Madras High Court
Bjp Starch vs The Registrar on 22 January, 2018
Bench: S.Manikumar, M.Dhandapani
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 22.01.2018 CORAM: THE HON'BLE MR.JUSTICE S.MANIKUMAR AND THE HON'BLE MR.JUSTICE M.DHANDAPANI W.P.No.1272 of 2018 and WMP No.1584 of 2018 1. BJP Starch Rep. by its Partner R.Balasubramaniam 2. R.Balasubramaniam 3. B.Jayakodi ... Petitioners vs. 1. The Registrar, Debts Recovery Appellate Tribunal, Chennai - 600 006. 2. The Zonal Manager, Indian Bank, Thalaivasal Branch, Attur Taluk, Salem District ... Respondents WRIT Petition filed under Article 226 of the Constitution of India, praying for the issuance of a writ of certiorarified mandamus, to call for the records pertaining to the impugned order in M.A.No.10 of 2014 against I.A.No.80 of 2003 in T.A.No.203/2008 on the file of DRT, Madurai passed by the 1st respondent by an order dated 05.05.2017 and quash the same as illegal incompetent and ultra virus and direct the respondent bank to accept the OTS offer of either a sum of Rs.4,71,369.78 as on the date of NPA classified by the bank as on 28.07.1989 or a sum of Rs.6,66,310/- (out of which Rs.4,00,000/- already paid) as on 31.03.1990 the date on which the account becomes doubtful or loss arrived and offered as per RBI guidelines dated 27.07.2000. For Petitioners : Mr.R.Singaravelan, Sr. Counsel for Mr.R.Jayaprakash. ORDER
(Order of the Court was delivered by S.MANIKUMAR, J) Borrower has sought for a writ of certiorarified mandamus to quash the order made in M.A.No.10 of 2014 against I.A.No.80 of 2003 in T.A.No.203/2008 dated 05.05.2017, on the file of Debts Recovery Appellate Tribunal, Chennai.
2. Facts deduced from the supporting affidavit are that BJP Starch, borrowed a sum of Rs.3,00,000/- from Indian Bank, Salem District, towards working capital in the year 1988. On 17.04.2019, Medium Term Loan-I (Building Loan) was enhanced to Rs.4,00,000/- for the optimum use of the unit, with the same existing terms and conditions. Installment for the said loan started from the year 1989 with an EMI of Rs.6,700/- + 5,700/- in the 59th and 60th installments by covering the said loan under small loan (SSI) guarantee scheme 1981.
3. Petitioners have contended that on 19.07.1990, an application was submitted for sanction of additional loan. It was done. On 28.07.1989, bank declared the account as Non Performing Asset. Suit in O.S.No.782 of 1992, was filed on the file of the Sub Court, Salem for recovery of Rs.11,26,977.60. Consequent to creation of the tribunal, suit was transferred and renumbered as T.A.No.1660 of 1997 and thereafter, renumbered as T.A.No.2056 of 2000 and again as T.A.No.203 of 2008. Reserve Bank of India, issued a circular dated 27.07.2000 for One Time Settlement scheme. Based on the above, petitioners sent a letter proposing to pay Rs.4,00,000/- as one time settlement, towards full satisfaction of the loan. According to the petitioners, in the pending transfer application, Debts Recovery Tribunal, Chennai, directed payment of Rs.1,00,000/- to the bank. Amount was paid. Petitioner offered to pay the remaining amount of Rs.3,00,000/- as full settlement of the loan. Bank refused to agree to the said offer and insisted for recovery of Rs.12,26,000/-.
4. In the abovesiad circumstances, petitioners filed I.A.No.80 of 2003 for payment of Rs.6,66,310/- as on 31.03.1990 and also prayed for a direction to the bank to permit payment of Rs.5,56,310/- in monthly instalments. Vide order dated 08.07.2003, Debts Recovery Tribunal, Coimbatore, dismissed I.A.No.80 of 2003. Being aggrieved petitioners filed M.A.No.134 of 2003 on the file of Debts Recovery Appellate Tribunal, Chennai. Vide order dated 04.12.2013, Debts Recovery Appellate Tribunal, Chennai, set aside the order dated 08.07.2003, with a direction to decide the issue regarding the offer of the writ petitioners for one time settlement under Reserve Bank of India Guidelines dated 12.04.2001, afresh.
5. Pursuant to the above, vide order in I.A.No.80 of 2003, dated 18.11.2013, Debts Recovery Tribunal, Madurai, dismissed the said IA. Being aggrieved, M.A.No.10 of 2014 has been filed before Debts Recovery Appellate Tribunal, Chennai, which confirmed the same. Instant writ petition has been filed against the order of Debts Recovery Appellate Tribunal, Chennai, for the reliefs as stated supra.
