UNION BANK OF INDIA Vs. ALLIED METAL AND CABLES

JUDGEMENT

(1.) THIS appeal impugns the judgment and order dated 10.2.2011 passed by the Presiding Officer of DRT -III, Delhi in O.A. No. 230/2010, UBI v. Allied Metal and Cables, allowing the O.A. for Rs. 42 lacs with interest pendente lite and future @ 10% simple on reducing balance basis with effect from the date of filing of the O.A., i.e., 21.10.2010 as against the claimed amount of Rs. 47,24,483.03 along with interest @ 12.5 + 2% with monthly rests w.e.f. 1.8.2010 till realization. The facts giving rise to this appeal, in brief, are that the appellant Bank had filed O.A. No. 230/2010 against the respondents for the recovery of Rs. 47,24,483.03 along with pendente lite and future interest with the allegations that the appellant Bank had sanctioned cash credit facility to the respondent No. 1 firm through its proprietor on execution of the loan documents and mortgage of the property. The borrower had availed the said facility to the extent of Rs. 40 lacs by 31.12.2008 but failed to repay the outstanding dues despite demand letter and legal notice. On 10.2.2011, Nitin Kumar Rastogi, the proprietor of the borrower firm, appeared before the DRT and undertook to repay the NPA amount of Rs. 42,06,874/ - as it stood on 30.9.2009 in 24 monthly instalments and agreed to deposit the first instalment with the Bank by 31.3.2011. Though the Bank's Counsel had contended that since the respondent had admitted the Bank's dues, therefore, recovery certificate of the claimed amount be issued, yet the Presiding Officer determined the amount of debt due at Rs. 42 lacs and ordered for its payment with interest, as stated above, and directed the respondents to pay the said amount in 24 monthly instalments with first instalment to be deposited by 25.3.2011 with the Recovery Officer qua the recovery certificate, which was to be issued by the DRT in pursuance of the said order. It was also directed that till the recovery of the amount is made in full, the mortgaged property shall remain in the symbolic possession of the authorized officer of the Bank. Feeling aggrieved with that order, the Bank has preferred this appeal.

(2.) I have heard Mr. Gautam Gupta representing Mr. Aditya Madan, Counsel for the appellant Bank and Mr. Ashish Kumar Sharma, Counsel for respondent No. 1 and perused the record. Though respondent Nos. 2 and 3 were served with the notice of the appeal through publication in the newspaper 'Amar Ujala' dated 10.2.2012, yet they did not appear and this appeal has accordingly been heard ex parte against them.

(3.) RESPONDENT No. 1, the proprietor of the borrower firm, despite appearing before this Tribunal and contesting this appeal, has not filed any formal reply to this appeal Mr. Sharma, the learned Counsel for respondent, could not rebut any of the contentions of the appellant's Counsel successfully, considering the circumstances of the case, I am inclined to accept the appellant's contention that the reduction of the claimed amount in the impugned order without assigning any reason for that is not sustainable in the eye of law. There is also nothing on record to show as to why and on what considerations the pendente lite and future interest has been awarded @ 10% p.a. simple instead of the contractual rate and that too from the date of filing the OA and not from the date of classification of the account as NPA whereafter the interest was not applied to the claimed amount. The DRT is empowered under Section 19(20) of the RDDBFI Act to award interest from the date on or before which the payment of the amount had been found due up to the realization of the actual payment. I am also of the view that when the defendant/respondent was admitting that he owed money to the appellant Bank and was agreeable to pay the same, the failure on the part of the DRT to award cost of proceedings can also not be said to be justified. Moreover, the disposal of the O.A. without following the procedure established under law is not sustainable and in view of the above circumstances this appeal is entitled to be allowed. However, since the appellant has not been provided with any opportunity to produce evidence in support of its case, it appears to be a fit case for remitting the O.A. back to the DRT for disposal in accordance with law.