IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY EIGHTH DAY OF JANUARY TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH AND THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No: 5120 of 2008 BETWEEN: 1 M/s. Shobachand Shivjiram rep by its Proprietor Mr. Venugopal Loya S/o Roopchand Loya, R/o begumbazar, Hyderabad. 2 Mr. Venugopal Loya S/o Roopachand Loya Hindu, Proprietor, M/s. Shobachand Shivjiram, R/o Begumbazar, Hyderabad. 3 Smt. Kantabai W/o Venugopal Loya, R/o Begumbazar, Hyderabad. ... PETITIONERS AND State Bank of India, Begumbazar Branch, rep by its Branch Manager, Hyderabad. ...RESPONDENT Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue Writ, or Certiorari calling for the records relating to O.A.No.149/99 dated 13-9-2006 on the file of Debt Recovery Tribunal, Hyderabad as modified in R.A. No. 6/2007 dt 31-5-2007 on the file of the Debt Recovery Tribunal, at Chennai and Declare it as illegal and arbitrary and violative of Principles of natural justice and for a consequential order to quash the said order inthe interest of justice and pass such other order or orders as this Hon'ble Court may deems fit and proper. Counsel for the Petitioners: MR.CH.DHANAMJAYA Counsel for the Respondents: MR.T.D.PRASANNA KUMAR IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY EIGHTH DAY OF JANUARY TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH AND THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No: 6345 of 2008 BETWEEN: 1 M/s. Sreeji Industries, rep. by its Parnter, Sri Venugopal Loya, R/o. 15-7-214,215, Begumbazar, Hyderabad. 2 Venugopal Loya, S/o. Roopchand Loya, R/o. Begumbazar, Hyderabad. 3 Madhusudhan Kakani S/o. Satyanarayana Kakani, R/o. Begumbazar, Hyderabad. 4 M/s Jaisrikrishna Traders, (HUF) rep. by Mr. Venugopal Loya, Begumbazar, Hyderabad. 5 M/s Ladhuram Sitaram, (HUF) rep. by Mr. Venugopal Loya, Begumbazar, Hyderabad. ... PETITIONERS AND State Bank of India, Begumbazar Branch, rep. by its Branch Manager, Hyderabad. ...RESPONDENT Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a Writ of Certiorari calling for the records relating to O.A.No.557/1999 order dated 15.09.2006 on the file of Hon'ble Debts Recovery Tribunal at Hyderabad as confirmed modifying the order in R.A.8/2008, dt.31.05.2007 by the Appellate Tribunal at Chennai and quash the same by declaring it as illegal, null and void and for a consequential order to set aside the said impugned order in the interest of justice and to pass such other order or orders. Counsel for the Petitioners: MR.CH.DHANAMJAYA Counsel for the Respondents: MR.T.D.PRASANNA KUMAR IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY EIGHTH DAY OF JANUARY TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH AND THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No: 19309 of 2008 BETWEEN: State Bank of India, Begumbazar Branch, (now merged in Osmangunj Branch) Hyderabad. ... PETITIONER AND 1 M/s. Shobachand Shivjiram, Prop. Mr. Venugopal Loya, Aged Major R/o. H.No. 15-7-214, 215, Begumbazar, Hyderabad - 500 012. 2 Sri Venugopal Loya, S/o. Roopachand Loya, R/o. H.No. 15-7-214, 215, Begumbazar, Hyderabad - 500 012. 3 Smt. Kantabai, W/o. Venugopal Loya, R/o. H.No. 15-7-214, 215, Begumbazar, Hyderabad - 500 012. ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a writ, order or direction more particularly one in the nature of Writ of Certiorari by calling for records relating to OA No.149/1999 dated 13-9-2006 on the file of the Debt Recovery Tribunal, Hyderabad as modified in RA No. 6/2007 dated 31-5-2007 on the file of Debt Recovery Appellate Tribunal at Chennai, and declare it as illegal, arbitrary and without jurisdition and violative of principles of natural justice and for a consequential order to quash the said order, and pass such other order or orders. Counsel for the Petitioner: MR.MUDDU VIJAY Counsel for the Respondents: MR.CH.DHANAMJAYA FOR RVAK-1-3 The Court made the following: COMMON ORDER: (per Hon’ble Sri Justice V. Eswaraiah) WP.Nos.5120 and 19309 of 2008 filed by three petitioners, who are the borrowers and the State Bank of India respectively, arise out of the order passed by the Debts Recovery Tribunal in O.A.No.149 of 1999 dated 13.09.2006 as modified in R.A.No.6 of 2007 dated 31.05.2007 on the file of the Debts Recovery Appellate Tribunal, Chennai. 2. WP.No.6345 of 2008 has been filed by other borrowers against the order passed by the Debts Recovery Tribunal in O.A.No.557 of 1999 dated 15.09.2006 as confirmed modifying the order in R.A.No.8 of 2008 dated 31.05.2007 by the Debts Recovery Appellate Tribunal, Chennai. 3. The State Bank of India (SBI), petitioner in WP.No.19309 of 2008, filed a suit for recovery of money payable by the petitioners in WP.No.5120 of 2008 and the same was transferred to the Debts Recovery Tribunal (DRT), Hyderabad and numbered as O.A.No.149 of 1999 and the said OA was allowed holding that the borrowers are liable to pay a sum of Rs.22,96,485.90 ps along with current and future interest @ 17.5% per annum with quarterly rests from the date of filing of the suit till the date of realization. Aggrieved by the said order, the borrowers preferred an appeal in R.A.No.6 of 2007 on the file of the Debts Recovery Appellate Tribunal, Chennai and the appellate authority reduced the rate of interest from 17.5% to 12% per annum simple from the date of filing of the suit till the date of realization. Aggrieved thereby, SBI filed WP.No.19309 of 2008 insofar as the reduction of rate of interest from 17.5% to 12%. 