6. Supporting the prayer sought for Mr.Singaravelan, learned senior counsel submitted that Debts Recovery Appellate Tribunal, Chennai has failed to consider that the RBI Circular dated 27.07.2000, is applicable to the facts of this case and that having regard to the long litigation from 1992 onwards, the Debts Recovery Appellate Tribunal, Chennai, ought to have directed the bank to take steps for settlement of dispute, instead of directing the parties to litigate for years together. Learned senior counsel further submitted that the writ petitioner is ready to make payment of Rs.11,00,000/- in two days, and that the matter may be referred to the Mediation and Conciliation Centre, of this Court, for early settlement. On the abovesaid request, learned senior counsel insisted that the writ petition be entertained or otherwise, further litigation on the issue, would be endless, until resolved by this Court.
7. Heard Mr.R.Singaravelan, learned senior counsel for the petitioners and perused the materials available on record.
8. Loan has been availed on 12.04.1988. Further enhancement has been ordered on 17.04.1989. Equitable mortgage has been created. On default, loan has been classified as Non performing asset and bank has filed O.S.No.782 of 1992 on the file of the Sub Court, Salem for a preliminary decree in favour of the plaintiff and against the defendants (i) directing the defendants to deposit the suit amount of Rs.11,26,977.60 together with subsequent interest at 19.75% p.a. on Rs.9,90,106.00 and at 20.25% p.a on Rs.1,36,871.60, together with costs of the suit, within the time to be specified by the Court, failing which order sale of the undermentioned hypothecated 'A' Schedule properties and mortgaged 'B' schedule properties in open auction and adjust the sale proceeds towards the suit amount; (ii) reserving the rights of the plaintiff to proceed against the defendants personally for the balance amount, if any, after adjusting the sale proceeds towards the suit amount; (iii) granting such other relief or reliefs.
9. Details of mortgage as set out in the suit, are as follows:
'A' Schedule Description of Hypothecated properties Item No.1
1. Bright Bar polish plant : 3 Nos.
2. Plumber Block 2" : 20 Nos
3. Plumber Block Pass 2" : 20 Nos.
4. 2215 K 2" Bearing : 20 Nos.
5. 30312 Tapper Roller bearing : 6 Nos.
6. 325 Ball bearing : 16 Nos.
7. 3 x 2 1/2" Pump III type : 2 Nos.
8. 3 x 2 1/2" Pump II type : 3 Nos.
9. 400 Amps Main Switch : 1 No.
10. Cut-outer 400 amps : 6 Nos.
11. Excentry : 5 Nos.
12. Chocks : 6 Nos.
13. Multi set : 6 Nos
14. Roll Box : 2 Nos.
15. Roll Plumber : 4 Nos.
16. Roller crusher : 3 Nos.
17. Rails : 30 Nos.
Item No.2:
Stocks of Sago Starch and Sago rice, stored at 1st defendant's godown and in milk tub, situated at Kamakkapalayam, Attur Taluk, Salem Taluk as evidenced by stock statement submitted from time to time.
'B' Schedule Description of Mortgaged properties Salem Registration District, Talaivasal Sub Registration District, Ramakkapalayam Village, Old S.No.211/5 New S.No.211/5, B measuring Punjai 1.90.0 Punjai Ac 4.60 in this Punjai Ac 2.29' Cents situate within the following boundaries : On the North of Rs.Chandrasekaran land; on the South of common road and G.Ramasamy Gounder's house; on the West of Veeraganur Main Road, on the East of the land of Natesan and others; with well portion measuring 0.05 cents situate within the following boundaries; on the East, West, South and North of R. Chandrasekaran land; with common half share in the well 7.5 H.P. Electric Motor pumpset, service connection 81, One R.Chandrasekaran brother of 2nd defendant is entitled to right of way in the above property and also has right to take water through cement pipe from the above well. S.No.211/5A Punjai Ac.0.09.5 Punjai Ac.0.25 cents in this common half share. Total extent Punjai Ac.2.43 1/2.
10. Details of the value of the suit and the amount paid as per the statement of accounts inclusive of the interest debited upto 23.11.1992 are as hereunder Value of the suit for purposes of Court fees and jurisdiction : Rs.11,26,977.60 Amount due as per a/c sheet for MTL-I a/c inclusive of interest debited upto 23.11.92 Rs.7,32,502.00 Rs.7,32,502.00 Court fees paid thereon under sec.33 of the C.P.Act Rs. 53,938.75 Amount due as per a/c sheet inclusive of interest deposited upto 23.11.92 for MTL-II a/c Rs.2,57,604.00 Court fee paid thereon under sec.33 of the Tamil Nadu Court Fees Act is Rs.19,321.25 Amount due as per a/c sheet inclusive of interest debited upto 23.11.92 of OCC a/c Rs.1,36,871.60 Court fee paid thereon under sec.33 of the Tamil Nadu Court fees Act is Rs.10,266.50
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Total Rs.84,526.50 11,26,977.60
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11. Material on record discloses that written statement has been filed on 07.03.1994. Unit has become non existent and therefore, rehabilitation package sought for by the borrower, has not been considered.
