Debt Recovery Appellate Tribunal - Mumbai
State Bank Of India vs Kamalesh Ice Industries And Ors. on 30 December, 2002
Equivalent citations: IV(2004)BC241
ORDER
Pratibha Upasani, J. (Chairperson)
1. This Misc. Appeal is filed by the appellant State Bank of India/Original Applicant being aggrieved by the order dated 23.4.2002 passed by the learned Presiding Officer of Debts Recovery Tribunal Ahmedabad in Civil Misc. Application No. 7 of 2002, arising out of Original Application No. 81 of 1995. By the impugned order, the learned Presiding Officer allowed the application made by the original defendants (present respondent Nos. 1 to 4) wherein, they had inter alia sought extension of time to make balance payment to the applicant Bank till 30.6.2002 though there were consent terms filed by the parties. This payment was to be made much earlier. In short, the application was made by the defendants praying for directions from the Tribunal that the Bank be directed to accept payment of instalment beyond the time which was fixed between the parties as per the consent terms. This extension was granted by the Tribunal and this is what is hurting the Bank and hence, the present Misc. appeal has been filed before this Appellate forum.
2. Few facts, which are required to be stated, arc as follows:
State Bank of India had filed Original Application No. 81 of 1995 against the defendants. The parties arrived at settlement and the case was put up before Lok Adalat for compromise. The consent terms were reduced into writing and were placed before the Tribunal for passing appropriate orders and for issuing recovery certificate. The consent terms between the applicant State Bank of India and the respondents were as follows:
"(a) The respondents waive all the contentions and objections taken in their affidavit contesting the applicant Bank's case. The defendants hereby admit the claim of Rs. 17,11,324.05 ps. together with interest at the rate of 16.50% per annum on the cash credit account and 17.50% per annum on the medium term loan account from the date of the application that is 14th August, 1995 along with the costs of the application and for that an appropriate order for issuance of Recovery Certificate may kindly be passed by this Hon'ble Tribunal.
(b) Provided always that the respondents have on 23rd day of February, 2001 paid an amount of Rs. 2,03,387/- to the applicant Bank towards the suit claim and if the respondents jointly or severally pay to the applicant Bank the following sum by quarterly instalments as indicated herein below, the entire claim of the applicant Bank shall stand fully satisfied. The parties request this Hon'ble Tribunal that appropriate directions may be issued to this effect while issuing a Recovery Certificate as prayed above.
(a) 1st quarterly instalment on or Rs. 1,52,450/- + interest at PLR
before 17.4.2001 from 18.1.2001
(b) 2nd quarterly instalment on or Rs. 1,52,450/- + interest at PLR
before 17.7.2001 from 18.1.2001
(c) 3rd quarterly instalment on or Rs. 1,52,450/- + interest at PLR
before 17.10.2001 from 18.1.2001
(d) 4th quarterly instalment on or Rs. 1,52,450/- + interest at PLR
before 17.1.2002 from 18.1.2001
Total Rs.
If the respondents fail to pay any of the above said instalments before their due dates, the applicant Bank shall be entitled to recover the entire claim under the recovery application, being Rs. 17,11,324.05 ps. together with interest and costs as prayed for in the recovery application at Para 20 Sub-para (A)".
3. On 24.3.2001, the learned Presiding Officer ordered issuance of recovery certificate in terms of compromise and ordered that the said compromise would form part of the recovery certificate. He accordingly disposed of the Original Application No. 81 of 1995.
Subsequently, it appear that as per the consent terms, one quarterly instalment of Rs. 1,52,450/- + interest at PLR from 18.1.2001, which was to be paid on or before 17.4.2001, was in fact paid by the respondents. Thereafter, application was made by the defendant on 23.1.2002, wherein averments were made that consent terms were signed by them, without comparing the same with the terms and conditions of acceptance of the proposal under a belief that the applicant Bank must have prepared the consent terms in conformity with the terms and conditions of acceptance of the proposal, however, they found that the amount credited to their account after transfer of the account to P.B. Account had not been taken into consideration while arriving at the amount of compromise and that there was bona fide mistake on the part of the applicant and hence, the Bank be directed to accept the balance amount on or before 30.4.2002 and be directed not to initiate any recovery proceedings till disposal of the application.
The applicant Bank opposed the said application by filing their reply dated 15.4.2002. In paragraph 7, it was submitted by the Bank that they had filed O.A. No. 8171995 on 14.8.1995 for recovery of Rs. 17,11,324.05 with interest at the rate of 16.5% on cash credit and 17.5% on medium term loan. It was further averred that against the said dues, the Bank had agreed to accept the sum of Rs. 8,13,187/- towards full and final payment of the amounts claimed in the original application and that nothing had prevented the defendants to approach the Bank asking for adjustment of the amount paid by them subsequent to 31.3.1997. It is further averred that the defendants approached the Tribunal only on 23.1.2002 after having failed to pay instalments due on 17.7.2001, 17.10.2001 and 17.1.2002 which clearly showed their (dishonest) intentions. It was further averred that the defendants could have come for reconciliation, if they had found discrepancies in the account and that the application was made because Recovery Officer had initialed recovery proceedings and the defendants were interested only in delaying-the proceedings. It was therefore, prayed that the application be dismissed.
