M S GNANASOUNDARI Vs. INDIAN BANK

JUDGEMENT

(1.) THIS writ petition is for direction against the respondents to give effect to the award dated 7.2.2004 by condoning the delay in payment of award amount and consequently, direct the Debts Recovery Tribunal to record the full satisfaction.

(2.) ONE M/s. Adams Barter World owned by its proprietor late M.J. Durairaj, availed a term loan of Rs.72,00,000/- and cash credit of Rs.25,00,000/- from the first respondent bank on 30.4.1991. The said Durairaj, husband of the petitioner herein died on 16.10.1993 and according to the petitioner, after the death of her husband, the bank has obtained her signature in various papers. Five years after the death of her husband, the first respondent filed O.A.No.85 of 1998 on the file of Debts Recovery Tribunal, Chennai for recovery of a sum of Rs.3,59,86,583.07. According to the petitioner, even now the first respondent bank has failed to furnish the statement of accounts since the said account is classified as NPA. On formation of the second respondent, the case was transferred and the same was renumbered as O.A.No.474 of 2001. During the pendency of the said case, the matter was referred to the Lok Adalat for conciliation and the petitioner has agreed to pay Rs.150 lakhs in full and final settlement of the entire claim amount out of which the petitioner agreed to pay a sum of Rs.38.5 lakhs on or before 31.3.2004 and the balance amount of Rs.111.5 lakhs in September, 2004 with interest at the rate of 11.5% per annum on running balance amount from 7.2.2004. Since the claim is not enforceable against other defendants, the first respondent did not insist for the consent of other defendants in the Lok Adalat. Hence, an award was passed by consent against the petitioner and it was recorded by the second respondent on 7.2.2004 itself and final order was passed in terms of the said award. 2(a). The petitioner has paid the amount of Rs.38.5 lakhs within the time and she has paid the said amount through instalments, the last instalment being paid on 27.3.2004. However, the balance amount which had to be paid on or before the end of September, 2004 could not be paid due to various financial difficulties since the petitioner being the widow has to look after her minor children and her health condition has also become bad and she is living with her daughter in the United States of America. Therefore, the present writ petition is filed through her son being the Power Agent. 2(b). It is also stated that subsequently, on 15.6.2006, the petitioner has paid the balance amount of Rs.111.5 lakhs and the entire amount of Rs.150 lakhs as agreed by the petitioner before the Lok Adalat has been paid however not before the agreed date, viz., September, 2004, but on 15.2.2006. The first respondent contending that since the petitioner has not paid the amount in time, filed I.A.No.37 of 2005 for passing an order determining the liability at Rs.111.50 lakhs with interest at the rate of 11.5% per annum. However, subsequently, the first respondent filed a memo to correct the claim amount as Rs.13,55,99,185.05 with further interest at 20.40% and costs. 2(c). The second respondent has not only allowed the first respondent to file such a memorandum rejecting the claim in respect of other defendants, but also passed a final order as prayed for on the said memorandum however as against the petitioner alone. It is also stated that while the claim made in O.A. itself is Rs.3,59,86,583.07, the amount of Rs.13,55,99,185.05 has been directed to be paid in spite of the fact that the petitioner has paid Rs.150 lakhs as agreed and awarded in the Lok Adalat. The first respondent has filed an appeal in Appeal No.9 of 2007 on the file of Debts Recovery Appellate Tribunal challenging the order of the second respondent dated 12.9.2005 in respect of the portion rejecting the claim against other defendants and the said appeal was dismissed on merits on 11.4.2007. The petitioner has also filed a review against the said order of the Debts Recovery Tribunal dated 12.9.2005 passed in I.A.No.37 of 2005 and that was also dismissed by the second respondent. Since the petitioner has paid the entire amount payable as per the award dated 7.02.2004, the order dated 12.9.2005 passed in I.A.No.37 of 2005 has become infructuous. There was some delay in the payment of award amount and the petitioner has come forward to pay interest for the delayed payment and also paid another sum of Rs.24 lakhs on 2.7.2006 and 5.7.2006 towards interest on the said Rs.111.50 lakhs for delayed payment. The amount was remitted in furtherance to the discussion with the Senior Manager of the first respondent. After remittance of the said sum, the first respondent has gone back from its commitment and insisted the petitioner to give a revised offer for settlement. 2(d). The petitioner and other defendants in O.A.No.474 of 2001 received notice on 24.8.2007 under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, "SARFESI Act"). The said notice states that the proceedings before the Debts Recovery Tribunal is still pending. In fact, the claim against other defendants in the Debts Recovery Tribunal was rejected which has also been confirmed in appeal. O.A.No.474 of 2001 has been disposed of in terms of the award. In these circumstances, the present writ petition is filed for direction as stated above on the basis that the delay in payment of the balance amount of Rs.111.5 lakhs on 15.2.2006 instead of 30.9.2004 is due to various reasons beyond the control of the petitioner.

(3.) ON the other hand, Mr.Jayesh B.Dolia, learned counsel appearing for the respondent bank would submit that the settlement in the Lok Adalat and the award passed based on it has worked itself out and as per the terms if the amount is not paid, the bank is entitled to claim the entire amount. He would submit that it is not as if the bank has received Rs.24 lakhs as interest for the default period and the amount is kept in suspense account.