12. Material on record further discloses that suit has been transferred to the Debts Recovery Tribunal-I, Chennai and assigned T.A.No.1660 of 1997. Petitioner has filed I.A.No.12 of 2001 in T.A.No.1660 of 1997 praying for an order to the bank to accept one time settlement for Rs.4,00,000/- towards full satisfaction of the amount. During the course of hearing, learned counsel for the bank submitted that amount as per the One time settlement comes to Rs.7,74,711.62. Debts Recovery Tribunal-I, Chennai, vide order dated 31.03.2001, has observed that if the bank agreed with the defendants proposed offer the defendant shall pay a sum of Rs.1,00,000/- within one weeks from 31.03.2001 and the balance amount in instalments, if agreed to between the parties or as directed by the Court.
13. Before the tribunal, learned counsel for the bank had submitted that case of the defendants do not fall within the purview of RBI guidelines. Having regard to the abovesaid submission, vide order dated 31.03.2001, Debts Recovery Tribunal-I, Chennai, had directed the defendants /writ petitioner to make payment of Rs.1,00,000/- within one week and also to make a written proposal to the bank.
14. Subsequently, on 02.04.2001, on behalf of M/s.BJP Starch, represented by its Managing Partner Mrs.B.Jayakodi, has requested for One time Settlement. Further, representation has been sent on 12.04.2001. Reading of the letter dated 12.04.2001 shows that after availing the loan, in the year 1988, petitioner had paid a sum of Rs.1,02,660-70, Rs.1,00,000/-, as directed by the tribunal and a further sum of Rs.36,978-00 by way of adjusting the fixed deposit. Thus, as against the suit claim of Rs.11,26,977/- petitioners have paid a sum of Rs.2,39,638-70.
15. Under letter 03.04.2001, the petitioners have expressed their willingness to pay a sum of Rs.3 Lakhs towards full satisfaction of the loan amount by way of quarterly instalments from 31.10.2001. Thereafter, petitioners have filed a memo dated 13.04.2001 in T.A.No.1660 of 1997, enclosing proof of payment of Rs.1,00,000/- dated 12.04.2001. Bank in its letter dated 08.06.2001, has not accepted the offer. Bank in its letter dated 28.08.2001 has requested Mrs.B.Jayakodi, Managing Partner to improve the offer, to amount claimed, in the suit as on 16.08.2001 i.e. 11,26,062/-.
16. Though, suit in O.S.No.782 of 1992 has been filed in the year 1992, for recovery of Rs.11,26,062/-, after taking note of the payment made, and even after 9 years, bank has requested the petitioners/defendants to improve the offer to the suit claim of Rs.11,26,062/-. Thereafter, BJP Starch, Partnership firm represented by the Managing Partner represented by Mrs.B.Jayakodi, has filed I.A.No.1447 of 2001, to grant time for the payment of Rs.2 Lakhs till the bank passes the order on the proposal, dated 12.04.2001, as per the order of the tribunal, dated 31.03.2001. After hearing the learned counsel for the parties, the Debts Recovery Tribunal-I, passed an order dated 04.12.2001, which is extracted hereunder "Shri Sivakumar counsel for the a/bank and Shri Kandavadivelu counsel for the defs. The case is fixed today for compliance of the conditional order and for C.E. However it is seen that the defs have filed application for extension of time for compliance of the conditional order. The counsel for the defs stated that the defs are approaching the a/b for settling the matter and therefore time should be granted for compliance of the conditional order till the bank authorities pass an appropriate order in respect of the settlement. The counsel for the a/b vehemently oppose this request stating that the defs are trying to drag this proceedings since 1997 on one or another pretext and they have not complied with the conditional order of this court. I consider the rival contention of both the parties. A perusal of the order sheet shows that 26.7.2001 the defs earlier represented in this court for reporting settlement that is why this court adjourned the matter for reporting settlement or for C.E. on 5.10.2001 the defs paid only Rs.10,000/-. Therefore this court deprecated the defs of such attitude and thereafter another conditional opportunity was granted to the defs to pay Rs.2 lakhs by the next date of hearing. Today the counsel for the defs is seeking further time for reporting settlement and for payment of the conditional amount. And as in this matter the suit claim involved is about Rs.11 lakhs and more, I am not inclined to grant further opportunity as this may defeat the very purpose of the DRT Act. However in order to render justice, further time for compliance of the conditional order is extended for 4 weeks and on furnishing the proof of payment the def shall be entitled for C.E. The case is fixed for compliance of the conditional order and also for C.E. on 22.1.2002."
