C.K Thakker, C.J:— By this petition, the petitioners have prayed to this Court to direct the Respondent No. 1 Bank of Maharashtra to decide various applications made by them to respondent No. 1 for One Time Settlement (OIS) in accordance with the guidelines issued by the Reserve Bank of India for compromise settlement of Chronic non performing assets of Public Sector Bank. A prayer is also made to quash and set aside a communication, dated Sept. 30, 2003 (Exh. K) by restraining the first Respondent Bank not to proceed with effecting recovery of dues against the petitioners.

2. Certain facts are not in dispute. The respondent No. 1 Bank approached the Debt Recovery Tribunal, Pune for recovery of certain dues from the petitioners under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as “the Act”). Ex parte order was passed on 18th July, 2002 against the petitioners. It was for Rs. 1,48,31,917.28. It is also not in dispute that before the said order was passed, no application was made by the petitioners for One Time Settlement relying on guidelines issued by the Reserve Bank of India. It may be stated that according to the learned counsel for the 1st respondent, the guidelines relating to One Time Settlement had been issued by the Reserve Bank of India initially on 27th May, 1999, then on 27th July, 2002 and finally on 29th January, 2003. It is also admitted fact that pursuant to ex-parte order passed by the Presiding Officer, Debts Recovery Tribunal, Pune, Recovery Certificate under Section 22 of the Act was issued against the petitioners. It was only after the certificate was issued that an application was made by the petitioners for the first time on 18th Nov., 2002 (Exh. D). Again on 12th Feb., 2003, such application was made and reminder was sent on 10th March, 2003. Since the prayer of the petitioners was not accepted by the 1st Respondent, the petitioners have approached this Court. It may also be noted at this stage that ex-parte order passed by the Debts Recovery Tribunal, Pune, on 18th July, 2002 has never been challenged even though an Appeal has been provided under the Act.

3. The learned counsel for the petitioners strongly relied on the guidelines issued by Reserve Bank of India. It was submitted that those guidelines are binding in nature. Our attention was invited by the learned counsel to a decision of the Supreme Court in Central Bank of India v. Ravindra, (2002) 1 SCC 367 : (AIR 2001 SC 3095). In that case, their Lordships observed that once directives are issued by the Reserve Bank of India, all banks are bound by such directives and they have to implement them. It was also observed that such practice was adopted in the larger interest of justice which would narrow down the controversy in suits filed by Banking institutions and would enable expeditious disposal of such suits.

4. Reference was also made to another decision in B.I.O Finance Ltd. v. The Custodian, AIR 1997 SC 1952 Considering the ambit and scope of Section 36 read with Section 46 of Banking Regulation Act, 1949, the Apex Court observed that the directives issued by the Reserve Bank of India are of binding nature and the banks must follow them. It was also indicated that if there is violation or breach of those directives, the bank would be liable to punitive action.

5. Now, it is no doubt true that directives have been issued by Reserve Bank of India. In our opinion, however, the directions would not apply to the facts of the present case.

6. The relevant direction is in Clause C, which reads as under:

“These guidelines will cover cases on which the banks have initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and also cases pending before Courts/DRTs/BIFR, subject to consent decree being obtained from the Courts/DRTs/BIFR.”

(Emphasis supplied)

7. In our considered opinion, Clause C would not be attracted in the instant case. Clause C is in two parts. The first part covers cases wherein banks have initiated actions under the Securitisation and Reconsruction of Financial Assets and Enforcement of Security Interest Act, 2002. Thus, where a bank initiates an action under the said Act, the guidelines would get attracted and the bank concerned has to proceed with the case keeping in view the guidelines of the Reserve Bank. The second part on the other hand, deals with “cases pending before Courts/DRTs/BIFR subject to consent decree being obtained from the Courts/DRTs/BIFR”, i.e cases which are sub-judice and not finally disposed of.

8. The question for consideration before us is whether clause C would apply only to those cases pending before Debts Recovery Tribunal/BIFR or would also apply to cases which have been decided and in which decrees/holders have been passed and have become final either by non filing of appeals or appeals being decided or other proceedings in accordance with law are over and orders/decrees have become final.

