STATE BANK OF INDIA Vs. MCLEOD AND CO LTD
DEBTS RECOVERY APPELLATE TRIBUNAL
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(1.) THE State Bank of India filed Original Application No. 209 of 1996 against the defendants for recovery of its debt. In pursuance of order dated 4th June, 2001 certificate for recovery was issued on 20th June, 2001 by the then learned Presiding Officer of this Tribunal for the recovery of certificate amount of Rs. 1,92,01,017.40 (Rs. one crore ninety-two lakh one thousand seventeen and forty paise) from the defendants/certificate debtors jointly and severally together with interest thereon @ 9% per annum from the period 1st June, 1972 till the date of actual realization.
(2.) Since under Sub-section (2) of Section 7 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as RDDBFI Act) the learned Recovery Officer discharges his functions under the general superintendence of the learned Presiding Officer. As such during the pendency of the recovery proceedings he vide his order No. 34 dated 28th February, 2005 has referred certain issues for the direction of this Tribunal which is obvious in his following observations in the said order No. 34 dated 28th February, 2005:
The learned Advocate for the Bank submits that a petition was filed on 14th October, 2004, wherein it was submitted that subsequent to the issuance of the certificate for the sum of Rs. 1,92,01,017.40 plus interest @ 9% per annum from 1st June, 1972 the certificate debtor No. 1 was informed by the Bank, by its letter dated 26th February, 2003 that the certificate debtors are eligible for settlement under RBI guidelines and also set out terms of the such settlement, inter alia at a sum of Rs. 1,97,59,566.86 p. It is further submitted that the certificate holder Bank in course of recovery proceeding and by virtue of attachment order of rents from the tenants, at the properties of certificate debtors, collected a sum of Rs. 22,15,308.90 p. which has been appropriated towards part satisfaction of the Bank's dues and also certificate debtors had deposited a cheque of Rs. 27,25,0007- as upfront payment towards the said settlement. There has been a further payment of Rs. 3.5 lakh by the certificate debtors as part reimbursement of legal expenses incurred by the Bank. It is also submitted that in the meantime certificate holder Bank was notified by clarifications from the R.B.I., wherefrom it appears that the instant case is not covered under the clarifications made by R.B.I. as the decree had already been passed.
Learned Advocate for the certificate debtor No. 1 points out that the circular dated 4th August, 2004 issued by the department of circle credit officer of certificate holder Bank, stipulates that R.B.I. have clarified that the cases in which decree has already been passed the Banks can straightway execute the same and recover the dues and the R.B.I. circular on OTS-2003 dated 29th January, 2003 does not cover the case where decrees have already been passed, The learned Advocate of the certificate debtor No. 1 also submits that it has also been clarified in the said circular, that the compromise already entered into decreed cases by the branches would not be affected by the aforesaid R.B.I, clarifications. However, such compromise has already been settled by the branches as per norms of R.B.I. OTS-2003 will now be treated as settled under Banks normal scheme of compromise settlement instead of R.B.I. OTS-2003. According to learned Advocate of the certificate debtor No. 1 the clarifications laid down in the said circular letter are sufficient for certificate holder Bank to accept the proposal for compromise settlement and the question of resuming the recovery proceeding does not arise at all. It is felt that the arguments put forward by the learned Advocate for the certificate debtor No. 1 has enough substance to accept the proposal. However, in view of the technical peculiarity and also that the compromise settlement has been approved at an amount less than the amount of certificate, the matter is referred to the learned Presiding Officer for appropriate direction.
Submitted for favour of order by the learned Presiding Officer.
After the said reference this Tribunal directed the learned Registrar of the Tribunal to notify the parties after fixing a date before this Tribunal for hearing on the issues raised in the aforesaid order of the learned Recovery Officer. It appears from the order No. 36 dated 10th March, 2005 of the learned Registrar of this Tribunal that the parties were informed and the matter was fixed for hearing before this Tribunal. Thereafter the matter was heard on 13th July, 2005 by this Tribunal.
(3.) I have heard the learned Advocate Mr. S.N.P. Bhatta for the applicant/certificate holder Bank and the learned Advocates Mr. D. Basu Roy and Mr. N. Srinivas for the defendant/certificate debtor No. 1 at length and considered the reference made by the learned Recovery Officer vide Order No. 34 dated 28th February, 2005.;
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