CANARA BANK Vs. BANK OF INDIA

JUDGEMENT

(1.) This petition has been filed by the petitioner -Canara Bank under Article 226/227 of the Constitution of India assailing order dtd. 10/4/2019 (Annexure P/19) passed by learned 25th Additional District Judge, Indore (MP) in execution proceedings as also award dtd. 19/8/2017 (Annexure P/10) passed by respondent No.1 - Bank of India through its Chief Manager, acting as an Arbitrator.

(2.) Considering the fact that the petition has essentially been filed against an order passed by the Civil Court in execution proceedings and an award by the Arbitrator, the present petition is being entertained under Article 227 of the Constitution of India only.

(3.) Brief facts giving rise to the present petition are that the petitioner is a Nationalized Bank in which another nationalized bank namely Syndicate Bank also got merged; the case of the petitioner is that Syndicate Bank had sanctioned a loan to respondent No.2 - M/s. Kamal Cotspin Private Limited along with other banks who are also involved in the aforesaid sanctioning of the loan and thus there was a Consortium of Banks in which respondent No.1 - Bank of India was the Consortium Leader. According to the loan sanction letters (Annexure P/1 and Annexure P/2), and loan agreement (Annexure P/3), in the case of pre-payment of loan, respondent No.2 would be liable to pay "pre-payment charges", as agreed by Consortium. It is admitted that the loan advanced by Syndicate Bank was pre-paid, as it was taken over by Axis Bank, because of which, the petitioner - Bank also charged and recovered "pre-payment charges" on respondent No.2. The aforesaid recovery was objected to by respondent No.2 on the ground that it was to be decided by the Consortium.