CANARA BANK Vs. VINOD KUMAR JAIN
DEBTS RECOVERY APPELLATE TRIBUNAL
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Ranjit Singh, J. (Chairperson) -
(1.) GRIEVANCE raised by the appellant Bank is against the order passed by DRT -III, Delhi on 10.4.2012 whereby rate of interest has been reduced from 12% to 11% per annum. As per the appellant Bank the Tribunal below could not have passed order reducing the rate of interest as earlier order was a consent order on the basis of OTS proposal which was accepted by the respondent and hence he was under obligation to pay the amount due with interest @ 12% per annum. The facts noticed in brief are as under:
"The appellant Bank had filed OA No. 16 of 2009 against respondent Vinod Kumar Jain proprietor of M/s. Vikas Metals and Traders, which had been sanctioned overdraft (secured) cash credit to the extent of Rs. 50 lacs. The overdraft facility was for the purpose of wholesale trading business and manufacturing copper and PVC wires. In the OA the appellant Bank had claimed an amount of Rs. 51,74,899/ - along with contractual rate of interest."
(2.) RESPONDENT Vinod Kumar Jain approached the Tribunal below by filing S.A. under SARFAESI Act for quashing and setting aside of notice of demand, which was served on him by the Bank. During the pendency of O.A. filed by the appellant Bank and S.A. filed by the respondent, one -time settlement had taken place. Mr. H.C. Issan, Chief Manager had addressed a letter to the respondent wherein terms and conditions were proposed for one -time settlement. Terms and conditions as proposed in this letter dated December 31, 2009 are as under :
"(1) The total amount of proposal is Rs. 40.25 lacs (Forty lacs twenty five thousand only) out of which Rs. 2.00 lacs has already been paid and adjusted to be account, the balance of Rs. 38.25 lacs has been prescribed to be payable as under :
(i) Rs. 15 lacs within fifteen days from the date of this letter i.e. 21.10.2009.
(ii) Rs. 23.25 lacs on or before 31.12.2009.
(iii) Interest at the rate of 12% (simple) w.e.f. 31.1.2009.
(2) You have to withdraw suit/case filed against the Bank, if any.
(3) Bank reserves the right for withdrawal of the OTS sanctioned at any point of time even during the period permitted for payment of OTS without assigning any reasons for withdrawal of OTS.
(4) OTS sanction stands automatically withdrawn if you default in making payment of one or more installments/OTS in full as permitted and Bank reserves the right to proceed as it deems fit including proceeding legally for money of entire dues.
(5) In the event of Bank finding the misrepresentation of the facts by you Bank reserves the right to withdraw the OTS permitted and can proceed legally for recovery of entire dues.
(6) In the event of non -compliance of any of the terms of sanction by you the OTS permitted stands automatically withdrawn without assigning any reasons for the same.
(7) The OTS is without prejudice to the right of CBI to prosecute the pending criminal case to conclusion."
The respondent herein accepted the above terms and conditions. His statement was also recorded which reads as under :
"I accepted the amount of Rs. 38.25 lacs under OTS subject to the time extended up to March 31, 2010."
(3.) THE Tribunal below accordingly observed that in the interest of justice. Chief Manager of the Bank was appointed to receive symbolic possession over the secured asset, which was mortgaged property. Apart from above, the Tribunal below had observed in the order as to what would happen in case any party failed to comply with the OTS proposal. The Bank on receipt of the payment was to issue "No Due Certificate" in respect of the open cash credit account and was to release the title deed to the respondent after obtaining from him Certificate of Acknowledgement. Interest of the Bank was also protected by the Tribunal below by observing that if the Bank was not paid due amount it shall be entitled to a Certificate of Recovery for the remaining portion of its claimed amount along with contractual rate of interest from the date of filing till full recovery against the respondent herein. Another rider was attached to the effect that the Bank in that event shall file one application after having served a copy there of upon the respondent herein at least seven days before the appropriate order could be passed in connection therewith. The Registrar of the Tribunal was directed to place before the bench the draft copy of the above certificate for all its correction and issuance Consented rate of interest was 12% which was agreed to in the OTS proposal. While disposing of the OA and SA, the Tribunal below however, had observed that this consented rate of interest of 12% was truly on the higher side and gave liberty to the respondent herein to approach the Bank for its suitable consideration.;
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