KRUPANIDHI EDUCATIONAL INSTITUTION Vs. BANK OF BARODA
LAWS(DR)-2003-3-15
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on March 25,2003

KRUPANIDHI EDUCATIONAL INSTITUTION Appellant
VERSUS
Bank of Baroda And Ors. Respondents


Referred Judgements :-

STATE OF PUNJAB NOW HARYANA VS. AMAR SINGH [REFERRED TO]


JUDGEMENT

A. Subbulakshmy, J. - (1.)THE Bank filed Original Application (OA) against the defendants and the OA was allowed and recovery certificate was also issued. The appellant is not party to the OA. The appellant filed IA -1/2001 for withdrawal of recovery certificate contending that an agreement of sale was entered into between this appellant i.e. M/s. Krupanidhi Educational Institution and the borrower the 1st defendant and in pursuance of the sale agreement, at the request of borrower, the appellant has paid a sum of Rs. 50 lakhs to the respondent Bank and the appellant is prepared to discharge the entire loan amount to the Bank and the title deeds deposited with the Bank may be returned to the appellant. The Presiding Officer, DRT, by order dated 31.1.2002 dismissed that petition holding that the Tribunal will not have jurisdiction to grant relief to the 3rd party who has no privity of contract against the applicant Bank. As against that order the appeal is preferred by the 3rd party Krupanidhi Educational Institution.
(2.)COUNSEL for the appellant submitted that an agreement of sale was entered into between the defendant Sri. Ramothar Kedia, and the appellant M/s. Krupanidhi Educational Trust and one Sri. Nellappa and by virtue of the sale agreement the appellant has paid a sum of Rs. 50 lakhs to the Bank for due discharge of the loan of the 1st defendant and the appellant is also having a Demand Draft for the balance of the amount due to the Bank and the Bank may be directed to receive the Demand Draft and hand over the title deeds to the appellant. In the agreement of sale it has been set out that the defendant borrowed loan from Bank of Baroda and he having defaulted in repayment to the Bank, the Bank had instituted recovery proceedings before the DRT and the DRT has issued a recovery certificate directing the defendant to pay a sum of Rs. 1,13,00,000/ - and the defendant had agreed to sell the Schedule mentioned property to the appellant and the appellant is in complete possession of the Schedule property except some shops. With regard to the 3rd party mentioned in the agreement, the defendant has also entered into an agreement with the children of the 3rd party under an agreement of sale dated 3.11.1995 and has received Rs. 80,00,000/ - as advance. It is also stated in the agreement that the 3rd party has no objection for selling the Schedule property in favour of the appellant Krupanidhi Educational Trust, by the defendant. The terms and conditions set out in the agreement is that -
(1) The 1st party and the 3rd party have agreed and undertaken that they would negotiate with the Bank of Baroda to settle the claim for a lesser amount than the amount that is decreed for, they have also assured that in view of the latest RBI guidelines, they would persuade the Bank to accept a sum of Rs. 49,70,000/ - as full and final settlement of the Bank's claim.

(2) The 1st party and 3rd party have agreed to obtain such assurance by the Bank in writing and produce the same to the 2nd party and on production of the said document, the 2nd party shall make arrangements to pay the said amount on behalf of the 1st party.

(3) It is agreed that on payment of the amount as aforesaid, by the 2nd party to the Bank, the 1 st party hereby authorises the 2nd party to collect and take possession of all the original documents of title to its custody.

(4) In the event of the 1st party and 3rd party failing to discharge any of their obligations so cast on them in supra, the agreement shall not have any effect at all and the 1st party hereby undertakes to reimburse the expenses that has been actually incurred by the 2nd party in connection with the preparation of documents, scrutiny of documents, advertisements, etc.

(5) The 2nd party agrees that on receipt of the letter from the Bank of Baroda for one time settlement and after receipt of the original documents of title from the Bank of Baroda, the 2nd party is at liberty to raise loan on the strength of the documents and it shall complete its obligation of paying the balance of sale consideration and registering the sale deed within three months from this day.

The defendant borrower issued letter through his Counsel to the appellant stating that there exists a sale agreement and the appellant has already paid a sum of Rs. 30 lakhs to Bank of Baroda during the course of pendency of the Writ Petition No. 4212/2001 and on 10th July, 2001 the Hon'ble High Court of Karnataka in WP No. 26266/2001, has ordered the borrower to pay another sum of Rs. 20 lakhs to the Bank of Baroda in respect of his debt and in that letter the borrower has requested the appellant institution to pay the said sum of Rs. 20 lakhs to Bank of Baroda on behalf of the borrower immediately, as the same is agreed by the borrower in the said sale agreement dated 10.2.2001. So, in pursuance of the agreement of sale and at the request of the borrower through his Counsel's letter dated 14.7.2001, the appellant institution has paid a sum of Rs. 50 lakhs to Bank of Baroda. It is also evidenced by the Banker's Cheque dated 15.2.2001 and 31.7.2001. So, the appellant educational institution has paid a sum of Rs. 50 lakhs to the Bank of Baroda. It is also evidenced by the Bank of Baroda statement sent to the 1 st defendant dated 5.9.2001.

(3.)COUNSEL for the appellant submits that after this payment of Rs. 50 lakhs by the appellant institution to the Bank, there is a balance of Rs. 63 lakhs due to the Bank and the appellant is having the Demand Draft ready with him for payment to the Bank and even after paying the entire amount due to the Bank, there is a balance of Rs. 20 lakhs and the appellant is prepared to the balance amount of Rs. 20 lakhs to the borrower the 1st defendant and the Bank may be directed to hand over the title deeds to the appellant after the Bank receives the DD for Rs. 63 lakhs.


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