Case: P. Vijayakumari and Ors Vs. Indian Bank

The Original Application before the Debt Recovery Tribunal ("DRT") by the Bank was filed seeking recovery of an amount of Rs. 62,96,582.68 (Rupees sixty two lakhs ninety six thousand five hundred eighty two and paise sixty eight only) being the unpaid dues along with interest as on the date of filing of the O.A. Interest at 19.8 % p.a. with quarterly rests from date of filing of the O.A. till date of payment was also prayed for. The total financial accommodation made available to the Bank was to the extent of Rs. 23 lakhs2. In the Lok Adalat held on 10.09.2004 the parties had agreed on an amount of Rs. 34.5 lakhs payable within three months. The Appellants defaulted and paid a sum of Rs. 3 lakhs on 8.02.2005 and a further sum of Rs. 35 lakhs on 17.10.2006 in terms of a conditional order passed by the DRAT staying the sale/auction of the mortgaged property. Finally, on 29.10.2006, a further payment of Rs. 3 lakhs was made. In the above manner a sum of Rs. 41 lakhs stood paid by the Appellants to the Respondent-Bank as on 29.10.20063. Before the DRT, the Appellants had sought for extension of time for payment and condonation of delay that had occurred in adhering to the time schedule of payment as agreed to in the Lok Adalat. The DRT dismissed the application which decision was reversed in appeal in DRAT. Thereafter, the said order of the DRAT was questioned by the bank in a writ petition before the High Court. The writ petition being allowed by the impugned order the Appellants are before us in this appeal4. By order dated 7.12.2017 which is in the terms extracted below, we had directed as follows:Having heard the learned Counsels for the parties we direct the Appellants to indicate to us the amount which the Appellants would be in a position to offer to finally close the matter. The Respondent-Indian Bank will also indicate the amount that the Bank expects to be offered. The said decision of the Bank will be taken at the appropriate level and will be placed before the Court in a sealed cover.      5. The Appellants, pursuant to the aforesaid Order dated 7.12.2017, has made an offer of an additional payment of Rs. 10 lakhs by offering a compensation of Rs. 3,000/- per day (approx.) for the delay of 320 days that had occurred in making the payment as per the terms of the settlement reached in the Lok Adalat.

Court's reasoning:
6. The Respondent-Bank has not come up with any concrete offer and has placed before the Court an extract of the statement of account of the Appellants as on date which goes to show that the total dues as per the Banks statement of account is Rs. 8,17,65,148/- (Rupees eight crore seventeen lakhs sixty five thousand one hundred forty eight only)7. We have considered the matter. There was undoubtedly some delay in payment of the amount due as per the terms of the settlement reached in the Lok Adalat. It was also agreed by and between the parties that if the terms of payment including the time schedule of payment is not adhered to, the Respondent-Bank will be at liberty to recover the entire amount due. The DRAT in the impugned order had considered the matter and had taken the view that even on the face of the express terms between the parties that the bank would have a right to recover the full amount due in the event of default on the part of the Appellants, the same was not the only course of action or the sole option and that on the grounds shown for the delay the same is liable to be understood in favour of the borrower. Accordingly, the matter was closed. In the writ petition filed by the Bank the position was reversed8. In the facts of the present case, the view taken by the learned Appellate Tribunal (DRAT), as noted above, cannot be said to be so wholly unreasonable or unsustainable so as to justify interference by the High Court. If the agreed amount stood paid though with some delay, condonation of the delay is a possible course of action, if the grounds for delay justified a departure from what was also agreed upon, i.e., the right of a Bank to recover the entire dues. All would depend on the facts of each case.