CANARA BANK Vs. SANJAY TRADING CO

JUDGEMENT

(1.) THIS is an appeal filed against an order dated 5th September, 2005 passed by Presiding Officer, D. R. T. , Lucknow in T. A. No. 755 of 2002, Canara Bank v. Snjay Trading Company, allowing the application moved by the respondents and disposing of T. A. No. 755 of 2002.

(2.) ACCORDING to the appellant the respondent firm was engaged in business of manufacturing, selling and export etc. of carpets and for that business through respondent No. 2, the appellant-bank was approached in the year 1981 for the grant of financial facilities. The appellant-bank sanctioned and disbursed credit facilities to the respondent No. 1 and for that respondent Nos. 3 and 4 and one Late Bishan Swaroop gave the security of their properties by way of equitable mortgage. The respondents, according to the appellant failed to maintain financial discipline in accordance with terms of above loan, hence, a suit was filed for recovery in the year 1989 before Civil Judge, Aligarh as Suit No. 959 of 1989. The respondents and Late Bishan Swaroop contested the above suit filing their written statement and the suit was ultimately transferred to D. R. T. , Lucknow, where it was numbered as T. A. No. 755 of 2002. The appellant has contended that the respondents had approached the appellant bank in the year 2000 for compromise under O. T. S. Scheme and this settlement was accepted on 29th May, 2000 as respondents agreed to pay Rs. 15. 28 lacs in full and final satisfaction of the demanded amount. The appellant-bank pleaded that the respondents deposited only Rs. 6. 25 lacs from 19th November, 2001 to 29th January, 2003 whereas the balance of Rs. 9. 03 lacs remained unpaid. The bank claimed that the respondents could not honour the compromise, which was ultimately cancelled. On 24th November, 2004, the D. R. T. , Lucknow illegally and acting without jurisdiction extended facility of O. T. S. to the respondents after consideration of an application of respondents. The bank pleaded that in T. A. No. 755 of 2002 the defendant No. 2 had moved an application on 23rd March, 2005 wherein giving the details of N. P. A. account payable as per R. B. I. Guidelines they claimed that the amount due conies to be Rs. 4,81,011. 80 whereas the defendant No. 1 had deposited Rs. 6,25,000/-, hence, as per the guidelines of R. B. I, the defendant No. 1 was entitled for refund of Rs. 1,43,919. 20 Another application, according to the bank was moved by the respondent No. 4 on 18th August, 2005 before D. R. T. , Lucknow praying therein that the respondents were entitled to the benefit of O. T. S. 3rd scheme issued by R. B. I. for payment of Rs. 4,81,011. 80 only and claimed refund of Rs. 1,44,000/-paid by them. The bank opposed above applications asserting that the compromise settlement was for Rs. 15. 28 lacs not under any R. B. I. scheme and the respondents failed to honour that compromise depositing only Rs. 6. 25 lacs, therefore, the application moved by the respondents were liable to be rejected. According to the appellant, D. R. T. , Lucknow on 5th September, 2005 without going into the merits of the case illegally, arbitrarily rejected the application of the bank allowing the applications of the respondents for settlement to the extent of prayer for O. T. S. 3rd scheme. The case of the bank was that the compromise was for Rs. 15. 28 lacs and it was not under any R. B. I, guidelines but by mutual settlement, therefore, the learned D. R. T. , Lucknow has committed error going beyond it's jurisdiction accepting the application moved on behalf of the respondents imposing O. T. S. on bank without its consent. Hence, this appeal has been filed.

(3.) IN reply the respondents have contested this appeal contending that the so called compromise of Rs. 15. 28 lacs Annexure-I does not bear the signature of any of the respondents and this compromise was never finally accepted by them. Before D. R. T. , Lucknow they denied to have paid an amount of Rs. 6. 25 lacs in accordance with terms of compromise dated 29th May, 2000. According to the respondents the bank never filed any application before D. R. T. to point out any breach of terms of the said compromise. They contended that the guidelines of R. B. I. received for O. T. S. 3rd Scheme were applicable to their case and the bank was entitled only for a sum of Rs. 4. 81 lacs although they had deposited an amount of Rs. 6. 25 lacs which was in excess of the amount required to be deposited under O. T. S. 3rd scheme. They have challenged the so called compromise on the ground that it was not signed by any of the respondents. The respondents contended that the guidelines of the R. B. I. are mandatory in nature and the bank was liable to accept the same, therefore, they were entitled to refund of Rs. 1,43,919. 20. They pleaded that the bank failed to consider the fact that the amount due became N. P. A. on 16th September, 1985, therefore, the calculation of the amount due comes to be a total liability of Rs. 4. 81 lacs only. They challenged the contention of the bank for issuance of recovery certificate on the basis of so called compromise for payment of Rs. 9. 03 lacs. They gave the circumstances under which their consignment of Kendjian for East V of Amstardem Netherlands could not finally succeed, resulting in their failure to get the amount of above consignment. They pleaded their bona fides and pleaded that there was no deliberate default from their side in making payment of the dues. They supported the impugned order passed by D. R. T.