L. JAYAKUMAR Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) AGGRIEVED by non -payment of the arrears of legal fees and the remuneration to a sum of Rs.26,42,615/ - along with interest by the respondents/bank, the petitioner has come forward with the present writ petition, seeking for a Writ of Mandamus to the respondents to make the above said payment.

(2.) ACCORDING to the petitioner, he is the senior member of the Bar, having practice in High Court of Madras for more than three decades and a partner of a registered legal firm, L. Jayakumar & Associates. The respondents approached the petitioner to find out the way to recover a sum of Rs.472.24 lakhs from M/s. S & S Power Switch Gear Ltd., which is a sick unit, against which the respondents bank initiated recovery proceedings in O.A.No.223 of 2003 on the file of the Debts Recovery Tribunal, Madras. The petitioner, after studying various factors, opined that the said company might have created an artificial loss with an intention to prevent the creditors from realizing their investments and the loan and therefore, unless all the consortium of all the banks who advanced loans make a joint efforts expeditiously before the alleged winding up proceedings, it would be difficult to recover the loan. The respondents informed that as such, they found it difficult to co -ordinate with other consortium of banks, and determined to initiate necessary legal action based on petitioner 's advice. They offered that in the event of petitioner succeeding in his efforts to recover at least 25% of the book debt, they would pay 5% of the money received as incentive to the petitioner, based on the amount recovered. The petitioner agreed to explore all possible measures to recover the loan from the said company on a condition that the respondents should co -ordinate with his efforts to proceed against all the Directors of the said company both in the insolvency Court and Criminal Court under Sections 405 , 415 , 418 , 463 , 468 r/w 34 IPC. Pursuant to the suggestion given by the petitioner, the respondents/bank, by their letter dated 30.7.2004 offered Rs.60,000/ - by way of fees plus 5% as incentive from and out of recovery made either through Court or through compromise, provided the recovery exceeds 25% of the amount due in the Account as per the prescribed norms of the bank.

(3.) THEREAFTER , as per the approval of the scheme of arrangement by this Court, S & S Power Switch Gear Ltd., paid Rs.73,62,728/ - to the respondents, representing 20% of the principal outstanding in terms of the scheme of arrangement. Thereafter, pursuant to the order of this Court dated 01.08.2007, the respondents/bank were permitted to proceed against the guarantors of the above said company in the recovery proceedings in O.A.No.223 of 2003 in their individual capacity as well as in the solvency proceedings. Later, the officials of the said company met the Chairman and some of the executive Directors of the respondents bank at Bombay and got an arrangement in such a way, recommending the Zonal Manager of the respondents bank to receive Rs.2,53,00,000/ - from the said company as a full & final settlement. According to the petitioner, this arrangement was so strange that out of Rs.2,53,00,000/ - and Rs.73,62,000/ - were to be recovered as OTS and the balance of Rs.179.38 lakhs was to be treated as 'management fees '. Ultimately, the respondents bank succeeded and obtained Rs.2,53,00,000/ - from the said company.