17. Though, bank had requested the borrower to make payment of Rs.11,26,062/- M/s.BJP Starch, represented by the Managing Partner, Mrs.B.Jayakodi, was not agreeable and increased their offer, to the maximum of Rs.7 Lakhs. There was series of correspondence. Mrs.B.Jayakodi, Managing Partner of M/s.BJP Starch, has filed I.A.No.80 of 2003 in T.A.No.2056 of 2002, on the file of Debts Recovery Tribunal, Coimbatore (earlier assigned as T.A.No.1660 of 1997 on the file of Debts Recovery Tribunal-I, Chennai), praying for a direction to quash the letter dated 15.01.2002, demanding a sum of Rs.12.26 Lakhs from petitioners/defendants, and consequently, prayed for a direction to the bank to accept the offer of Rs.6,66,310/- as one time settlement in terms of RBI Guidelines. Contending inter alia that the petitioners had already paid a sum of Rs.1,10,000/-, they sought for an order, permitting them to pay the balance amount of Rs.5,56,310/- in twelve monthly instalments with interest.
18. Bank has filed a detailed counter affidavit contending inter alia that account has been classified as NPA as on 23.11.1992 and therefore, the guidelines of the Reserve Bank of India are not applicable. Having regard to the rival submissions and taking note of the payments made, vide order dated 08.07.2003 in I.A.No.80 of 2003 in T.A.No.2056 of 2002, Debts Recovery Tribunal, Coimbatore, dismissed the IA, with Rs.1,000/- as costs.
19. Being aggrieved, the petitioners have filed M.A.No.134 of 2013, on the file of Debts Recovery Appellate Tribunal, Chennai. After hearing, the learned counsel for the parties, vide order dated 04.12.2013 in M.A.No.134 of 2013, Debts Recovery Appellate Tribunal, Chennai, set aside the order made in I.A.No.80 of 2003 and remitted the matter back to the tribunal to consider the contentions of the defendants, with reference to the one time settlement under RBI guidelines.
20. Material on record discloses that T.A.No.2056 of 2002, has been transfered and reassigned T.A.No.203 of 2008 on the file of Debts Recovery Tribunal, Madurai. In the said T.A., petitioners have filed (1) I.A.No.464 of 2010 to restore I.A.No.80 of 2003 (for a direction to accept the offer of OTS as per the RBI guidelines).
(2) I.A.No.465 of 2010 to restore the I.A.No.928 of 2006 (to punish the deponent Mr.Shanmugham, Branch Manager for committing on offence of perjury).
(3) I.A.No.466 of 2010, to restore I.A.Sr.No.2335/08 (Directing the respondent bank to receive the balance NPA outstanding of a sum of Rs.5,56,310 pending disposal of IA.No.80 of 2003.
(4) I.A.No.467 of 2010, to restore the IA Sr.No.2334/08 (to implead the CMD & Chief Manager, RBI as party respondents) (5) I.A.No.468 of 2010, to restore the I.A.Sr.No.2710/08 (to direct the respondent Bank to produce claim application to the CGC payment of guarantee fee (SSI) to deposit insurance & CGC terms & conditions & the sum availed from the said corporation).
(6) I.A.No.469 of 2010, to restore the IA.No.3724/08 (praying the Hon'ble tribunal to decide all the pending IA's before deciding the main TA claim) (7) I.A.No.470 of 2010, to restore the IA.Sr.2335/058 (praying the Hon'ble tribunal to receive the DD for a sum of Rs.5,56,310/- favouring the respondent bank i.e., balance NPA outstanding pending disposal of IA.No.80 of 2003).
21. From the above, it could be deduced that I.A.No.80 of 2003 has been dismissed for default and that the petitioners have filed I.A.No.464 of 2010, for restoration. Petitioners have also prayed to punish the Branch Manager. Bank has filed a detailed counter affidavit.
22. Material on record discloses that pursuant to an order of a Hon'ble Division Bench of this Court dated 05.06.2013, in CRP (PD) No.20 of 2013, I.A.No.80 of 2003, has been taken up for hearing and vide order dated 18.11.2013, Debts Recovery Tribunal, Madurai, elaborately considered the RBI guidelines, documents, submissions and ultimately, held that the writ petitioners, are not entitled to claim one time settlement, on the basis of the RBI guidelines dated 27.07.2000 and by observing that there was no merit, dismissed the petition with cost of Rs.1,000/-.
23. Though, before Debts Recovery Appellate tribunal, Chennai in M.A.No.10 of 2014, the writ petitioners have reiterated the same submissions, that guidelines dated 27.07.2000 was applicable to the case on hand, after considering the pleadings, submissions and taking note of the decision of the Hon'ble Supreme Court in Central Bank of India Vs. Ravindra and Others, reported in AIR 2001 SC 3095, Debts Recovery Appellate Tribunal, Chennai, at paragraph Nos. 6 to 10 recorded as follows:
"6. On careful perusal of the pleadings or rival parties, written submissions and citations, it becomes clear that on 27.7.2000, RBI issued guidelines for recovery of dues relating to NPAs of Public Sector Banks. But it will not be out of place to mention that it this case, O.S.was filed by the bank in the year 1992 for recovery of a sum of Rs.11,26,977/-. In pursuance of the guidelines of 27.7.2000 initiative was taken by the Appellants but the stand of the Bank always remained that nothing acceptable less than the O.S. Amount in any case Appellants were insisting for re-calculation or re-ascertainment of O.S. Amount on the basis of its being SSI unit and according to Government Schemes some benefits are admissible.
