DHARMARAJAN P.S Vs. CANARA BANK

JUDGEMENT

(1.) Petitioner was a guarantor to the credit facility extended by the first respondent bank (the bank) to a firm called Excellent Decors. He has also mortgaged an item of property in favour of the bank to secure the repayments of the said credit facility. When the firm committed default in remitting the dues, the bank filed O.A.No.55 of 2001 before the Debts Recovery Tribunal, Ernakulam (the Tribunal) under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and obtained Ext.P1 order. In terms of Ext.P1 order, the Tribunal permitted the bank to realise Rs.15, 40, 976/- with interest for Rs.15, 27, 649 at 11% per annum from 28.02.2001 and at 10% per annum from 23.09.2004 by sale of the property of the petitioner. The petitioner did not pay the amount in terms of Ext.P1 order. Instead, when the bank took steps to sell the property of the petitioner in execution of Ext.P1 order, he approached this Court by filing W.P.(C) No.26853 of 2009, stating among others, that he is prepared to liquidate the liability, if permitted to do so on one time basis. When the said matter was taken up on 24.11.2009, the counsel for the bank submitted that if the petitioner remits Rs.25, 20, 000/-, the bank would accept the same towards full and final settlement of the liability of the petitioner. It was also submitted on behalf of the bank that 25% of the said amount shall be paid within one month and the balance within three months. In the light of the said submission, this Court passed Ext.P2 interim order staying the sale of the property on condition that the petitioner shall pay 25% of Rs.25, 20, 000/- within one month from 24.11.2009. The petitioner remitted the said amount namely, Rs.6, 30, 000/- as directed in Ext.P2 order. Later, the writ petition was disposed of in terms of Ext.P3 judgment permitting the petitioner to pay the balance within three months from 24.11.2009. In the meanwhile, the bank has raised the amount from Rs.25, 20, 000/- to Rs.25, 30, 000/- and the petitioner has agreed to pay the same. The petitioner could, however, remit only a sum of Rs.18, 60, 000/- including the 25% remitted in compliance of Ext.P2 order, within the time stipulated. He, therefore, filed I.A. No.2921 of 2010 in the writ petition for enlarging the time fixed for payment of the balance amount namely Rs.6, 70, 000/-. The above interlocutory application was allowed by this Court as per Ext.P4 order, permitting the petitioner to pay the balance amount within one month from 15.03.2010 with interest, if any demanded by the bank. It was also directed in Ext.P4 order that if the petitioner remits the balance amount as directed therein, the bank shall record satisfaction of the liability. It is stated that the petitioner has not been given any communication by the bank demanding interest pursuant to Ext.P4 order. The case of the petitioner is that in the circumstances, by way of abundant caution, the petitioner paid Rs.6, 80, 000/- in the place of Rs.6, 70, 000/- payable by him within the time stipulated in Ext.P4 order and the same has been accepted by the bank without objection. It is stated that despite the aforesaid payment, the title deed of the mortgaged property has not been released. The petitioner, therefore, preferred Ext.P6 interlocutory application in O.A.No. 55 of 2001 seeking directions to the bank to release the title deeds of the property. Ext.P7 is the affidavit filed by the bank in Ext.P6 application. The stand taken by the bank in Ext.P7 affidavit is that since the petitioner did not pay the amount within the time originally agreed, he has to pay interest for the entire amount from 24.11.2009 till the date of last payment namely, 16.04.2010; that the said interest comes to Rs.1, 53, 515/- and that the title deeds have not been released since the petitioner has not paid the said amount. When the said interlocutory application was taken up for further orders, the stand taken by the petitioner was that he is liable to pay interest only for the balance amount remained to be paid and that the additional amount of Rs.10, 000/- paid by him would cover interest for the balance amount. The stand of the bank, however, was that since the dispute between the parties is as to the interest payable by the petitioner in terms of Ext.P4 interim order, the petitioner has to seek appropriate clarifications from this Court. It is alleged by the petitioner that in the light of the said contention, the matter was being adjourned from time to time by the Tribunal. It is the case of the petitioner that he is, therefore, constrained to approach this court in this proceedings to obtain clarifications as to the interest payable in terms of Ext.P4 order.

(2.) A counter affidavit has been filed by the bank reiterating the stand taken in Ext.P7 affidavit.

(3.) Heard the learned counsel for the petitioner as also the learned counsel for the bank.