ANDHRA BANK Vs. PRAKASH ELECTRONICS
LAWS(DR)-2004-7-12
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on July 15,2004

Appellant
VERSUS
Respondents

JUDGEMENT

D.C.Thakur, - (1.) WHEN each of the six defendants brought on record on Monday, January 13, 2003 by the applicant Bank has been found in making constructively an admission of the debt liability towards the said Bank in the clear, unambiguous, unconditional and unequivocal words and when the defendants have been found in making such admission by way of an application made in writing on Monday, September 8, 2003 being subsequent to that this Tribunal has already received the evidence from the applicant Bank against those defendants in connection with the said claim case instituted by the said Bank; and it has received further a number of fourteen documents including the acknowledgement of debt made by those defendants on June 7, 1999 (being the Exhibit No. 12), this Tribunal has been pleased to issue on Wednesday, April 7, 2004 one direction upon the said Bank to file one affidavit before itself wherein shall be succinctly Contained the following material information: "(i) Whether any penal interest has been calculated, charged and imposed by itself, at any point of time; (ii) Whether any compound interest has been charged and levied by itself on the due date of payment contrary to the contract inter se; (iii) Whether such rate of interest has been in contravention of the RBI prescribed rate of interest; (iv) The date of transfer of the account of the defendant to the Protested Bill Account; and the outstanding amount due and recoverable on that date from the defendants." The reason why this Tribunal has been pleased to issue the above direction may be revealed from the fact that the Bank has been unable to avail itself of the above categorical admission so made by the defendants. Though the law so envisaged that to record such admission and thereafter to pronounce judgment on the basis of such admission is permissive in nature and does not preclude a party (like Bank) (which does not avail itself of the above and proceeds to trial in an ordinary way from relying at trial on admission made by the opposite party), the consensus amongst the judicial opinion has been found on the point: the power to record admission first and then pronounce judgment on admission "either in the pleading or otherwise, whether orally or in writing", lies within the jurisdiction of an adjudicating Court notwithstanding the use of the word "otherwise" specifically used in Rule 6 of Order XII of the First Schedule to the Code of Civil Procedure, 1908 (Act No. V of 1908) which implies and indicates that it is open to the Court to pass its judgment on statement made by a party before it not only in pleading but also de horing the pleading. The above factual finding has been founded on the clear, unequivocal language used in the draft proposal for liquidating the dues of the applicant (which is not a form of pleading or equivalent to it).
(2.) Here the admission by those six defendants has been understood from the standpoint of a man of ordinary prudence, because a man with ordinary prudence shall be able to infer that those defendants have not been found in traversing and disputing the allegation brought against them in its application by the applicant Bank when the said man shall read the following language expressly used in the said draft proposal received on Monday, September 8, 2003: "The respondents had availed the credit facilities opened by way Cash Credit to the limit of Rs. 20, 00, 000/- with the applicant Bank in April 1998 and the same was sanctioned by the applicant by a letter of sanction dated 13th April 1998. It is stated that out of the said amount of Rs. 20, 00, 000/- the respondent have already paid an amount of Rs. 11.96 lacs in July 2001. The respondents were then supposed to pay the balance amount of Rs. 8 lacs only to the applicant Bank but due to financial stringencies the respondents were unable to settle the dues in full and final settlement and in the meantime the applicant Bank had then moved the above application and obtained the said order for appointment of Receiver. It is now stated by the respondents that the respondents wish to avoid unnecessary litigation and want to settle their dues. However, by a notice dated 28th February, 2003 the Manager of the applicant Bank informed the respondents that as per the RBI guidelines for recovery of dues relating to non-performing assets, the liability of the respondents will be fully discharged if the respondents are to pay an amount of Rs. 13, 66, 352.14 to the applicant. It is now the proposal of the respondents that the respondent are willing to pay an amount of Rs. 6 lacs as had been initially agreed by and between the applicant and the respondent in full and final settlement of all its dues. It might not be out of context to mention at this juncture that the respondents are going through heavy financial crunch and the factory of the respondents had been and is still not operational for over a period of three years and as such the respondents are not in a position to pay their dues and this irregularity or lapse is not intentional but because of certain situations which is beyond their control." Not only that, the claim that since the factory of the defendants has not been run for the consecutive three financial years those defendants have been compelled to go through heavy financial crunch has been necessarily lent support by the Receiver appointed, in his report, particularly which reads as follows: "It appears from the godown that factory is closed because all the machineries, tools and apparatus are covered with the dust and it is also reported by the said Rampuria that the said factory is closed." But the issue of fact as well as of law whether the applicant Bank shall be entitled for a Certificate of Recovery for a sum of Rs. 16, 34, 071.14 p. against those defendants with further interest thereon which has become due and recoverable from the latter because of the enjoyment by the defendant No. 1 as a partnership firm consisting of the defendants No. 2, 3, 4 (hereinafter referred to as the partners of itself), of the open cash credit to the limit of Rs. 20 lakhs and a cheque/bill purchase to the limit of the equal amount to be payable with interest (April 6, 1998 being the date of sanction) is equally becoming needless to be framed, dealt with and lastly decided by this Tribunal in view of the clear, specific and constructive admission made by those defendants on September 8, 2003, being on the record of itself. Though in the evidence on affidavit submitted on July 23, 2003 it has been vehemently alleged by the applicant Bank that till date the defendants have not in the present case presented any written statement required from themselves, the presentation of such written statement by those defendants shall lead to the unnecessary complication of OA/3/ 2003 initiated by the said Bank for the recovery of the said amount of itself.
(3.) AFTER receiving the above "draft proposal" on the day and date mentioned above, this Tribunal has been specifically of the view that those defendants have been with the intent of avoiding the unnecessary litigation as well as are desirous of settling the current account which has been at one point of time opened by the defendant No. 1 for the purpose of dealing in manufacture of electronic components and appliances under the name and style of "M/s. Prakash Electronics". That is why the words- "It is now stated by the respondents that the respondents wish to avoid unnecessary litigation and want to settle their dues". are being reproduced with emphasis.;


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