M.B Vishwanath, Chairperson:— These nine connected Miscellaneous Appeals have been filed by both the Bank and Borrower Group of Companies challenging the Common Order dated 1.6.2000 on I.A Nos. 1711 to 1720 of 2000 passed by the Debts Recovery Tribunal (DRT), Chennai.
2. The DRT granted time to the borrower Company upto 30.6.2000 The Bank is aggrieved by this as also the borrower Company. The Bank says that time should not have been extended since the Order was on a compromise.
3. The borrower Company says that time should have been granted upto 30.7.2000 as prayed for.
4. Miscellaneous Appeal Nos. 29 to 32 of 2000 have been filed by Indian Bank against the respondent borrowers. Miscellaneous Appeal Nos. 38 to 42 of 2000 have been filed by the borrower DSQ Group of Companies against the appellant Indian Bank.
5. In Miscellaneous Appeal Nos. 29-32/2000, the Bank has challenged the Order passed by the learned Presiding Officer, DRT, Chennai on 1.6.2000 In Miscellaneous Appeal Nos. 38-42/2000, the borrower Company has filed appeals praying for more time. They have also challenged the same Order.
6. I will presently state what is the impugned Order and how in all Nine appeals have arisen.
7. There were Original Applications filed by the Bank for recovery of the amounts lent to the DSQ Group of Companies (Borrowers). In all, the amount claimed was Rs. 126.29 crores or so.
8. Before the DRT, the matter between the Bank and the borrowers was compromised on 15.3.2000
9. As per the compromise between the Bank and the borrower, the borrower was to pay Rs. 136 crores (Rupees one hundered and thirty-six crores only).
10. As per the Terms of Compromise, Rs. 10 crores was to be paid on or before 15.3.2000, Rs. 42 crores was to be paid on or before 28.3.2000, Rs. 84 crores was to be paid on or before 6.4.2000 with grace period of one week i.e upto 14.4.2000
11. The compromises says that if prompt payments as stated above were made that would be in full satisfaction of the claim and the Original Applications would stand dismissed.
12. The first two payments, Rs. 10 crores and Rs. 42 crores were paid promptly. The last payment of Rs. 84 crores was not made, promptly.
13. The borrowers paid Rs. 10 crores towards last instalment and sought extension as per the Interlocutory Applications (I.A Nos. 1264 to 1268 of 2000) filed before the DRT. They prayed for extension of time on the ground that they were unable to mobilise the sum of Rs. 84 crores because of the severe setback in the share prices of the Software and Biotechnical shares. The borrowers say that the ‘shedding’ of shares pledged with the applicant Bank will have disastrous consequences. They prayed time upto 14.5.2000 to make the payments regarding balance due.
14. The DRT passed a common order on IAs 1264-1268/2000 on 1.5.2000 The DRT granted time for payment of the balance amount on or before 14.5.2000
15. It should be stated here that this order was challenged by the Bank. At the initial stage itself this Tribunal rejected the appeals since the time granted by the DRT had expired when the appeals were filed.
16. I have alreadly stated that the DRT gave time upto 14.5.2000 to make the balance payment.
17. This payment also was not made within 14.5.2000
18. The borrowers filed another set of Interlocutory Applications (IAs 1573 to 1577 of 2000) praying for further extension of time upto 30.7.2000 on the ground that there was delay in granting the licence by the State Government with respect to distillery unit. They have given other reasons also in the affidavit.
19. The DRT by its Order dated 19.5.2000 granted time upto 30.5.2000
20. This Order dated 19.5.2000 was not challenged by any of the parties and it became final.
21. The time granted to the borrowers by the DR. on IAs 1573-1577/2000 to make payment was upto 30.5.2000 To repeat, this Order became final.
22. The borrowers could not make the balance payment within 30.5.2000
23. So the borrowers filed before the DRT another set of IA Nos. 1711-1720/2000 praying for granting of time upto 30.7.2000
24. DRT again granted time upto 30.6.2000 by its impugned Order dated 1.6.2000
25. This Order dated 1.6.2000 is challenged in these appeals filed both by the Bank and the borrowers.
26. The Miscellaneous Appeal Nos. 29-32/2000 have been filed by the Bank aggrieved by the above Order dated 1.6.2000
27. The M.A Nos. 38-42/2000 have been filed by the borrower Company.
28. The Bank in its appeals has stated that the Order dated 1.6.2000 by the DRT granting time upto 30.6.2000 was illegal. The Bank has prayed that this Order dated 1.6.2000 should be set aside, as entire amount as the suit claim had become payable under the compromise.
29. The borrower has challenged the Order praying insofar as it relates to restricting the extension of time upto 30.6.2000 Their prayer is that the DRT should have granted time upto 30.7.2000
30. In this Tribunal the borrowers have paid in all Rs. 75.45 crores.
31. The compromise between the parties was payment of Rs. 136 crores.
32. The Borrower Company has paid in all Rs. 143.12 crores, which includes interest. The original compromise dated 15.3.2000 filed before the DRT says that if the payments are not made as per the compromise the borrowers should pay as per the Original Applications.
