YOGESH JAIN Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) The present petition assails common order dtd. 14/10/2025 ( "impugned order ") passed by the learned Debt Recovery Appellate Tribunal ( "DRAT ") in Misc. Appeal No. 415/2018 and Misc. Appeal No. 499/2018, whereby order dtd. 26/6/2018 arising out of OA 254/2010 before the learned Debt Recovery Tribunal -III, Delhi ( "DRT ") was challenged. By way of the impugned order, the appeal of the petitioner was allowed, and the appeal of the respondent-bank was dismissed with the direction that the respondent bank is liable to refund to the petitioner a sum of Rs.30,832.27 with interest at the rate of 6% per annum simple from 11/3/2014 till the date of realization.

(2.) The brief facts giving rise to the present petition are that petitioner no.1, along with his son, approached the respondent-bank for grant of an educational loan of Rs.15,00,000.00 under the Education Loan Scheme, for pursuing a four-year undergraduate course at Indiana University, Bloomington, USA. By sanction letter dtd. 13/9/2002, the respondent-bank sanctioned the said educational loan, secured by the personal guarantees of Ms. Preeti Jain and Ms. Savitri Jain, along with a re-charge on the property already mortgaged with the respondent-bank in the account of M/s Rishabh Electricals Pvt. Ltd., belonging to Ms. Savitri Jain. Pursuant thereto, an Agreement for Educational Loan dtd. 24/9/2002 was executed between the parties. Under the terms of the sanction, the loan was to be repaid in 84 monthly instalments commencing twelve months after completion of the course or six months after the student secured employment, whichever was earlier. During the moratorium period, only simple interest was to be charged and, thereafter, compound interest was payable, with penal interest of 2% being payable only on overdue amounts. As per the respondent-bank, the loan amount of Rs.15,00,000.00 was to be disbursed in four instalments of Rs.3,75,000.00 each, as and when demanded by the university.

(3.) Out of the sanctioned loan amount of Rs.15,00,000.00, the respondent-bank disbursed only three instalments of Rs.3,75,000.00 each on 1/10/2002, 25/7/2003 and 23/4/2004, aggregating to Rs.11,25,000.00. The fourth and final instalment of Rs.3,75,000.00 was withheld by the respondent-bank for want of adequate security, despite repeated requests made by petitioner no.1 for release of the same for payment of the tuition fee required for completion of his son's course. The petitioners also did not repay the loan amount disbursed by the respondent-bank, claiming that fourth and final instalment was not received and the repayment had to start after they had received the full education loan amount during the course. According to the petitioners, the respondent-bank unjustifiably insisted upon furnishing additional collateral security, although the sanction letter did not stipulate any such condition and the security was already accepted by the respondent-bank. Thereafter, alleging default in repayment, the respondent-bank instituted O.A. No.254/2010 before the DRT seeking recovery of Rs.24,93,511.00 together with further interest. During the pendency of the recovery proceedings, in order to protect their property from attachment and coercive recovery proceedings, the petitioners furnished Fixed Deposit Receipts ( "FDR ") aggregating to Rs.35.11 lakhs before the DRT as security. Thereafter, upon the O.A. being allowed by final order dtd. 21/2/2014, the respondent-bank encashed and appropriated the said FDR amount on 10/3/2014 towards the alleged outstanding dues. The petitioners preferred Appeal No.353/2014 before the DRAT, Delhi which came to be dismissed on 3/2/2015.Aggrieved thereby, the petitioners approached this Court by filing W.P. (C) No.4454/2015. By judgment dtd. 31/3/2016, this Court set aside the orders passed by the DRT and the DRAT, and remanded the matter to the DRT with directions to ensure that the respondent-bank produced complete and legible statements of account, grant an opportunity to the petitioners to examine and object to the debit entries relating to interest and overdue interest, quantify the amount actually due and also give due adjustment of the amount appropriated by the respondent-bank from the FDR amounting to Rs.35.11 lakhs, with consequential refund, if any, found payable. Pursuant to the remand, the respondent-bank filed affidavits stating that the statements of account prior to the year 2006 could not be produced as the accounts had originally been maintained on a stand-alone computer system at the Daryaganj Branch, which was subsequently migrated to the Core Banking System in the year 2006, rendering the earlier data unavailable despite efforts to retrieve the same.