PUNJAB NATIONAL BANK Vs. SEVEN BROTHERS

JUDGEMENT

(1.) The short facts of the case appears to be that on 25.07.1989, the respondents Nos. 1 to 4 applied for loan facilities from the petitioner Bank which came to be sanctioned on 06.09.1989. The documents were executed for the term loan and cash credit facilities. As per the petitioner, since the amount was not paid, Civil Suit was filed being No. 995/94 before the City Civil Court, Ahmedabad on 28.02.1994 and on account of the constitution of the Tribunal, the Suit came to be transferred to the Debt Recovery Tribunal, Ahmedabad (hereinafter referred to as "DRT") on 21.12.1994. The Debt Recovery Tribunal passed the Judgement and Order whereby it found that chargeability of the interest is 15% for term loan and 17% for the cash credit facility loan. However, it also found that as the books of accounts of the Bank were being regularly written upto 15.03.1993, the books of accounts written by charging interest by the Bank does not deserve to be upset. However, for the subsequent period, the Tribunal awarded interest at the rate of 15% and 17% for the respective loan and accordingly, the Tribunal found that the amount of Rs.4,46,534.97 after credit of the amount of Rs.12.50 Lakhs which was already paid pursuant to the proceedings before the High Court was recoverable and the said amount was permitted to be recovered from the FDR + amount of interest at the rate of 17% p.a. amounting to Rs.1,33,044.82 from 02.06.1995 was permitted to be recovered. The petitioner Bank has not carried the matter in appeal, but the respondent carried the matter in appeal before the Debt Recovery Appellate Tribunal (hereinafter referred to as "DRAT") being Appeal No.91/97. The DRAT found that the Tribunal has wrongly considered the effect of Section 21A of the Banking Regulation Act (hereinafter referred to as "BR Act") and the interest as per the contractual rate at the rate of 15% p.a. and 17% p.a. for the respective loan was chargeable from the date of transaction of loan and DRAT therefore found that the excess amount is paid by the appellant therein of Rs.3,33,347/- which was ordered to be paid by the petitioner Bank along with future interest at the rate of 15% p.a. vide order dated 26.11.1997. It is under these circumstances, the present petition by the petitioner Bank.

(2.) Heard Mr. Parikh for the petitioner and Mr. Ravani for the respondents.

(3.) The learned counsel for the petitioner first contended that in view of the provisions of Section 21A of the BR Act, the Tribunal or DRAT had no power or authority to upset or reopen the books of accounts already written by the Bank prior to the filing of the Suit. It was therefore submitted that the finding of the DRAT is in contravention to the provisions of Section 21A of the BR Act. Therefore, the impugned Judgement of DRAT deserves to be quashed and set aside.