33. As per the compromise dated 15.3.2000 between the parties, in the event of noncompliance of any one of the conditions in the compromise (to which I have earlier adverted) the Original Applications 1884/98, 1992/98, 1993/98, 2029/98 and 2030/98 shall stand decreed as prayed for.
34. The admitted facts are that as per the compromise, the borrower Company has paid Rs. 143.12 crores. This amount of Rs. 143.12 crores includes interest on default payments. Thus the compromise terms are in effect fulfilled by the borrower Company.
35. The learned Senior Counsel for the Bank took me through various stages of payments to impress upon me that the payments were not paid promptly and therefore IA 2/2000 could not be allowed and securities should not be released. The learned Counsel contended that in view of the default committed the borrower Company was bound to pay the amount as per the original claim in the OAs.
36. It is contended by the learned Counsel for the borrower Company that because of constraints and inevitable circumstances the borrower Company could not make prompt payment.
37. I have already adverted to the reasons stated by the borrower Company for not making some payments on time.
38. It is not disputed that there is a delay of seven months in making payment towards final instalment.
39. In view of the law laid down by the Supreme Court it is not necessary to meet the elaborate arguments by the learned Counsels for the Bank.
40. It bears repetition. The borrowers have paid Rs. 143.12 crores. There is a delay of seven months in making the payment towards final instalment.
41. * It has been laid down by the Supreme Court, “the Court of appeal is entitled to take into account even facts and events which have come into existence after the decree appealed against.”
42. ** In another Supreme Court authority, the Supreme Court has been pleased to lay down, “where the parties entered into a compromise and invited the Court to make an order in terms of the compromise, the time for deposit stipulated by the parties became the time allowed by the Court and this gives the Court the jurisdiction to extend time in appropriate cases.”.
43. The borrower Company has given adequate reasons in the affidavit as to why it could not make some payments according to the compromise. The reasons given by the borrower Company are convincing.
44. *** The learned Senior Counsel for the Bank sets store by the Authority of the Hon'ble High Court of Madras. This was a case arising out of a suit for specific performance. Reasons given for extension were found to be “machinations in seeking to get over his own inability to pay the price within the time agreed.”
45. In the same authority (para 57) relied on by the learned Counsel for the Bank, the Madras High Court has said that the Court is not powerless in extending time stipulated by the parties in a compromise memo which compromise memo is accepted by the Court and made into a decree of the Court.
46. That is not the position here. There was no machination by the defendant borrower. The defendant borrower has shown bona fides in making payments whenever funds were available. There is a delay of only seven months in making the final payment.
47. The defendant Company has produced two letters, one dated 29.12.2000 and another also dated 29.12.2000 These letters are written by the Bank to 3rd parties. In these letters the Bank has stated that the borrower Company has paid dues under the compromise proposal.
48. The learned Senior Counsel for the Bank submitted at the time of arguments that the Bank accepted the payments because of the suggestion by this Tribunal. This is not correct. The Counsel who argued on merits was not the Senior Counsel who was appearing on the days of hearing earlier.
49. The Bank was keen on receiving payments. The payments were received willingly and without protest. Even smilingly by the Senior Advocate and the Officer of the Bank.
50. In para 11 of the objections to IA-2 the Bank Officer has sworn to the monetary transactions between Ganapathy Export Ltd., and the branch of the Bank at Bombay where one of the Directors of the borrower DSQ Group is involved. In is further stated in the objections (Counter Affidavit) that arrangements are being made to initiate appropriate recovery proceedings against the parties concerned in the transaction at Bombay.
51. It is clear from what is contained in para 11 of the objections to IA-2 that on the basis of the securities involved in the present OAs, the Bank is trying to get money in some other case. How on earth this Tribunal can permit such a thing?
52. To use the language of an eminent Judge of the Hon'ble High Court of Karnataka, who later became a Supreme Court Judge, the Late Justice Mr. K.S Hegde. “the Bank is trying to dig into the past and resurrect the forgotten grievances” to recover amount in some other transaction.
53. When the Appeals (I.A Nos. 3-5/2000 in M.A 32/2000) were filed by the Bank, this Tribunal granted status quo restraining the garnishee Bank from making payment to the respondent group of Companies.
54. It is seen from the Note Sheet dated 17.11.2000 that this Order was vacated by consent of Counsel for the Bank, obviously because the Bank was satisfied with the payments as per the compromise memo. The Bank cannot be permitted to turn around and take a different stand, having received huge payment.
55. For the aforesaid reasons, IA. 2 is allowed and the Bank directed to release securities to the defendant borrower Company as stated in para 14 of IA. 2.
56. In view of my conclusion on IA-2 the Miscellaneous Appeals filed by the Bank as well as the DSQ Group of Companies do not survive for consideration and they stand dispoed of.
M.As disposed of.