3.A. It is the contention of Mr. Narsana, the learned Advocate appearing for the applicant Bank, that the defendants committed default in making payment of the second quarterly instalment on or before 17.7.2001 and on this default, the Bank, as per the consent terms, became entitled to recover entire claim for Rs. 17,11,324.05 together with interest and costs as prayed by them in the recovery application. It is contended by Mr. Narsana that the Tribunal had no authority to extend the time in this way, thereby depriving the Bank from immediately executing the decree which had become executable upon default committed by the defendants," that the learned Presiding Officer ought not to have re-written the contract between the parties and that the impugned order was therefore, illegal.
4. Advocate appearing for the defendants, simply supported the impugned order, submitting that the learned Presiding Officer was empowered to extend the time, even though there were consent terms.
5. I have heard Mr. Narsana for the appellant Bank and Mr. Iyyar for the respondents. I have also gone through the proceedings including the impugned order and in my view, the learned Presiding Officer has not committed any error in granting extension of time to pay the instalment, though as per the consent terms filed by the parties, this payment was to be made before particular date and on default of even one single instalment on part of the defendants, entire amount as mentioned in the recovery certificate was to become immediately payable to the applicant Bank.
It is true that normally when the consent terms are filed specifying certain terms and conditions, the Court should not re-write the said agreement between the parties. It is also true that when consent terms are filed by the parties, times is not to be extended for merely asking. However, it is not that the Court/Tribunal is powerless to extend the time when consent decree is passed in accordance with the consent terms filed by the parties. The Tribunal/Court always has such power under Sections 148 and 151 of the Code of Civil Procedure to extend the time in the interest of justice or to prevent failure of justice. Identical power is conferred on the Debts Recovery Tribunal vide Section 19(25) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
Reference can be made in this context to the case of Industrial Credit and Investment Corporation of India Limited v. Grapco Industries Limited, AIR 1999 SC 1975, wherein it is observed by the Supreme Court that, "the Tribunals established under the recovery of Debts Due to Banks and Financial Institutions Act, 1993, can exercise power of Civil Court as contained in Civil Procedure Code..... rather it can travel beyond the Civil Procedure Code and the only fetter put on its powers is to observe principles of natural justice."
Reference can also be made to the celebrated judgment of Smt. Penyakkal and Ors. v. Smt. Dakshyani, reported in AIR 1983 Supreme Court 428, wherein it was laid down by the Supreme Court that time fixed by the consent decree also can be extended by the Court and the Courts has such power.
Another decision comes to my mind is SBI Commercial and International Bank v. Badridas Gauridatt Pvt. Ltd., 2002(2) Mh. L.J. 749, wherein the learned Single Judge of the Bombay High Court took a view that, "the Court can exercise jurisdiction under Section 148 of the Code of Civil Procedure to extend time if it is in the interest of justice."
It was further observed in the same case by the learned Single Judge as follows;
"consent terms filed by the parties had merged in the order of the Court as such and the Court can very well extend the time in making payment of the instalments and there is no necessity of taking consent from the decree holder".
It was also observed that, "the consent terms having been filed, they become order of the Court and the Court is in-charge of the matter and not the decree holder."
6. I have gone through the abovementioned authorities and I am in respectful agreement with the proposition propounded in those cases.
7. In the case of Smt. Periyakkal and Ors. v. Smt. Dakshyani, (supra), the proceedings had arisen during the course of execution of the decree. The respondent Dakshyani had sued to recover sum of Rs. 7324.86 from Narayana Swami, husband of Periyakkal and the suit was decreed with costs. In the execution proceedings, certain properties were brought to sale. Decree holder purchased the property at the execution sale for sum of Rs. 28,000/-. In the meanwhile, Narayana Swami had expired and his legal representatives filed application under provisions of Order 21 Rule 90 of the Code of Civil Procedure for setting aside the sale on various grounds. The executing Court dismissed the application, but on an appeal preferred by the appellants, the sale was set aside. The respondent filed second appeal to the High Court of Karnataka. At this stage, the parties entered into compromise with the leave of the Court because such leave was necessary as many of the appellants were minors then. The Court granted the leave and made an order in terms of the compromise. As per the compromise, the appellants agreed to deposit the amount and the respondents agreed to receive a sum of Rs. 60,000/- in full and final settlement of the decree. It was also agreed that, if the deposit was made on or before November 30, 1976, the sale, which though confirmed by the Trial Court but set aside by the Appellate Court, was to stand set aside and the second appeal of the respondents was to stand dismissed. If the amount of Rs. 60,000/-was not deposited on or before November 30,1976, the second appeal was to stand allowed and the sale was to stand confirmed. Time was stated to be essence of the contract between the parties. The appellants were permitted under the compromise to raise funds by sale, mortgage, etc., of the property in question. The appellants, however, failed to deposit the amount in terms of compromise. It appears that they were unable to raise necessary funds as they were not able to evict the tenant, who was in occupation of the property. Finally, the appellants filed application purported to be under Sections 148 and 151 of the Code of Civil Procedure to extend the time for depositing sum of Rs. 60,000/- in terms of compromise dated 24.6.1976. The High Court dismissed the application on the ground that the Court could not extend time where time had been stipulated by the parties themselves in the compromise arrived at between them. The High Court purportedly relied upon decision of the Supreme Court in the case of Hukumchand v. Bansilal, AIR 1968 SC 86.