7. In my considered opinion, these both reliefs cannot be decided in one go by this order. If there is a conflict in O.S. amount, that is as on 1992, it was about Rs.11.26 lakhs or not, then this fact will be decided at the end of the hearing in DRT in final order of T.A. Then Appellants have no right to divert the issue at interim stage.
8. If, at all, Appellants and Bank are keen and willing to conclude the matter on a lesser agreed amount, then during pendency of the T.A. also, matter can be adjudicated finally. In present case, in the year 2002, Bank had made up the mind to decide or adjudicate the matter for a sum of Rs.11.26 lakhs. But then Appellants forced the Bank to reduce and reconsider the amount to Rs.6.66 lakhs. In this case, guidelines of Ravindra's case will be applicable at the time of final adjudication of the matter and appellants have to wait and cooperate for early disposal of the T.A. if Appellants want to take benefit of the guidelines of Sardar Associates case, then for O.S. amount of about Rs.11.26 lakhs as on 1992, nothing can be accepted about half of the amount as O.S. neither Bank had shown any willingness to accept such a low amount, that is, half of the amount of the O.S. after about ten years of the filing the O.S. nor it is the theme and spirit of the guidelines of OTS of guidelines of the citation of Sardar Associates case.
9. Ld.PO has elaborately dealt with the matter and appreciated the issue in right perspective and reached to a correct conclusion. In my considered opinion also. IA was rightly dismissed by the DRT. Appeal being devoid of substance deserves to be and is hereby dismissed.
10. It is made clear that this Tribunal has made no comments on the merits of the case and direct the DRT to dispose of the main O.A. as early as possible giving a though on all aspects of the matter, including reliefs or relaxations available to the Appellants in various schemes. "
24. Though, Mr.Singaravelan, learned senior counsel contended that the appellate tribunal has erred in stating that the amount could be determined only at the time of final order in T.A.No.203 of 2008 and misdirected the parties to litigate the dispute, inspite of the bonafide intention of the writ petitioners to settle the loan amount, at one stroke, and prayed for reference to the Mediation and Conciliation Centre of this Court, we are not inclined to accept the contentions.
25. In Central Bank of India Vs. Ravindra and others, reported in AIR 2001 SC 3095, the Hon'ble Supreme Court, held as follows:
"41. A few points are clear from a bare reading of the provision. While decreeing a suit if the decree be for payment of money, the Court would adjudge the principal sum on the date of the suit. The Court may also be called upon to adjudge interest due and payable by the defendant to the plaintiff for the pre-suit period which interest would, on the findings arrived at and noted by us hereinabove, obviously be other than such interest as has already stood capitalised and having shed its character as interest, has acquired the colour of the principal and having stood amalgamated in the principal sum would be adjudged so. The principal sum adjudged would be the sum actually loaned plus the amount of interest on periodical rests which according to the contract between the parties or the established banking parties has stood capitalised. Interest pendente lite and future interest (i.e. interest post-decree not exceeding 6 per cent per annum) shall be awarded on such principal sum i.e. the principal sum adjudged on the date of the suit. It is well settled that the use of the word 'may' in Section 34 confers a discretion on the Court to award or not to award interest or to award interest at such rate as it deems fit. Such interest, so far as future interest is concerned may commence from the date of the decree and may be made to stop running either with payment or with such earlier date as the Court thinks fit. Shortly hereinafter we propose to give an indication of the circumstances in which the Court may decline award of interest or may award interest at a rate lesser than the permissible rate.
42. It was submitted by the learned amicus and other counsel for the bor- rowers, that the expression "on such principal sum" as occurring twice in the latter part of Section 34(1), which refers to interest pendente lite and post-decree, should be interpreted to mean principal sum arrived at by excluding the interest even if it has stood capitalised. This would be consistent with the legislative intent as reflected in the report of Joint Committee and sought to be fulfilled by 1956 Amendment. For two reasons this contention has to be rejected. Firstly, entertaining such a plea amounts to begging the question. As we have already held that the interest once capitalised ceases to be interest and becomes a part of principal sum or capital. That being so the interest forming amalgam with the principal, inview of having been capitalized, is principal sum and therefore the question of awarding interest on interest does not arise at all. Secondly, well-settled principles of interpretation of statutes would frown upon such a plea being entertained. A construction which leads to repugnancy or inconsistency has to be avoided. Ordinarily, a word or expres-sion used at several places in one enactment should be assigned the same meaning so as to avoid "a head-on clash" between two meanings assigned to the same word or expression occurring at two places in the same enactment. It should not be lightly assumed that "Parliament had given with one hand what it took away with the other" [See - Principles of Statutory Interpretation, Justice G.P. Singh, 7th Edition 1999, p.1 13]. That construction is to be rejected which will introduce uncertainty, friction or confusion into the working of the system (ibid, p.l 19). While embarking upon interpretation of words and expressions used in a Statute it is possible to find a situation when the same word or expression may have somewhat different meaning at different places depend-ing on the subject or context. This is however an exception which can be resorted to only in the event of repugnancy in the subject or context being spelled out. It has been the consistent view of Supreme Court that when the Legislature used same word or expression in different parts of the same section or statute, there is a presumption that the word is used in the same sense throughout, (ibib, p.263). More correct statement of the rule is, as held by House of Lords in Farrell v. Alexander, [1976] 2 All E.R. 721, 736, "where the draftsman uses the same word or phrase in similar contexts, he must be presumed to intend it in each place to bear the same meaning". The Court having accepted invitation to embark upon interpretative expedition shall iden-tify on its radar the contextual use of the word or expression and then determine its direction avoiding collision with icebergs of inconsistency and repugnancy.
