Debt Recovery Appellate Tribunal - Allahabad
Punjab And Sind Bank vs Sterling Malt And Food (P) Ltd. And Ors. on 9 November, 2005
Equivalent citations: III(2006)BC1
JUDGMENT
P.K. Deb, J. (Chairperson) This appeal has been preferred against the final judgment and order passed in T.A. No. 387/98, whereby and whereunder the claim of the appellant Bank for a sum of Rs. 23,35,565.92 has been rejected on the ground that the case was not maintainable as there was already compromise between the appellant and the respondents.
The brief facts of the case are as follows:
1. Respondent No. 1 Sterling Malt and Food (P) Ltd. is a Private Company registered under Indian Companies Act having its registered office at New Delhi and Factory at District Moraina, Madhya Pradesh. It was manufacturing malts. Other respondents are its Directors and guarantors. The loan was taken by the company time-to-time and enhancement was also made and ultimately loan account of the respondents became sticky, when an amount of Rs. 23.00 lakh and odd as mentioned above had remained unrecovered. A suit was filed before the Court of District Judge, Gwalior, M.P. for recovery of said sum together with interest pendente lite and future and also for costs and the same suit was registered as Civil Suit No. 6-B/87. The respondents were not taking proper steps in that suit and ultimately when the Tribunal was set up, then the said suit was transferred to the DRT, Jabalpur and was registered as T.A. No. 387/98. It should be mentioned here that against the same respondents for some other loans, another Civil Suit was filed by the appellant Bank before the District Judge, Moraina, Madhya Pradesh for recovery of Rs. 3,84,29,6707- together with interest and cost. The Moraina suit was compromised between the parties on filing of a joint petition by the appellant and the respondents and on the basis of such joint compromise petition, a compromise decree was passed by order dated 25th October, 1991 and on the basis of that decree, an Execution Case was filed. On establishment of the Tribunal, such Execution Case being T.A. Execution No. 154/98 was also transferred to the DRT, Jabalpur. Both matters were taken side by side by the learned Tribunal at Jabalpur and held on the basis of terms and conditions enumerated in the joint compromise petition in the suit at Moraina. By that compromise practically the present recovery proceedings had also been compromised and as such the present case is not maintainable, hence dismissed. Thus the dismissal order has been recorded not on merits but on the ground of compromise being effected in another suit/proceeding.
2. Various grounds have been taken by the appellant Bank attacking the impugned judgment and order. Practically, the present proceeding was not being contested in their proper sense, rather some objection was filed in T.A. Execution No. 154/98 and such objection filed by the respondents was also requested to be treated as their objection in the present suit/proceeding. The plea was that in view of the terms of compromise in the Moraina Court, the present suit should also be construed as compromised and as such not maintainable.
3. The contention of the appellant is that there was no such compromise in the present proceeding as no compromise petition filed in the present proceeding either at Civil Court where it was pending at first or before the Tribunal where it has been transferred. It was further contended that the suit of Rs. 3.00 crores and odd was compromised in the Moraina Court for a sum of Rs. 1.00 crore and odd to be paid by two instalments and if the instalments failed, then the decree should be construed as of the whole claim as made by the Bank before the Moraina Court. The terms of the compromise, which have been relied on, have been challenged both on ground of law and on fact. It should be mentioned here that in view of the compromise being arrived at, no payment has yet been made from the side of the respondents and the Execution Case No. T.A. 154/98 remains pending and dues being unrecovered. According to the appellant Bank, when recovery has not been made as per the terms of the compromise, then the whole of the claims before the Moraina Court and also the present proceeding which was previously pending before Gwalior Court remain as it is to be paid by the respondents.
4. On the other hand, learned Counsel for the respondents has very much supported the judgment and order of the DRT, Jabalpur by referring to Clause 10 of the joint compromise petition, which was made a part of the compromise decree passed by Moraina Court in Civil Suit No. 26-A/89.
5. The moot point required to be considered in the present circumstances of the case as mentioned above is as to whether there was any jurisdiction of the Moraina Court to record compromise in respect of a suit at Gwalior, which is definitely outside the territorial jurisdiction of the Moraina Court or not.
6. First of all let me consider the terms itself as incorporated in the joint petition filed for compromise. The term has been enumerated in the joint petition as Clause X, which runs as follows:
That it has been further agreed that on payment of a decretal amount on the terms and conditions agreed upon as referred hereinabove, the claim of the Bank in other suit which is pending for recovery of Rs. 21,23,5607- in the Court of District Judge, Gwalior shall stand satisfied as well, and a separate application for settlement is also being filed in those proceedings, which are pending before the District Judge at Gwalior at Suit No. 6-B/88.
7. Although joint compromise petition was asked by the order of the Moraina Court to be made a part of the decree, but in the order by which compromise have been accepted, Moraina Court did never include the Clause 10 of the joint petition in the order itself and practically there was no scope also as Moraina Court has got no jurisdiction to make compromise of a suit between the same party pending before a Court of law outside the jurisdiction of Moraina Court and if the clause is being read in between the lines, it does not say that compromise has been effected of the claims at Gwalior Court, rather it was a condition imposed regarding compromise being made in the Gwalior Court, if the settlement amounts of the Moraina Court are being paid as per terms and conditions as laid down in the compromise petition itself of the order by which the compromise has been recorded with terms and conditions therein. Admittedly no petition was filed by the Bank or by the respondents before the Gwalior Court regarding the compromise being effected regarding the claims made in Gwalior Court. It is also admitted fact that the terms and conditions of the compromise had failed and uptil now payment had not been made either of the settled amount or the whole of the claim as made in the Moraina Court. In that way, there is no scope by mechanical approach considering the Clause 10 of the joint application as being a compromise clause in respect of the claims in Gwalior Court, which has now been pending and disposed of by the learned Presiding Officer, DRT, Jabalpur. On going through the impugned judgment and rival contentions of the parties and the compromise decree of Moraina Court, I am of the view that the learned DRT, Jabalpur had committed error in jumping at a conclusion that compromise has been effected in respect of the present claims, which were pending earlier before the Gwalior Court.
8. The point of jurisdiction involved has not been considered by the learned Tribunal. It is admitted point of law that any terms of compromise, if outside the jurisdiction of the Court, is incorporated, then such terms how far is a material to be considered outside the jurisdiction of that Court. Any term incorporated outside the jurisdiction of the subject matter of the suit in a compromise, then such compromise generally requires to be registered, but that aspect has not been considered. Again terms as incorporated in the joint petition as Clause 10 could be read in its proper perspective and not mechanically as has been done in the present case. How the parties stand in the circumstances of the case is required to be considered in their proper perspective and not by mechanical reading of Clause 10 of the joint petition, which was never being incorporated as terms in the order of the Moraina Court, whereby the compromise was accepted. Jumping on the conclusion as made by the learned DRT, Jabalpur is not only irregular alone, rather illegal on the face of it without considering legal and factual aspect in their proper perspective as already discussed above. Considering such position, an opportunity was given to the respondents to come for a compromise but as a dismissal order is there in their favour, they did not approach the Bank for any compromise. Hence, the appeal was heard on merits and is being disposed of accordingly. In the light of observation made above, the impugned judgment and order is found to be not sustainable in the eye of law and in the attending circumstances of the case.
9. In the result, the appeal is allowed. The impugned judgment and order is hereby set aside and learned Tribunal, Jabalpur is hereby asked to proceed according to law in the light of observation made above. In the circumstances, no order as to cost. Send down the records as called for earlier to DRT, Jabalpur immediately and parties are hereby asked to appear before the DRT, Jabalpur on 15th December, 2005.