Debt Recovery Appellate Tribunal - Kolkata
United Bank Of India vs Ramdas Mahadeo Prasad And Ors. on 30 May, 2001
JUDGMENT
A.B. Mukherjee, J. (Chairman)
1. Two appeals being A-23/2000 and A-6/ 2001 were heard in analogous since they arose out of the same judgment and order dated 7th of July, 2000 passed by the Presiding Officer. D.R.T.-l, Calcutta, in T.A. No. 106/1996. In A-23/2000 the United Bank of India is the appellant while they were the petitioners in the Tribunal below. In A-6/2001 the appellants are opposite parties in the claim cases in the Tribunal below.
2. Earlier the United Bank of India filed suit before the Civil Court for realisation of certain sum of money alleged to have been put to the opposite parties but were not repaid by them. After the promulgation of Recovery of Debts Due to Banks and Financial Institutions Act the said claim was automatically transferred to the Tribunal from the Civil Court. Thereafter, the matter was heard when both the sides examined one witness each besides filing certain documents. The learned Presiding Officer after considering the evidence on the record came to the conclusion that the total due of the opposite party to the Bank was to the extent of Rs. 47.22 lakhs as on 16.5.1994 on the basis of the settlement arrived at between the parties during pendency of the claim case. He also found that Rs. 34.47 lakhs and also some more amount were received by the Bank from the opposite party. Taking into account such payments he fixed the total due to the Bank to the extent of Rs. 12.75 lakhs with interest at 6 percent on reducing balance. The learned Presiding Officer, however, did not grant interest from the date of the suit, but interest was calculated from the date of filing of the memorandum of understanding (MOU) between the parties.
3. From the impugned judgment two appeals have been preferred as stated earlier. The United Bank of India preferred an appeal alleging that the interest should have been granted from the date of institution of suit. Also it has been alleged by them that the opposite party did not comply with the terms of MOU and as such they are eligible to claim interest earlier agreed at the time of granting loan which is much more higher than the interest as agreed upon by way of MOU.
4. On the other hand the opposite party of the claim case preferred an appeal stating that they are no longer required to pay any sum to the Bank since they have already paid 34.47 and odd lakhs in terms of the MOU.
5. Both the appeals were heard together.
6. The point for decision is whether the impugned judgment can sustain.
7. It was argued by the United Bank of India being appellant in Appeal No. 23/2000 that the Presiding Officer of the Tribunal below is under a mistake since the interest has not been allowed from the date of filing of the suit, but it was allowed from the date of the MOU. It is also argued that no joint compromise petition was ever filed and as such the original terms and condition of the loan will have to be adhered to. It is argued that right to receive interest from the date of filing of the suit was not waived by the Bank and in support of his contention he has drawn my attention to certain portion of the paper book. Besides, rulings have also been placed of some decisions of higher Court. It is stated in AIR 2001 Punjab, Haryana 137 that the rate of interest in case of Bank loan should be awarded as per agreed rate from the date of the suit. The decision reported in AIR 1995 Supreme Court 2130 deals with the duty of the Court in case of a compromise petition being filed. The decision reported in CHN, 2001(1) page 1 says that the rate of interest as per the Banking Regulation Act should not be reopened by the Court. The principle has also been laid down in the decision reported in 1994(2) SCC 375. But the decision reported in Calcutta LT 1990(2) HC 55, however, says that the Court can exercise discretion by giving reasons for awarding lesser interest than mentioned in the agreement at the time of granting loan. The decision reported in 1998(2) SCC 317 also speaks of the discretionary power of the Court to grant lesser interest.
8. The learned Advocate appearing for the appellant in Appeal No. 6/2001 however relied on some provisions of Contact Act namely Sections 62 and 63 and also some correspondence made between the parties during pendency of the claim case. From the paper book it is his contention that the Bank did not obey the terms of the MOU by not releasing the Title Deeds and also by not rehabilitating other accounts of the appellant. It is also argued that the cases cited, by the Bank cannot have any application in the present appeals since during pendency of the claim case, the parties agreed to compromise the matter and the series of correspondence entered between the parties clearly shows that the original terms of the loan were not in force after the MOU. Accordingly it is argued that new contract came into correspondence between the parties which the Bank can not avoid.
