Decided on July 02,2004



Ronojit Kumar Mitra, J. (Chairperson) - (1.) THIS appeal has been preferred from an order dated 15th December, 2003 made by the learned Presiding Officer, DRT-1, Kolkata hereinafter referred to as "the DRT'. The appellants were aggrieved that the DRT had chosen to ignore the concluded oral agreement between the parties, and had wrongfully directed the issuance of a certificate in favour of the Bank. The Bank's contention was that no oral agreement was ever concluded between the parties, and no effect was given to the alleged settlement, and consequently the Bank was entitled to and the DRT had, in accordance with the law, issued the certificate in its favour.
(2.) It was submitted by Advocates for the appellants, that in the oral agreement the parties had unequivocally settled their disputes in the claim petition, and that the Bank had agreed to receive from the appellants a sum of Rs. 54 lacs, in full and final satisfaction of its claim. He contended, that on the stipulated date the appellants had tendered a sum of Rs. 15 lacs, instead of the agreed amount of Rs. 25 lacs, which the Bank did not accept, but that the Bank had represented that it would wait till the appellants could arrange to pay the entire amount of Rs, 25 lacs and accordingly the agreement between the parties continued to remain valid and binding. He argued, that soon thereafter the appellants had intimated the Bank by a letter dated 20th June, 2002, that the appellants had arranged for funds and that they were ready and willing to pay the first instalment of Rs. 25 lacs. He relied on two further letters dated 4th July, 2002 and 8th July, 2002 written by them to the Bank, and submitted that in spite of their repeated requests to receive the payment, the Bank had remained silent and the payment was not allowed to be made. He argued, that the appellants were, at all material times ready and willing to pay in terms of the settlement as envisaged in the oral agreement. In support of his submissions he cited and relied on a decision reported in AIR 1961 Cal. 359. The appellants were fully aware at all material times that there was in fact no oral agreement which was or could be lawfully binding on the parties, it was argued by Advocates for the Bank, and that accordingly the appellants had refrained from pleading the agreement or pray for its enforcement. He contended, that while negotiating settlement, the appellants knew that the Bank's representative was not authorised to assent to any proposal for settlement of the Bank's dues, but that any acceptance by him would be subject to the approval of the Bank's higher authorities. Besides the fact that the proposal for settlement was not approved by the Bank, he submitted, the appellants had admittedly failed to comply with the terms of the alleged settlement and the settlement, if at all, must be considered to have failed and the Bank was entitled to a certificate for its whole claim. He argued, that the suit for eviction of the Bank, which the appellants had instituted and was pending before the Delhi High Court, had made it further clear that the appellants did not intend to settle the Bank's claim but to litigate. In support of his submissions he cited and relied on a decision reported in AIR 1968 SC 1355.
(3.) IN those circumstances I have no hesitation to hold that even if a concluded oral agreement between the parties could be assumed, the default clause came into operation immediately upon the admitted failure by the appellants to pay the first instalment of Rs. 25 lacs, and in terms of the agreerhent the Bank became entitled to a certificate for its entire claim. It was not the case of the appellants that the agreement thereafter had revived. It was a mere assertion on behalf of the appellants that the Bank had agreed to wait and that the oral agreement continued to be valid and binding between the parties. There was not an iota of evidence in support of the contention. One of the directors of the appellants, in his evidence before the DRT, had deposed, "that on 31st May, 2002 or any time thereafter, the defendants did not send the whole amount of Rs. 25 lacs to the Bank as the Bank was simultaneously to give the ground floor of the premises at Jor Bagh, New Delhi, upon receipt of the said payment". The conduct of the appellants was not in consonance with their alleged offer to pay in terms of the oral agreement for settlement. There was no explanation as to why instead of tendering the sum of Rs. 25 lacs to the Bank, the appellants should continue to write letters, offering to pay. There was no evidence of any sort that the appellants at any material time had the requisite funds to pay. IN his evidence the director of the appellants had further deposed that, "We have not submitted any document to show that the sum of Rs. 25 lacs was kept by us for payment to the Bank". It would therefore transpire, would it not, that the alleged oral agreement, if at all, stood terminated on the appellants' default in payment of the first instalment and in accordance with the conditions thereof the Bank became entitled to receive me full amount of its claim. The appellants by reason of their reliance on the alleged oral agreement must be understood to have admitted their debts to the Bank and the DRT had. in accordance with law correctly issued the certificate in favour of the Bank for the whole claim. It was significant that the learned Presiding Officer had considered in particular the issue as to "whether the oral agreement as alleged and pleaded by the defendants in their amended written statement deserves to be taken cognizance of, for passing the certificate accordingly".;

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