Civil Writ Petition No.6100 of 2011 : 1 : IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: April 06, 2011 Canara Bank, Karol Bagh, New Delhi ...Petitioner VERSUS The Debts Recovery Tribunal, New Delhi & others ...Respondents CORAM: HON'BLE MR.JUSTICE RANJIT SINGH 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? Present: Mr.R.S.Bhatia, Advocate, for the petitioner. ***** RANJIT SINGH, J. M/s Septu (India) Pvt. Ltd.-respondent No.3 had approached the petitioner-bank for sanction of credit facilities. Considering the request of the respondent-company, the petitioner- bank sanctioned working capital facilities in the year 1992. In the year 2001, the limit was enhanced to ` 75.00 lacs and SDB to `20.00 lacs. Subsequently, agreement was executed where respondent No.3 agreed to pay interest @ 3.50% per annum above the ongoing Civil Writ Petition No.6100 of 2011 : 2 : PLR or at such other rates as may be revised by the petitioner-bank from time to time with a minimum of 15.25% per annum to be compounded quarterly. Some documents have been placed on record in this regard. This loan became irregular and was declared Non Performing Asset (NPA) on 1.10.2001. The petitioner-bank filed an application for recovery of ` 1,75,20,418-17P against respondent No.3 to 6. At the time of filing of the recovery application, the prevailing rate of interest was stated to be 17.25% per annum with monthly rests, which included 2% penal interest payable in case of contingencies mentioned in the agreement. The petitioner-bank accordingly made a claim at the afore-mentioned rate of interest pendent lite and future as per the agreed rate. The Debts Recovery Tribunal allowed the application and permitted pendente lite and future interest @15% per annum from the date of original application till the realisation. During the pendency of the original application, the loanee had repaid an amount of ` 18,75,000/- on 20.7.2008, ` 54,96,700/- on 8.8.2008, `50,000/- on 2.9.2009 and ` 10,000/- on 24.2.2010. The Bank accordingly was asked to submit a revised statement of account adjusting the above noted amounts. On the basis of this, calculation was submitted, which is on record as Annexure P-2. Respondent Nos.3 to 5 filed an appeal against the order before the Debts Recovery Appellate Tribunal, which has reduced the rate of interest from 15% to 12% per annum simple. Aggrieved Civil Writ Petition No.6100 of 2011 : 3 : against the same, the Bank has now filed the present petition. Counsel for the petitioner submits that the impugned order is non-speaking and has been passed without giving out any justification for reducing the rate of interest. The counsel would also contend that agreed rate of interest could not have been interfered with. The plea that rate of interest is reduced without giving any reason is misconceived. The Appellate Tribunal has made reference to the judgments to say that rate of interest has to be fair. This is good enough a reason to interfere. In State Bank of India Vs. M/s. Sarathi Textiles & Ors, 2008(3) SCALE 409, Hon'ble Supreme Court has clearly observed that the act stipulates that the provisions of Civil Procedure Code will have no application except certain provisions thereof. A special procedure having been provided in the special enactment for recovery of debts due to the bank and financial institutions, the question of considering the provisions of Order 34 Rules 2, 3, 4 and 11 of CPC does not arise. It is held that prima facie Sub-section (20) of Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 confers a discretion on the Tribunal to award interest on an application being filed as it thinks fit to meet the ends of justice. Otherwise also, the rate of interest charged by the Canara Bank appears to be highly excessive and unreasonable. There may have been default on the part of the loanee for which his account has been declared NPA, but he seems to have made sincere efforts to discharge his liability. The Bank, being a public sector institution, cannot be seen to be acting in an unfair and arbitrary manner. The aim should be to realise the amount Civil Writ Petition No.6100 of 2011 : 4 : while being reasonable in dealing. It is not a case that no interest is being awarded on the money advanced by the Bank. The availability of finance for commercial use in the market can also not be completely ignored. The reliance by the Bank on the agreed terms are required to be examined in the background of the position that the loanee really has no choice but to accept the terms and conditions offered by the Bank at the time of grant of loan. In a way, the Bank always is in a position of dominance and loanee obviously is in need of money for his commercial venture and would hardly have any choice but to accept the terms and conditions offered by the Bank. Thus, the Tribunal as well as the Appellate Tribunal have been fair in reducing the rate of interest notwithstanding the agreed terms. Strictly speaking, if the petitioner would insist on adhering to the agreed terms, they may also have then to make an approach before a civil court forum to resolve the dispute arising out of agreed terms between the parties. In that event, writ may not be an appropriate remedy for the petitioner bank to invoke if the rate of interest is being contested. I, therefore, find no justification to interfere in the impugned order passed by the Tribunal. The writ petition, therefore, is dismissed in limine. April 06, 2011 ( RANJIT SINGH ) ramesh JUDGE