43. Webster defines "such" as "having the particular quality or character specified; certain; representing the object as already particularised in terms which are not mentioned. In New Webster's Dictionary And Thesaurus, mean-ing of "such" is given as "of a kind previously or about to be mentioned or implied; of the same quality as something just mentioned (used to avoid the repetition of one word twice in a sentence); of a degree or quantity stated or implicit; the same as something just mentioned (used to avoid repetition of one word twice in a sentence); that part of something just stated or about to be stated." Thus, generally speaking, the use of the word "such" as an adjective prefixed to a noun is indicative of the draftsman's intention that he is assigning the same meaning or characteristic to the noun as has been previously indicated or that he is referring to something which has been said before. This principle has all the more vigorous application when the two places employing the same expression, at earlier place the expression having been defined or characterised and at the latter place having been qualified by use of the word "such", are situated in close proximity.
44. We are of the opinion that the meaning assigned to the expression 'the principal sum adjudged' should continue to be assigned to "principal sum" at such other places in Section 34(1) where the expression has been used qualified by the adjective "such" that is to say, as "such principal sum". Recognition of the method of capitalisation of interest so as to make it a part of the principal consistently with the contract between the parties or established banking prac-tice does not offend the sense of reason, justice and equity. As we have noticed such a system has a long established practice and a series of judicial precedents upholding the same. Secondly, the underlying principle as noticed in several decided cases is that when interest is debited to the account of the borrower on periodical rests, it is debited because of its having fallen due on that day. Nothing prevents the borrower from paying the amount of interest on the date it falls due. If the amount of interest is paid there will be no occasion for capitalising the amount of interest and converting it into principal. If the interest is not paid on the date due, from that date the creditor is deprived of such use of the money which it would have made if the debtor had paid the amount of interest on the date due. The creditor needs to be compensated for deprivation. As held in Pazhaniappa Mudaliar and Ors. v. Narayana Ayyar and Ors. (supra) the fact-situation is analogous to one as if the creditor has advanced money to the borrower equivalent to the amount of interest debited. We are, therefore, of the opinion that the expression "the principal sum ad-judged" may include the amount of interest, charged on periodical rests, and capitalised with the principal sum actually advanced, so as to become an amalgam of principal in such cases where it is permissible or obligatory for the Court to hold so. Where the principal sum (on the date of suit) has been so adjudged, the same shall be treated as "principal sum" for the purpose of "such principal sum" - the expression employed later in Section 34 of C.P.C.. The expression "principal sum" cannot be given different meanings at different places in the language of same section, i.e. Section 34 of C.P.C..
45. The 1956 amendment serves two-fold purpose. Firstly, it prevents award of interest on the amount of interest so adjudged on the date of suit. Secondly, it brings the last clause of Section 34, by narrowing down its ambit, in con-formity with the scope of the first clause in so far as the expression "the principal sum adjudged" occurring in the first part of Section 34 is concerned which has been left untouched by amendment. The meaning to be assigned to this expression in the first part remains the same as it was even before the amendment. However, in the third part of Section 34 the words used were "on the aggregate sum so adjudged". The judicial opinion prevalent then was (to wit, see Prabirendra Mohan v. Berhampore Bank Ltd. & Ors., AIR (1954) Calcutta 289, 295 that 'aggregate sum' contemplated the aggregate of (i) the principal sum adjudged, (ii) the interest from the date of the suit to the date of decree, and (iii) the pre-suit interest. Future interest was capable of being awarded also on the amount of pre-suit interest - adjudged as such, that is, away from such interest as was adjudged as principal sum having amalgamated into in by virtue of capitalisation. The amendment is intended to deprive the court of its pre-amendment power to award interest oninterest i.e. interest on interest adjudged as such. The amendment cannot be read as intending, expressly or by necessary implication, to deprive the court of its power to award future interest on the amount of the principal sum adjudged, the sense in which the expression was understood, also judicially expounded even before 1955; the expression having been left untouched by the 1956 amendment.
