- (1.) Petitioner No.1 which is a partnership firm consisting of petitioners No.2 and 3 as its partners, have filed the present petition on behalf of the firm and in their personal capacity challenging the action of respondent-Bank (notices Annexures P-4, P-8 and P-10) forcibly and illegally recovering the amount of Rs. 29,75,527/- on the basis of a decree dated 7.6.1997 passed in their favour and against the petitioners on the ground that the settlement/ compromise (one time settlement) between the parties dated 18.9.1999 has not been fulfilled and hence the Bank is entitled to recover the entire amount of decree dated 7.6.1997. The brief facts which are necessary for the disposal of this writ petition are noticed as under: (i) That the petitioner-firm was sanctioned some financial assistance in the year 1987 by way of Term Loan and other related by the respondent-Bank and the petitioners failed to maintain the account of the Bank regularly and defaulted in making the repayment of loan. Resultantly, the respondent-Bank instituted a civil suit for recovery against the petitioners. The civil suit No.228 of 1996 was decreed against the petitioners for recovery of Rs. 8,29,945/- along with costs of Rs. 28,803/- and pendent lite and future interest at the rate of 16.25% with quarterly rests from 16.7.1996 until payment vide decree dated 7.6.1997. (ii) That one time settlement/compromise was reached at, between the parties vide Annexure P-1 dated 18.9.1999 whereby respondent-Bank agreed to the one time settlement at Rs. 8,0,3000/- subject to the, following conditions: ":25% of the compromise amount be got recovered immediately and the balance amount be got recovered before 31.3.2000. Waive recorded/ decretal interest Rs. 4,27,815.95 without passing any voucher. D.I entry Rs. 66,814.00 be reversed and credited to Income head on receipt of compromise amount. In case of default delayed period interest be got recovered from the party @ PLR. Properties mortgaged be released on recovery of entire bank's duel as per terms of compromise/entire satisfaction of bank. Submit No Due Certificate/Statement of a/c for closure of file at ours."
(2.) The said settlement was not immediately acted upon; however, an amount of Rs. 1,07,000/- was deposited by the petitioners and another sum of Rs. 28,000/- was subsequently deposited by the petitioners on 23.8.2000. Thereafter, the parties agreed and in pursuance of that, the petitioners handed over 27 cheques amounting to Rs. 25,000/- each payable w.e.f. 28.3.2001 to 30.11.2002 in settlement of the claim of balance amount of Rs. 6,68,000/-. It is also undisputed that out of the said 27 cheques, 19 cheques were duly encashed by the respondent-Bank for settlement of the accounts of the petitioners. However, the remaining 8 cheques could not be encaahed by the respondent-Bank. The reason for non-payment of the remaining amount of cheques is alleged to be non presentation of the same by the respondent-Bank to the Banker of the petitioners. Though this fact is disputed by the respondent-Bank, yet it is an admitted fact that in lieu of the amount of Rs. 2,00,000/- pertaining to these 8 cheques, the respondents were handed over cheque No.032093 dated 16.11.2003 for a sum of Rs. 2,25,000/- by the petitioners to meet his liability towards the full and final settlement of its accounts. It is also relevant to mention here that the said cheque amounting to Rs. 2,25,000/- was not presented by the respondent Bank for encashment. On the other hand, the respondent-Bank has alleged in the written statement filed by them that since the petitioners failed to fulfil the terms and conditions of the Bank regarding one time settlement dated 18.9.1999 vide Annexure P-1 therefore, the Bank is entitled to recover the entire amount as per decree dated 7.6.1997 passed in Civil Suit No.228 of 1996 and therefore, they are well within their rights to recover the amount due to the bank at Rs. 29,75,527/- as on 28.2.2007 and the petitioners have no right to challenge the action of the respondent-Bank initiated for recovery of the said amount under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, 2002.
(3.) We have heard learned counsel for the parties and perused the record. From the facts as stated above, it is crystal clear that the one time settlement was reached between the parties to settle the accounts at Rs. 8,03,000/- vide Annexure P-1 dated 18.9.1999 and the said settlement was duly acted upon by the petitioners. Admittedly, the respondent-Bank received a sum of Rs. 1,35,000/- as upto 23.8.1980 and thereafter agreed to receive the remaining amount of Rs. 6,68,000/- from the petitioners vide 27 cheques amounting to Rs. 25,000/- each to be encashed w.e.f. 28.3.2001 to 30.11.2002 in lieu of final settlement of accounts between the parties. There is further no dispute by the parties to the effect that 19 out of these 27 cheques amounting to Rs. 25,000 each were got encashed by the respondent-Bank and in lieu of the remaining amount of Rs. 2,00,000/- representing the amount of remaining 8 cheques, the respondent-Bank agreed to receive cheque No.032093 dated 16.11.2003 for a sum of Rs. 2,25,000/-. From Annexure P-18 , it is crystal clear that the said cheque was never presented by the respondent-Bank for encashment (though in the earlier correspondence to the petitioners the respondent-Bank has alleged that the said cheque was dishonoured) and therefore, no fault lies with the petitioners. It cannot be said that they have failed to fulfil the terms and conditions of the one time settlement reached between the parties thereby giving right to the respondent-Bank to recover the entire amount as per decree dated 7.6.1997 in Civil Suit No.228 of 1996. So much so on coming to know of the fact that the respondent-Bank has failed to encash the said cheque amounting to Rs. 2,25,000/- vide Annexure P-18 the petitioners immediately submitted a Pay Order No.016814 dated 22.5.2007 for Rs. 2,25,000/- in lieu of the above said cheque vide Annexures P-19 and P- 20, to the respondent-Bank. From this fact alone, the bonafides of the petitioners are clearly established to fulfil the terms and conditions of the settlement of their part. From these facts, it is further established that one time settlement reached between the parties has been acted upon and the petitioners have fulfilled the terms and conditions of the said settlement, bona fiedly and that no fault lies upon them for non encashment of cheque No.032093 dated 16.11.2003 for a sum of Rs. 2,25,000/-. Rather, to show their bonafides, the petitioners had agreed to pay a sum of Rs. 2,25,000/- instead of Rs. 2,00,000/-. Thus, it is crystal clear that to cover up their own fault the respondent-bank has issued notices Annexures P-4, P-8 and P-10 under the garb of provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, 2002. Thus, the action of the respondent- Bank in initiating the recovery proceedings against the petitioners under the Securitisation Act for recovery of the entire amount as per decree dated 7.6.1997 passed in Civil Suit No.228 of 1996 is capricious, malicious and illegal and thus, the same cannot be sustained and is hereby, quashed. Since the petitioners have already submitted pay order for a sum of Rs. 2,25,000/-on 25.5.2007 to the respondent-Bank in discharge of their liability finally towards the one time settlement the respondent-Bank is directed to act upon the one time settlement Annexure P-1 and issue No Due Certificate to the petitioners and also to release the mortgage properties of the petitioners within three months. However, in case the validity of the Pay Order dated 22.5.2007 has expired, the same will be revalidated by the petitioners on the request of the respondent-Bank. Accordingly, the writ petition is allowed with costs which are assessed as Rs. 10,000/-. Allowed.;