9. From the series of correspondence entered into between the parties it will appear that the original terms and conditions of the loan were given a go-by the parties to the contract, It will appear from the Bank's letter, dated 20.5.1994 written to one of the opposite parties that on 18.5.1994 there was a meeting between the parties when the proposals for compromise of settlement were discussed and a consensus was arrived at, The said letters enclose the terms of the compromise. It appears from the same that the Bank settled its claim at Rs. 33.14 lakhs plus interest at 6 per cent till the date of liquidation which is 12 months from the date of first instalment. It also says that the first instalment of 12 lakhs is to be paid within 1 month preferable before 30th of May, 1994. It also says that the sum of Rs. 2.33 lakhs which is the Bank guarantee is to be honoured if invoked and will have to be paid by the borrowers but without payment of interest. It also speaks of a compromise petition this effect to be filed in the appropriate Court after receipt of 12 lakhs, besides, release of documents, etc. It further appears from the letter of opposite party dated 16.6.1994 that the first instalment being Rs. 12 lakhs was paid by them to the Bank and the Bank also received the same as appears from the stamp on the said letter. Therefore, the first payment was made in terms of the MOU within a period of one month from the date of effecting compromise. It further appears from the letter of the opposite party dated 21.6.1998 that a sum of Rs. 22.472 lakhs was also paid to the Bank by account payee cheque of even date. But the letter dated 12.6.1995 sent by the Bank places the claim of the Bank at Rs. 47.22 lakhs as on 16.5.1994 after calculating the interest from the date of the suit, till the date of MOU apart from the Bank Guarantee. The letter dated 19.6.1995 issued by the Bank on the opposite party reveals that the. Bank actually received Rs. 34.72 lakhs. The said letter however claims a further sum of 12.75 lakhs besides the amount mentioned as Bank Guarantee. There were a series of correspondence between the parties over the matter. While the Bank insisted that the rate of interest shall be calculated from the date of filing suit, it is the contention of the opposite party that the rate of interest shall be calculated from the date of the MOU.
10. In order to resolve the dispute between the parties it is necessary to interpret the terms of compromise as conveyed by the appellant Bank by letter dated 20.5.1994. Since, there was talk of compromise between the parties which actually took place on 18.5.1994 at 3.00 p.m., the consensus arrived at must be taken to be a new contract between the parties and in the event the terms of this contract is obeyed by any party the other side cannot get away from it on the principle laid down in Section 62 of the Contact Act. The Clause-II of the enclosure containing the terms of the compromise fixes the settled amount at Rs. 33.14 lakhs plus interest at 6% thereon till the date of liquidation which is fixed at 12 months from the payment of first instalment of 12 lakhs which is to be paid within a month from the date of arriving at the MOU. From the series of correspondence which I have referred earlier it is amply clear that the first instalment was paid by the opposite party in time and the liquidation of the agreed amount was also made within the terms of the MOU. So far as the Bank Guarantee is concerned, it is no body case that such guarantee has actually been invoked and as such the opposite party is under no obligation to pay the said same to the Bank. The only question remains in dispute is the calculation of interest rather the date, time from which such interest is to be calculated. That MOU does not mention the time from which such interest is to be calculated and as such in my opinion since a new contact has involved by way of talk between the parties on 18.5.1994 the claim of interest cannot go earlier to the said period. Because the Bank actually waived its the original claim of a much more higher sum by agreeing to remain contended with 33.14 lakhs as suit amount. As such, the subsequent contention of the Bank as conveyed by letter dated 12.6.1995 enhancing the suit amount as 47.22 lakhs cannot stand. It further appears that in spite of the effect fact that the opposite party actually obeyed the terms of MOU in toto, the Bank did not adhere to the terms of the said agreement and did not release the title deeds as claimed by the opposite party. It is surprising that in course of the written note it has even been alleged on behalf of the Bank that the MOU reveals that the mind of one officer of the Bank alone and there was no resolution of the Board of Directors to that effect on the said date. It is true that there was some exchanging of letters between the parties after the MOU. But that does not mean that the MOU looses its legality and significance, rather such correspondences were made around between the parties due to wrong interpretation given to the said MOU by one party and non-compliance of the terms by the Bank. Therefore, the MOU creating a new contract between the parties does not loose its force because of such correspondence. Accordingly, I came to the conclusion that the Bank is precluded from claiming any higher rate of interest or claiming the interest from the debt of the claim case in view of the terms of MOU. Accordingly the decision of the Tribunal below repayment of further sum of Rs. 12.75 lakhs cannot stand. Needless to say, the claim of the Bank for enhanced sum after calculating on the basis of enhanced rate of interest also does not stand since the opposite party complied with the terms of MOU by making payments strictly in conformity with the said agreement. Accordingly, it is ORDERED That the appeal No. A-23/2000 stands dismissed and Appeal No. A-6/2001 stands allowed on contest. The judgment and order appealed against is set aside. There shall not be any order as to costs.
This judgment shall govern both the appeals.