46. It was submitted from borrowers' side that such an interpretation of Section 34 of the Civil Procedure Code as canvassed on behalf of the banks, if accepted, may result in anomalous situations emerging. To wit, it was pointed out that if the bank deliberately and unscrupulously delays the suit being filed, for such period of delay the bank would gain an advantage by continuing to charge interest at the contract rate and by capitalising the same. If the suit was filed promptly then the contract would cease to operate and debtor would be relieved from the rigour of the contract and find solace under the operation of Section 34 of the Civil Procedure Code. True it is that once a suit is filed in the Court, so far as Section 34 of the Civil Procedure Code is concerned, the relationship of parties ceases to be governed by contract between the parties and comes to be governed by Section 34 of the Civil Procedure Code. Still the submission has to be repelled for several reasons. Firstly, the bank can afford to wait or delay the filing of the suit only during the period of limitation which delay would not be illegitimate. Secondly, noting prevents the debtor, even during the period of this delay, to pay or tender the amount of interest as and when it falls due and thereby prevent its capitalisation. Thirdly, the court is not powerless to deny the bank's claim for interest, if in the facts and circumstances of a given case the court is persuaded to hold that filing of the suit was delayed for the purpose of deliberately gaining an unfair advantage over adverse finan-cial condition of the defendant. In such cases the pre-suit interest though claimed in accordance with the contract would be denied by the Court on the ground of public policy and on the ground of the creditor having tried to gain an unfair advantage over the debtor by a deliberate inaction of himself, no one can take advantage of its own wrong.
47. It was further submitted that if the expression "the principal sum ad- judged" was to be interpreted and assigned a meaning as inclusive of the interest capitalised and therefore being the principal sum to be adjudged so at the date of the suit then there would be left nothing to be adjudged by way of interest for the pre-suit period and therefore a part of Section 34(1) "and in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit" - shall be rendered redundant. We cannot subscribe to this submission. We give just an illustration or two to demonstrate reasons for our such opinion. The same plaintiff while suing the same defendant may join in the suit more causes of action then one; one permitting capitalisation of interest, and the other, not permitting the same. There may be a case, as was Gowda's case decided by this Court, wherein interest is capitalised with quar-terly rests on a particular date, says 31st March and so on and the suit is filed before the date on which interest will be capitalised. The amount of interest charged for the period of time less than the quarter would remain an interest, not capitalised. Then there may be a case where interest may have been charged and capitalised at a rate exceeding the one permitted in which case the amount of interest charged and capitalised beyond the quantum permissible shall have to be separated. In all such cases the principal sum inclusive of capitalised interest to the extent permissible shall be adjudged as 'principal sum' and there would also be 'in addition any interest adjudged by way of interest on such principal sum' for the pre-suit period. We therefore find force in the submission of the learned Solicitor General that in that part of Section 34(1) which speaks of "interest adjudged on such principal sum" for pre-suit period, the text should be read as if by reading "interest" qualified by "if any" so as to make it meaningful."
26. Though, the petitioner has borrowed loan in the year 1988, which has culminated into a claim for Rs.11,26,062/- in the year 1992 and when the bank has filed a suit in O.S.No.782 of 1992 on the file of the Subordinate Court, Salem, even as per the version of the petitioners as on 12.04.2007, a sum of Rs.2,39,638.70p, alone has been paid.
27. Though, Mr.Singaravelan, learned senior counsel on more than one occasion submitted that the petitioners were bonafide in discharging the loan amount, but the bank has not agreed to the One Time Settlement, we are not inclined to accept the said submissions. Had there been bonafides on the part of the petitioners, they should have paid the amount in time.
28. True that the suit has been transfered to different tribunals, that does not mean that the petitioners can protract payment of debt and continue to litigate by referring to RBI guidelines, which were found to be not applicable. It is to be noted that the suit amount has not been disputed at all. On facts, the decision in Ravindra's case [cited supra], is not applicable. But the petitioners have only relied on the RBI guidelines, for one time settlement.
29. From the material on record, it could be deduced that by sending proposals for One Time Settlement, petitioners have sought for directions against the bank. Banking transactions are civil in nature. Courts under Article 226 of the Constitution of India, cannot direct the parties to enter into a contract, to suit their claim. Reference can be made to the decisions of this court.
30. On the legal right of a person, to seek for writ of mandamus, a Hon'ble Division Bench of this Court, after considering a catena of decisions, in Tamilnadu Industrial Investment Corporation Vs. Millenium Business Solutions Private Limited, reported in 2004 (5) CTC 689, at Paragraph Nos.7,8,16 and 18, held as follows:
"7.In our considered opinion it is not proper for the Court to interfere in such matters relating to recovery of loans. Such matters are contractual in nature and writ jurisdiction is not the proper remedy for this. A writ lies when there is an error of law apparent on the face of the record, or there is violation of law. No writ lies merely for directing one time settlement or for directing re-scheduling of the loan or for fixing instalments in connection with the loan. It is only the bank or the financial institution which granted the loan which can re-schedule it or fix one time settlement or grant instalments. The Court has no right under Article 226 of the Constitution to direct grant of one time settlement or for re-scheduling of the loan, or to fix instalments.