4. SBI also filed an application in O.A.No.557 of 1999 for recovery of a sum of Rs.90,19,789.11 ps and the DRT by order dated 15.09.2006 allowed the application declaring that the petitioners in WP.No.6345 of 2008 are jointly liable to pay to SBI a sum of Rs.90,19,789.11 ps along with current and future interest @ 18% per annum with quarterly rests from the date of the suit till the date of realization. Aggrieved by the said order, the petitioners in WP.No.6345 of 2008 preferred an appeal in R.A.No.8 of 2007 on the file of the Debts Recovery Appellate Tribunal, Chennai and the appellate tribunal by order dated 31.05.2007 reduced the rate of interest from 18% to 12% per annum simple from the date of filing of the suit till the date of realization. However, SBI has not questioned the order of the appellate Tribunal dated 31.05.2007 in R.A.No.8 of 2007 in reducing the rate of interest from 18% to 12%. 5. Learned counsel for the petitioners submits that the petitioners/borrowers addressed a letter dated 07.06.2004 offering to pay a sum of Rs.1.30 crores towards full and final settlement of all three accounts, which are the subject matters of O.A.Nos.149 and 557 of 1999 before the DRT. He further submits that SBI vide its letter dated 10.08.2004 requested Central Bureau of Investigation (CBI) to accord its concurrence for the full and final settlement of all three accounts viz. M/s. Shreeji Industries, M/s. Shobchand Shivjiram and M/s. Jagannath Nanda Kishore for a sum of Rs.1.30 crores. SBI also indicated that they have proposed the compromise with a view to recovering the funds locked in without in any way affecting the CBI case. 6. Learned counsel for the petitioners further submits that the Superintendent of Police, CBI, SPE, Hyderabad vide its letter dated 08.09.2004 declined to give concurrence on the ground that the borrowers have been convicted for the offence under Sections 120-B and 420 of the Indian Penal Code, 1860 and since these offences come under the ambit of compoundable offences, the liability of the accused persons would be exonerated if the Bank agrees to the proposal of payment of Rs.1.30 crores in full and final settlement of the accounts. He further submits that out of Rs.1.30 crores an amount of Rs.13 lakhs and Rs.90,20,000/- was also deposited in the month of September 2007. Thus, it is stated out of Rs.1.30 crores an amount of Rs.1,03,00,000/- was already deposited but the compromise could not be arrived at on account of the objection raised by CBI for receipt of amount for according compromise. 7. Mr. T. Niranjan Reddy, learned counsel appearing for CBI submits that the writ petitioners herein have been tried for the criminal offence under Sections 120-B and 420 IPC and they have been convicted by the Special Court CBI and the said conviction orders have been confirmed by this Court against which the accused/writ petitioners have filed Special Leave Petitions on the file of the Supreme Court and the same are pending. 8. We are of the opinion that the writ petitioners/borrowers are liable to pay the amounts due and payable to the bank. Even if the Supreme Court upholds the conviction orders, the bank has to recover the amounts from the borrowers. The recovery proceedings are different and distinct from that of the criminal proceedings. Merely because the bank received the amounts towards full and final settlement, we are of the opinion that the criminal liability cannot be absolved. As far as the criminal proceedings are concerned the accused are liable for punishment and insofar as the civil liability is concerned, the petitioners/borrowers are liable to pay the same. Any compromise entered between the borrowers and the bank will not come in the way of prosecution, therefore, we are of the opinion that CBI cannot object for such settlement of payment of money by the borrowers to the bank. As already stated that a sum of Rs.1.30 crores had been deposited, if there remains any payment of interest on the remaining amount it is open to the respective parties to work out their grievances. Accordingly, we dispose of the writ petitions holding that the Central Bureau of Investigation (CBI) has no say in the matter of settlement insofar as the recovery of amounts under the compromise between the petitioners/borrowers and the bank is concerned. However, it is open to the bank and the borrowers to settle their accounts in accordance with the compromise arrived at by them. There shall be no order as to costs. ______________ V. ESWARAIAH, J _____________________ VILAS V. AFZULPURKAR, J January 28, 2009 Note: Furnish C.C. of the order in two days. (B/o) DSK