SRI RAGHAVENDRA THEATRE Vs. BANK OF INDIA

JUDGEMENT

(1.) THE appellant filed appeal AOR-1/ 2002 on the file of DRT, Bangalore to pass order to the effect that the 1st respondent Bank is not entitled to recover the amount from the appellants in terms of the decree passed by the DRT in OA-878/1995 dated 10.6.1997 and direct the 1st respondent Bank to accept a sum of Rs. 33,75,000/- in all as full and final settlement of their dues as per the compromise dated 3.2.2001 and withdraw the Recovery Certificate DRC No. 360/1997, dated 26.10.1997 and also withdraw the Recovery Certificate No. 182/2001, dated 26.10.1997. THE Tribunal heard the matter and dismissed that petition. Aggrieved against that order the appellant has preferred this appeal. THE OA was disposed of and final order was passed in the OA on 10.6.1997.

(2.) Counsel for the appellant submitted that subsequent to the passing of the final order the matter was compromised between the Bank and the appellant and One Time Settlement (OTS) was arrived at and the matter was compromised for a sum of Rs. 45 lakhs and the appellant paid a sum of Rs. 13.25 lakhs and there is balance of Rs. 33.75 lakhs and the Bank must be directed to accept only that amount in view of the compromise effected and the final order passed by the Presiding Officer, DRT, and the Recovery Certificate issued in consequence of that final order cannot be proceeded with and the Bank is not entitled to recover the amount in terms of the decree passed by the DRT and the Bank must be directed to accept the balance amount of Rs. 33.75 lakhs in full and final settlement of the dues as per the compromise effected and the Recovery Certificate issued by the DRT is also to be withdrawn. Counsel for the appellants further submitted that the Bank has to settle the matter in the light of the Reserve Bank of India (RBI) guidelines which was in force at the time of settling this matter and invoking the RBI guidelines alone the matter can be disposed of and accordingly the compromise effected on 3.2.2001 has to be given effect to, only the amount arrived at in the compromise has to be received by the Bank in full and final settlement of the claim and the Bank is not entitled to recover the amount in terms of the decree passed by the Presiding Officer, DRT.

(3.) COUNSEL for the appellant vehemently argued that since the compromise has been effected the Bank receive only the compromise amount and the Bank has necessarily to settle the matter as per the RBI guidelines and the Bank will have to receive the amount only as per the compromise effected and the Bank cannot enforce the decree passed by the Presiding Officer, DRT. COUNSEL for the respondent Bank submitted that the appellant is not entitled to invoke the RBI guidelines since he is a wilful defaulter. The RBI guidelines provide that the guidelines will not, however, cover cases of wilful default, fraud and malfeasance. It is also stipulated in the guidelines that these guidelines will also cover cases pending before Courts/DRTs/BIFR subject to consent decree being obtained from the Courts/DRTs/BIFR, but cases of wilful default, fraud and malfeasance will not be covered. The guidelines further provide that the minimum amount that should be recovered under the revised guidelines in respect of compromise settlement of NPAs classified as doubtful or loss as on 31.3.1997 would be 100% of the outstanding balance in the account as on the date of transfer to the protested bills account or the amount outstanding as on the date on which the account was categorised as doubtful NPAs, whichever happened earlier, as the case may be. It is further stated in the guidelines that the amount of settlement arrived at should preferably be paid in one lumpsum. In cases where the borrowers are unable to pay the entire amount in one lump-sum, at least 25% of the settlement amount should be paid up front and the balance amount of 75% should be recovered in instalments within a period of one year together with interest at the existing Prime Lending Rate (PLR) from the date of settlement upto the date of final payment.