8. No doubt Article 226 on its plain language states that a writ can be used by the High Court for enforcing a fundamental right or for 'any other purpose'. However, by judicial interpretation the words 'any other purpose' have been interpreted to mean the enforcement of any legal right or performance of any legal duty, vide Calcutta Gas Co. v. State of West Bengal, AIR 1963 SC 1044. In the present case, the writ petitioner has really prayed for a Mandamus to the Corporation to grant it a one time settlement, but no violation of any law has been pointed out. In our opinion, no such mandamus can be issued in this case, and hence the writ petition should not have been entertained. A mandamus is issued only when the petitioner can show that he has a legal right to the performance of a public duty by the party against whom the mandamus is sought.
16. A loan is granted in terms of the contract, and grant of one time settlement or re-scheduling of the loan amount is really a modification of the contract, which can only be done by mutual consent of the parties, vide Section 62 of the Contract Act, 1872. The Court cannot alter the terms of the contract.
18. Before parting with the case we would like to mention that recovery of tens of thousands of crore rupees of loans of banks and financial institutions has been held up by Court orders under Article 226 proceedings which were really unwarranted. However, much sympathy a Court may have for a party, a writ Court must exercise its jurisdiction on well settled principles, and not a mere sympathy or compassion. No doubt, there be hardship to a party, but unless violation of law is shown the Court cannot interfere. Holding up recoveries of loans by unwarranted Court orders is causing incalculable harm to our economy, since unless the loan is recovered a fresh loan cannot be granted to needy persons. The Courts must keep these considerations in mind."
31. A Hon'ble Division Bench of this Court, in M/s.Digivision Electronics Ltd., Registered Office at No.A5 & 6, Industrial Estate, Guindy, Chennai - 32 Vs. Indian Bank, rep. by its Deputy General Manager, Head Office, 31, Rajaji Salai, Chennai-1 and another, reported in 2005 (3) LW 269, at paragraph Nos.42 and 46, held as follows:
"42. Some of the learned counsel submitted that the Court should direct one time settlement or fixing of installment or rescheduling the loan. In Tamilnadu Industrial Investment Corporation Vs. Millenium Business Solutions Private Limited, 2004 (5) CTC 689, it has been held that this Court cannot pass any such order in writ jurisdiction, since directing one time settlement or granting installments is really re-scheduling the loan, which can only be done by the bank or financial institution which granted the loan. This Court under Article 226 of the Constitution cannot reschedule a loan. A writ is issued when there is violation of law or error of law apparent on the face of the record, and not for rescheduling loans. The Court must exercise restraint in such matters, and not depart from well settled legal principles".
"46. Writ is a discretionary remedy, and hence this Court under Article 226 is not bound to interfere even if there is a technical violation of law, vide R.Nanjappan Vs. The District Collector, Coimbatore, 2005 WLR 47, Chandra Singh Vs. State of Rajasthan, JT 2003 (6) SC 20. The Managing Director, Tamil Nadu State Transport Corporation (Madurai Division-IV) Ltd., Dindigul Vs. P.Ellappan, 2005 (1) MLJ 639, Ramniklal N.Bhutta and Another Vs. State of Maharashtra, 1997 (1) SCC 134, etc."
32. Decisions stated supra are proximate to the principles of law, to be followed, in the matter of rephasement and settlement of dues. In the light of the above discussions and decisions, we are of the view that there are absolutely no merits in the writ petition warranting interference and hence, the Writ petition is dismissed.
33. Though Mr.Singaravelan, learned senior counsel for the petitioners offered to pay a sum of Rs.11 Lakhs in two days time and requested that the matter be referred to Mediation and Conciliation Centre, of this Court, taking note of the protracted litigation for nearly 25 years from the date of institution of suit in O.S.No.782 of 1992 on the file of the Sub Court, Salem, we are not inclined to accept the said plea. It is always open to the petitioners to make the payment to the bank, if they so desire.
34. Debts Recovery Tribunal, Madurai, is directed to take up the matter on a day to day basis and dispose of the same within two months from the date of receipt of a copy of this order. Unless and until there is bonafide, any attempt to protract, be dealt with, in accordance with law. No Costs. Consequently, the connected Writ Miscellaneous Petition is closed.
(S.M.K., J.) (M.D.I., J.) 22.01.2018 Index: Yes Internet: Yes.
Speaking / Non-speaking order.
ars To
1. The Registrar, Debts Recovery Appellate Tribunal, Chennai - 600 006.
2. The Zonal Manager, Indian Bank, Thalaivasal Branch, Attur Taluk, Salem District S.MANIKUMAR,J.
AND M.DHANDAPANI, J.
ars W.P.No.1272 of 2018 and WMP No.1584 of 2018 22.01.2018