following category may not be brought under the modified guidelines-
(a) Accounts wherein compromise has already been permitted/accepted by the party and where the compromise amount is fully secured by the value or security.

(b) Accounts wherein compromise has already been permitted/accepted by the parties and where there are substantial recovery and the balance compromise amount is fully covered by the value of security.

(c) Accounts wherein compromise has already been permitted/accepted by the parties and repayment period is not yet completed/repayment is as per schedule.

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