Decided on January 31,2007



K.Gnanaprakasam, - (1.) This regular appeal is directed as against the order dated 24.5.2005 in OA-225/2003, passed by the DRT, Hyderabad. The 1st respondent Bank filed the suit in OS No. 25/1990, before the Senior Civil Judge at Sathupally, for recovery of a sum of Rs. 5,93,264/- on the basis of the business loan of Rs. 3,50,000/- obtained by the defendants for construction of Cinema Talkies, etc. from the plaintiff Bank and the said loan was secured by equitable mortgage. A preliminary mortgage decree was passed on 31.2.2001. As against the same, the defendant Nos. 1,2,3, and 9 have preferred an Appeal No. 2481/2001 before the High Court of Judicature at Andhra Pradesh, and the said appeal was allowed in part by the decree and judgment dated 12.12.2001, whereby the decree and judgment of the trial Court was modified, directing the defendants to pay a sum of Rs. 5,93,264/- together with interest @ 15% per annum with quarterly rests from the date of suit till the dale of decree and @ 15% p.a. simple interest from the date of decree till the date of realisation.
(2.) The respondent Bank filed E.P. No. 46/2002 in OS No. 25/1990 before the Civil Court and the said proceedings were subsequently transferred to the file of DRT as DRT was constituted for recovery of debts due to Banks and financial institutions and it was taken on file as OA-225/2003. The Tribunal allowed the OA and issued Recovery Certificate by Order dated 24.5.2005. As against the same, this appeal has been preferred. Heard the learned Advocate for the appellants and the 1st respondent. The appellants contended that the Reserve Bank of India (hereinafter referred to as RBI) has issued revised guidelines for compromise settlement of chronic Non-Performing Assets (NPAs) of public sector Banks vide proceedings dated 29.1.2003 and the said settlement was not discretionary and non-discriminatory and the respondent being the nationalised public sector Bank, is bound by the said guidelines and the appellants are entitled to scaling down of the liability in terms of the said circular. The time for availing the benefits under the scheme was extended initially to 30.4.2003, and further extended till the end of October, 2003. That in order to avail the benefits of the said scheme, the 1st appeal firm submitted a representation on 29.3.2003, and the respondent Bank sent a reply dated 19.4.2003, and directed the appellants to give an application for compromise under the general scheme. The application given by the appellants on 30.6.2001 to avail one-time settlement based upon the earlier scheme dated 27.7.2000, was also rejected on the ground that the benefits of the said scheme could not be given to wilful defaulters. It is contended that the appellants were not wilful defaulters and they would not come within the parameters of 'wilful defaulters' as defined by the RBI. The appellants are entitled to the benefit of OTS, based upon the circulars/ proceedings dated 29.1.2003 issued by the RBI, and the said fact was not properly considered by the Tribunal, which resulted in granting of recovery certificate, which is not in order. The amount recovered through the receiver were not properly given credit to. The respondent Bank is also not entitled to cost and further proceedings after grant of decree and thus attacked the order passed by the DRT.
(3.) ON the contrary, the learned Advocate for the respondent would contend that the RBI has not issued guidelines under Section 21 or 35 or 47-A(1)(B) of the Banking Regulation Act and, therefore, they are not having the statutory force. The alleged guidelines were only for internal guidance of the Bank and it has no statutory force. As such, the Bank cannot be compelled to accept the proposal given by the defendants. It is further submitted that the guidelines do not cover the cases where decrees have already been passed. The RBI itself has clarified that in the case of decreed debts, the question of compromise/settlement does not arise and the Bank can execute the decree in entirety. Therefore, the appellants/defendants cannot, as a matter of right, demand the respondent Bank to accept the settlement proposed by them, especially when the Bank was able to recovery full amount through normal process, by enforcing the decree. It is further pointed out that the Advocate for the appellants/defendants has stated before the DRT, that there was no evidence on their side i.e. defendants 1 to 9 and that order may be passed. The present appellants, who are defendants 1, 3, 4 and 6 in the OA, having consented to pass final order in the OA, are not entitled to file an appeal and such an action is not maintainable, as they are prevented from doing so by estopped. It is further submitted that the order passed by the DRT does not suffer from any infirmity. I have carefully considered the rival submissions and also perused the appeal papers.;

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