CENTRAL BANK OF INDIA Vs. SHARAD RICE INDUSTRIES
LAWS(DR)-2005-12-6
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on December 19,2005

Appellant
VERSUS
Respondents

JUDGEMENT

- (1.) P.K.Deb, 1. All these appeals have been heard analogous and are being disposed of conjointly by this judgment. The appellant in all the cases is Central Bank of India, although respondents are different, but points in issue with regard to all the cases are the same and similar as have been submitted at the very outset by the learned Counsel of both the parties. Without giving much details about factual aspect of the cases, it must be mentioned that the impugned orders in these appeals have been passed on the basis of a petition filed by the respondent-defendants under Section 22 of the DRT Act read with Rule 18 of the DRT Procedure Rules and on the basis of principle of natural justice. The taking of loans by the respondents on factual aspects had not been denied and as such without filing of reply to the original application filed in the cases, petitions were filed as mentioned above for settlement of the claims on the basis of RBI Guidelines. The brief facts of the cases are mentioned below: 1. Appeal No. 69/01 (Central Bank of India v. Sharad Rice Industry). The appeal has arisen out of the final order dated 28.9.2001 in original application No. 105/01. The claim of the appellant Bank was for Rs. 51,76,453/- and order has been passed by the impugned order for issuance of recovery certificate for Rs. 8,20,000/-.
(2.) Appeal No. 70/01 (Central Bank of India v. Sunil Industry) The appeal has arisen against the final order passed on 28.9.2001 in the Original Application No. 107/01 passed by the then Presiding Officer, DRT, Jabalpur. The claim of the Bank was for Rs. 41,41,018/- with cost. By the impugned order the claim of Bank has been allowed for Rs. 6,70,000/- on the basis of RBI Guidelines. Appeal No. 70/01 (Central Bank of India v. Kishore Traders) The appeal has been preferred against the final order passed in O.A. No. 115/ 01 on 28.9.2001 passed by the then Presiding Officer, DRT, Jabalpur. The claim of the Bank was for Rs. 18,49,940/- and the claim of the Bank has been allowed to the tune of Rs. 3,45,000/-.
(3.) APPEAL No. 72/01 (Central Bank of India v. Handu Lal Kishan Lal and Ors.) This appeal has been preferred against the final order passed on 28.9.2001 in O.A. No. 116/01 by the then Presiding Officer, DRT, Jabalpur. The claim of the Bank was for Rs. 28,80,778/- with usual reliefs of future and pendente lite interest and cost. The claim of the Bank has been allowed to the extent of Rs. 4,75,000/- as per RBI Guidelines. 2. In all the cases as mentioned above, as per the original application filed by the appellant-Bank, the accounts of the respondents became NPA in March, 1992. After the applications were registered and notices being issued to the respondent-defendants, they appeared in all the cases by filing petitions under Section 22 of the DRT Act read with Rule 18 of the DRT Procedure Rules and also on principle of natural justice with guidelines given by the Reserve Bank of India on 27.7.2000 for one time settlement in respect of the cases of accounts of the loans categorized as non-performing assets. Such applications were filed in the month of September, 2001 with apetition for early hearing of the matter in issue as the RBI Guidelines as referred to above were going to expire on 30.9.2001. On such applications filed by the defendant-respondents, objections were invited from the appellant Bank and they filed their objections stating various facts and also referring some circulars of the RBI to the effect that non-performing assets of the respondent which were made in the year 1992 had never remained non-performing assets, as on 31.3.1997 the cut-off date made in the circular of the RBI Guidelines is 27.7.2000. Their case was that after the accounts declared as NPA of the respondents-defendants in the year 1992, then again at the requests of the respondent-defendants some transactions were made including that of granting of some more loans. The non-performing assets had lost their character and became performing assets. Nowhere in the reply being made, it was challenged that the RBI Guidelines as referred to above had no binding effect with the Banks, rather it became a discretionary power of the individual branches of the Banks to apply such Guidelines for the purpose of settlement/ compromise of the debts of the borrowers, but in the appeals the main point taken is of the binding effect of the RBI Guidelines dated 27.7.2000. On hearing the parties and on the points raised on the petitions filed by the respondents and the objections raised from the side of the appellant Bank, learned Presiding Officer, DRT, has passed the impugned orders accepting the plea of the respondent-defendants holding that the accounts of the respondent-defendants were NPAs on 31.3.1997 as per the Guidelines itself and such NPAs had never become performing assets, even when some transactions were there after the year 1992. 3. The impugned judgment has been attacked on the following points: (a) That the RBI Guidelines dated 27.7.2000 has no statutory effects and the same had never been issued under Sections 21, 35 of the Banking Regulations Act and hence the Tribunal committed error in passing the impugned judgment on the basis of the RBI Guidelines taking the same of having statutory effect. (b) That the Tribunal had committed error in holding the accounts of the respondent-defendants as NPAs on 31.3.1997. The cut-off date of that circular as mentioned above. 4. Mr. Satish Agarwal and Mr. V.D. Chauhan have argued the appeals for and on behalf of the respondents and by referring to the legal position, they supported the impugned judgments in toto.;


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