9. The learned counsel for the petitioners conceded that against the order passed by Debts Recovery Tribunal, no appeal was filed by the petitioners and the order in that sense has become final. He, however, submitted that as execution proceedings are pending, the case should be treated as pending and the second part of clause “C” would apply. For that, the learned counsel placed reliance on two decisions, in Jivanji Mamooji v. Ghulam Hussain Sheikh Tayab, (1918) 47 Ind Cas 771 : (AIR 1918 Sind 38) and Bonbehari Roy v. Dhirendra Nath Roy, AIR 1956 Cal 132.

10. In our opinion, the ratio laid down in the above cases would not apply to the facts of the case on hand. In those cases, it has been held that wide interpretation should be given to the conotation “pending proceedings.”

11. The learned counsel for the Reserve Bank did not dispute as, a proposition of law that “pending proceedings” should be construed liability. His endeavour, however, is that once a decree is not challenged or has become final, the guidelines issued by Reserve Bank of India would not apply because of the phraseology used in Clause C. The acceptance of argument of learned counsel for the petitioners would make second part of Clause C redundant and nugatory. The reference to cases being “pending” and “subject to consent decree being obtained from the Courts/DRTs/BIFR” makes it abundantly clear that proceedings must be pending before judicial or quasi judicial authority and must not have been finally culminated in decree/order. Since in this case, order was final as no appeal was filed, guidelines will not apply.

12. We see considerable force in the argument of the learned counsel. We have already reproduced Clause C in the earlier part of the judgment. As indicated hereinabove, it deals with two different types of cases. So far as the former class is concerned, the Bank proceeds on its own for recovery of dues and there is no adjudication by judicial determination at that stage. Obviously therefore, the directive of the Reserve Bank get attracted and the Bank concerned has to follow such guidelines. The latter class, however, stands on a totally different footing. A competent Court or authority has passed a decree or made an order on a lis between the parties considering the rival contentions. Such a decree/order, obviously, therefore, cannot be ignored. The language of the guidelines is clear, express, and unambiguous. It covers only those cases which are “pending” before Courts, DRTs, BIFR and which are “subject to consent decree being obtained.” The above two phrases leave no room of doubt that they do not apply to cases wherein decree/orders have already been made and have become final. There is, therefore, no question of “consent decree being obtained” by the parties. An interpretation that the second part will apply to such decrees/orders will not only violate the language but also will make decree/orders passed by a competent Court/authority otiose there by interfering with judicial/quasi judicial adjudication. Unless compelled a Court of law will not accept such construction. We accordingly, reject the submission of the learned counsel for the petitioners.

13. The provisions of Rule 2 of Order XXI of the Code of Civil Procedure, 1908 would also not help the petitioners. To us, it is clear that the said provision has been made in the interest of Judgment-debtor. When a decree is passed in favour of Decree holder and the decree is satisfied either by payment or is otherwise adjusted, the judgment-debtor may inform the Court of such payment or adjustment and on that basis the Court may certify such payment.

14. In the instant case, the guidelines issued by the Reserve Bank of India are though binding, do not apply to the proceedings. There is no settlement between the parties out of Court. The provision of Order, XXI Rule 2 of Code, therefore, would not be attracted.

15. For the aforesaid reasons, in our opinion the action taken by Respondent No. 1 cannot be said to be illegal or contrary to law. The petition deserved to be dismissed and accordingly dismissed with no order as to costs.

16. The counsel for the petitioner, at this stage, submitted that the order passed by us may be stayed for some time as the petitioners intend to approach the Hon'ble Supreme Court. It was also stated that public auction is scheduled to be held on 11th Dec. 2003.

17. The learned counsel for the 1st Respondent strongly objected to the said prayer. It was stated that if stay is granted by us, it would create difficulty for the 1st respondent as in that case, all intending purchasers may not come forward and the property may not fetch marketable price.

18. In the facts of the case, when the petitioners intend to challenge our order, it would be in the interest of justice if the auction is allowed to proceed but the same may not be finalised for four weeks from today subject to the petitioners depositing advertisement cost with Respondent No. 1. Certified copy expedited.

Parties be given an ordinary copy of this order duly authenticated by the Associate.

Order accordingly.