KOTHARI INDUSTRIAL CORPORATION LTD Vs. HDFC BANK LTD
LAWS(DR)-2003-2-5
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on February 26,2003

Appellant
VERSUS
Respondents

JUDGEMENT

A.Subbulakshmy, - (1.)THE PO, DRT-I, Chennai, passed Order on 12.7.2002 directing the defendants to pay the admitted loan liability of Rs. 2,35,00,000/- and legal fees of Rs. 1,14,873.33 P as stated in Paras 3 and 4 of the Reply Statement, by four weeks failing which an Interim Recovery Certificate will be issued. That Order is being challenged now in this appeal. It appears from the records that subsequently since the defendants did not pay the amount as directed by the Tribunal, Interim Recovery Certificate was issued on 9.12.2002.
(2.)Counsel for the appellants submitted that the PO, DRT-I, has observed that the defendants have admitted primary liability to the extent of Rs. 2.35 crores as the admitted liability, but One Time Settlement (OTS) was arrived at between the appellants and the Bank and the matter was settled for Rs. 2.35 crores along with the legal fee of Rs. 1,14,873/- and as the matter was settled for OTS for the above said amount the order passed by the PO, DRT-I, stating the sum of Rs. 2.35 crores as to the extent or the admitted liability is not correct and as per the OTS the appellant is liable to pay that amount and it cannot amount to the admitted liability to that extent alone. The PO, DRT has observed in his Order that a perusal of the Reply statement filed by the defendants shows that the defendants have prima facie admitted the loan liability of Rs. 2.35 crores and also legal fees of Rs. 1,14,873.33 P. From the Reply statement filed, the PO. DRT-I, has found that the defendants have prima facie admitted the loan liability to the extent mentioned above.
Counsel for the respondent Bank submits that the OTS was arrived at between the parties but that amount was not paid within the time mentioned under the compromise settlement and that amount cannot now amount to OTS and that OTS has fallen through. As per the compromise arrived at between the parties, a sum of Rs. 2.35 crores and the legal fee of Rs. 1,14,873.33 Pin full settlement of the dues has to be paid on or before 27.3.2001. So, Counsel for the respondent Bank submits that the settlement has fallen through and it does not survive. Counsel for the appellants relies upon the letter sent by the Bank dated 2.5.2001 and contends that the compromise proposal still survives since the Bank has directed the defendant to pay interest @ 15.5% per annum from 1.4.2001 to the date of actual receipt of the settlement amount and the legal charges of Rs. 1,14,873.33 P are to be paid by the appellant separately. Relying upon this letter. Counsel for the appellants vehemently argued that the compromise settlement still survives and as per the direction given by the Bank, the appellants are liable to pay the compromise amount with interest at 15.5% p.a. from 1.4.2001 to the date of actual receipt of the settlement amount. Even though the letter was sent by the Bank to the appellant on 2.5.2001, as per this letter also the appellant did not come forward to pay that amount with 15.5% p.a. from 1.4.2001, Counsel for the respondent Bank submitted that simply because the Bank sent that letter the appellant cannot keep quiet for number of years and say that the compromise effected still survives and the appellant is liable to pay only the amount stated under that compromise and within a reasonable time the appellant ought to have paid that amount and the appellant did not avail that opportunity and pay that amount and till now no payment has been made and the appellant is not now entitled to contend that the OTS effected is still alive.

(3.)THE defendants filed the Reply Statement on 6.9.2001. After the settlement proposal was offered and without making any payment as per the settlement compromise the appellant filed the reply statement contending that the matter was compromised for the above said amount and the appellant would settle the applicant's claim and has sought for time till 31.3.2002. Even within the time asked in the Reply Statement the appellant did not settle the claim of the applicant. Since the appellant did not pay the above said amount which has been admitted in the Reply Statement, within 4 weeks from the date of passing of the Order by PO, DRT-I, Interim Recovery Certificate was issued which Recovery Certificate has been executed and the property is being brought to auction on 5.3.2003.


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