8. It was, however, urged on behalf of the appellants that there was no limitation on the powers of the Court to extend time under Section 148 of the Code of Civil Procedure. The appellants Advocate distinguished the decision of the Supreme Court in Hukumchand v. Bansilal (supra). He submitted that the real question which was considered in Hukumchand's case was, if a mortgaged property was sold in execution of a mortgage decree and if the application to set aside the sale under Order 21 Rule 90 of the Code of Civil Procedure was dismissed but time was granted by consent of the parties for depositing the decretal amount, etc., could lime be extended for depositing the decretal amount, etc. to avert the confirmation of sale under Order 34 Rule 5 of the Code of Civil Procedure, except with the consent of the parties.
Answer to this was "no", the reason being that on the dismissal of the application under Order 21 Rule 90 of the Code of Civil Procedure, confirmation of sale under Order 21 Rule 92 had to follow as a matter of course. Order 34 Rule 5 merely permitted the deposit to be made at any time before confirmation of the sale and there could be no question of extending the time for such deposit. It parties agreed to have the confirmation of sale postponed, further postponement would be possible by agreement of parties only. The Court would have no say in the matter and Section 148, C.P.C. would have no application. However, in the case of Periyakkal v. Dakshyani, (supra) the facts were otherwise and there was no statutory compulsion like the one in Hukumchand's case (supra). This distinction was well demonstrated by the learned Advocate appearing for the appellants, in Periyakkal v. Dakshyani's case (supra), submitting that there was no statutory compulsion. Therefore, the Supreme Court in Periyakkal v. Dakshyani's case (supra), observed that, "wherein an appeal arising out of an application under Order 21 Rule 90, the parties entered into a compromise and invited the Court to make an order in terms of the compromise, which the Court did, the time for deposit stipulated by the parties became the lime allowed by the Court and this gives the Court the jurisdiction to extend lime in appropriate cases." The Supreme Court further observed that "time would not be extended ordinarily, nor for the mere asking. It would be granted in rare case to prevent manifest injustice."
The Supreme Court further observed that, "the Court would not rewrite a contract between the parties but the Court would relieve against a forfeiture clause, and where the contract of the parties has merged in the order of the Court, the Court's freedom to act to further the ends of justice would surely not stand curtailed."
9. In the present case at hand, principle laid down by the Supreme Court in case of Smt. Periyakkal and Ors. v. Smt. Dakshyani (supra), is squarely applicable. The facts are almost identical. Parties arrived al compromise as per the consent terms submitted by them to the Tribunal and invited the Tribunal to pass decree in terms of the consent terms. The Tribunal accordingly passed the decree in terms of the consent terms. As per the consent terms, the first instalment was paid on 17.4.2001. Thereafter, there was default committed by the defendants. However, an application came to be made to the Tribunal praying for extension of time, which granted by the learned Presiding Officer after hearing both the sides.
10. Keeping in mind, principle laid down by the Supreme Court in Smt. Periyakkal's case (supra), no fault can be found with the impugned order. Though the learned Presiding Officer had not discussed any case law on the point, the impugned order is correctly passed and the power to extend the time was exercised by the Tribunal.
The Apex Court in the case of Mahanth Ram Das v. Ganga Das, AIR 1961 S.C. 882 has ruled that Section 148 of the Code of Civil Procedure empowers the Court to deal with events that might arise subsequent to an order for the purpose of enlarging the time for payment even though it had been peremptorily fixed. It is further observed that such procedural orders, though peremptory, are in essence, in terrorem, so that dilatory litigants might put themselves in order and avoid delay and that they do not, however, completely estop a Court from taking note of events and circumstances, which happen within the time fixed.
11. In the present case at hand, reason given by the defendants for making application is that the terms and conditions, subsequent to their putting signatures upon them, were not founded to be as per the compromise proposal. Apparently this contention of the defendants appears to be unbelievable as the defendants are businessmen, well versed in the Banking transactions and are not so gullible. Some grievance about recalculation of certain amount also was made, but even that was improper. The case was settled before the Lok Adalat in terms of communication dated 24.1.2001 sent by the Bank. It was a without prejudice proposal. It was this proposal, which culminated in the consent terms. Be it as it may, it cannot be said that Tribunal had no power or authority to extent the time as prayed by the defendants.
In view of the above discussion, in my view, the impugned order was correctly passed. The appeal, therefore will have to be dismissed. Hence, following order is passed.
ORDER Misc. Appeal No. 224/02 is dismissed.