Case: Central Bank Of India Vs. M/S. Maruti Acetylene Co. Pvt. Ltd

decision in the appeals preferred by the petitioner-Company and that will not stand in the way of the respondent-Bank to make one-time settlement with the petitioner-Company, taking into account the adjustment of Rs. 25 lakhs as made pursuant to the Debt Recovery Appellate Tribunals order." 8. When the matter went back to the Appellate Tribunal, the appeal preferred by the respondent was dismissed opining: "On a careful consideration of the entire factual aspects of the matter, in the light of the above principles of law laid in the decisions referred to above, this Tribunal has no other option except to conclude that since the OTS offer made by the Appellate had not been accepted by the Respondent-Bank, it is no longer necessary to call either the Branch Manager of the Bank as a witness for the cross-examination. In any view of the matter, I am unable to find any irregularity or illegality in the impugned orders so as to interfere with the same and it follows that the Appeals have to be dismissed by confirming the orders passed by the DRT." 9. Respondent preferred a civil revision application before the High Court once again. The High Court passed an interim order on or about 30th April, 2008, wherein referring to an earlier order dated 16th April, 2008 it directed as under: "From the earlier order it will be evident that this Court, with a view to put an end to the dispute, wanted the bank to reach one time settlement for Rs. 1 crore, inclusive of Rs. 25 lakhs already deposited by the petitioner pursuant to the Courts order. The bank was allowed time to inform the Court in this matter vide order dated 16th April, 2008 and it was observed that the rest of the amount of Rs. 75 lakhs may be ordered to be paid by the Court in favour of the bank. Learned counsel appearing on behalf of the bank submitted that for one or other reason the Board of Directors of the bank could not deliberate on the issue and will take a decision.in the circumstances, while we grant further time to the respondent-Bank, allow the petitioner to deposit the rest of the amount of Rs. 75 lakhs by 30th May, 2008 with the bank with further direction to the bank to accept the same and keep it in an interest bearing no-lien account subject to the decision of this case. It is also made clear that if the bank do not accept the offer of the one time settlement, then this Court may direct the Bank to refund the entire amount, i.e. the amount of (Rs. 25 lakhs and Rs. 75 lakhs) paid by the petitioner in view of courts order along with the accrued interest and, therefore, may remit the matter back to the Tribunal/Appellate Tribunal to decide the case on merits." 10. It is now accepted at the Bar that the respondent did not agree to the aforementioned proposal of the High Court that the One Time Settlement should be confined to Rs.1 crore. When the matter came up before the High Court again on 13.6.2008, by reason of the impugned judgment the appellant-Bank was directed to refund the entire amount of Rs.1 crore with interest at the same rate to which the respondent was liable to pay i.e. the contractual rate of interest, in favour of the respondent within 7 days. The appellant is, thus, before us. 11. Mr. Jaideep Gupta, learned senior counsel appearing on behalf of the appellants would raise two contentions in support of these appeals. Firstly, that the sum of Rs. 25 lakhs having been adjusted against the amount of loan payable by the respondent, no direction could have been issued for refund in relation thereto. Secondly, it was contended that having regard to the fact that the amount of Rs. 75 lakhs was deposited on no-lien account which carries a low rate of interest, the direction by the High Court to refund the said sum with contractual rate of interest must be held to be illegal. 12. Mr. Gurukrishna Kumar, learned counsel appearing on behalf of the respondent, on the other hand, contended that the impugned judgment has been passed in continuation of the High Courts order dated 30th April, 2008 and in view of the fact that the correctness of the said order has not been questioned, the appellant should not be permitted to raise the aforementioned contentions before us. 13. It is accepted at the Bar that the matter is likely to be taken up by the High Court on 21.7.2008. Indisputably, when the High Court enters into the merit of the revision application, it shall take into consideration all aspects involved therein, including the offer of the respondent vis-a-vis the orders passed by the Debt Recovery Tribunal and the Appellate Tribunal. 14. Be that as it may, having regard to the fact that the Appellate Tribunal in its order directed adjustment of the aforementioned amount of Rs. 25 lakhs, which in view of the dismissal of the civil revision application has attained finality, in our opinion, at this interlocutory stage the High Court was not correct in issuing a direction in that behalf. 15. So far as the rest of the amount of Rs. 75 lakhs is concerned, it stands accepted that the amount was deposited in a no-lien account. 16. The High Court, therefore, should have directed refund of the said amount with interest only accruing thereupon having regard to the fact that the same was deposited in a no-lien account. The High Court, therefore, in our opinion, was not correct in directing that the interest payable on the sum of Rs. 75 lakhs would be the contractual rate. 17. We, therefore, set aside only that part of the impugned order by which the Bank was directed to refund the entire amount with the contractual rate of interest. The High Court while hearing the matter shall consider the same on its own merit.18.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]It is accepted at the Bar that the matter is likely to be taken up by the High Court on 21.7.2008. Indisputably, when the High Court enters into the merit of the revision application, it shall take into consideration all aspects involved therein, including the offer of the respondent vis-a-vis the orders passed by the Debt Recovery Tribunal and the Appellatethat as it may, having regard to the fact that the Appellate Tribunal in its order directed adjustment of the aforementioned amount of Rs. 25 lakhs, which in view of the dismissal of the civil revision application has attained finality, in our opinion, at this interlocutory stage the High Court was not correct in issuing a direction in thatfar as the rest of the amount of Rs. 75 lakhs is concerned, it stands accepted that the amount was deposited in a no-lienHigh Court, therefore, should have directed refund of the said amount with interest only accruing thereupon having regard to the fact that the same was deposited in a no-lien account. The High Court, therefore, in our opinion, was not correct in directing that the interest payable on the sum of Rs. 75 lakhs would be the contractualtherefore, set aside only that part of the impugned order by which the Bank was directed to refund the entire amount with the contractual rate of interest. The High Court while hearing the matter shall consider the same on its own merit.