Oriental Bank of Commerce Vs. Sunder Lal Jain

Judgement dated 08.01.2008 in case “Oriental Bank of Commerce Vs. Sunder Lal Jain passed by Hon’ble Supreme Court of India against the Judgement passed in case titled 

“Sunder Lal Vs. O.B.C.” on 17.08.2005

 by the Hon’ble High Court of Delhi

The company M/s. Jain Fabric Pv. Ltd. suffered huge losses in the year 1998-99 due to natural calamity and non-payment of payments dues by the garment exporters. Consequently, the account of the Jain Fabric Pvt. Ltd. became NPA in March, 2000, however, the bank declared the said account NPA in 2001.

The Bank instead of helping the company filed false and frivolous suit before the D.R.T. and the Directors of the company were not in a position to fight the case and even not in a position to engage legal experts to fight their case before the D.R.T. at Delhi. 

The D.R.T. decreed the suit of the bank in 2003 leaving no hope for the company as the company was not even having the 75% of the decreed amount to file the appeal before the Appellate Tribunal which was necessary at that time.

That the company requested one of the counsel Mr. Bhupinder Mehtani to file a writ petition before the Hon’ble High Court against the illegal decree obtained by the bank from the DRT. 

The writ petition was filed in the month of January, 2004 and the Division of Hon’ble Delhi High Court was pleased to stay the operation of Decree subject to deposit of Rs.5 Lacs i.e. Approx. 25% of the decretal amount. 

The writ petition remained pending for about 1-1/2 year and the bank even could not file a proper reply to the said writ petition during this period.  

The Division Bench of Hon’ble Acting Chief Justice M.A. Khan and Hon’ble Mr. Justice Anil Kumar got settled the matter with the bank and directed the bank to treat the account of the company as NPA as on March, 2000 and it was further directed to the petitioner company to pay the loan amount in 8 quarterly installments within a period of two years. 

The appearing counsel of the bank as well as Chief Manager gave their consent to the said order passed by the Hon’ble High Court of Delhi, but to the shock and surprise of the petitioner company the bank preferred an S.L.P. before the Hon’ble Supreme Court for this petty matter. 

The bank was not interested in the amount, rather the ego of the senior officers of the bank was hurt and due to this prestige, they filed false and frivolous SLP before the Hon’ble Supreme Court. 

However, the Hon’ble Supreme Court was failed to appreciate the facts and circumstances of the petitioner company and passed a mechanical routine order in favour of the Bank/ government.

The petitioner also filed a review petition before the Hon’ble Supreme Court and later on a Curative Petition was also filed, but even no hearing was given to the petitioner as well as its counsel, which shows that this was the gross violation of the principal of natural justice. 

 Even the stance taken by the petitioner company was also appreciated in the Judgement in case Sardar Associates Vs. Punjab & Sind Bank, in which the Hon’ble Mr. Justice Sinha and Hon’ble Mr. Justice Deepak Verma appreciated the facts of the petitioner’s case and a reference was also made that the Hon’ble Supreme Court has not truly appreciated the facts of the case “O.B.C. Vs. Sunder Lal Jain”.  

The Bank again went back to D.R.T. for the filing of the execution proceedings and also started twisting muscles with the petitioner.  However, the able guidance and legal advise and timely steps taken by Mr. Amit Dhall, Advocate before the D.R.T., the Bank could not reply the applications filed by Mr. Dhall on behalf of the petitioner and the Bank used to take dates on one pretext or the other.

But the honesty and bonafide of the petitioner paid in the form of policy announced by the R.B.I. after the announcement of the Judgement in case titled “Sardar Associates Vs. Punjab & Sind Bank”.

 The petitioner Mr. Sunder Lal Jain, who is about 82 years old, was regularly harassed and humiliated by the bank by filing false and frivolous litigation right from the D.R.T. till Supreme Court, but as the Director of the company was very much bonafide and was always ready and willing to pay the legitimate amount to the bank, hence with the grace of God the R.B.I. announced a special policy for one time settlement for the accounts of the company under S.M.E. Scheme.

The petitioner immediately applied for taking the benefit of the said policy, but even Bank was not ready and willing to settle the same and has taken false and frivolous plea that the company of the petitioner does not fall under the category of S.M.E. Scheme, but by the sincere efforts by the Directors of the company, the Bank officials were not left with any other option, but to consider the application of the petitioner for one time settlement.

 The petitioner became victorious as the stance taken by the petitioner was accepted and the account of the petitioner company was settled under the said policy on the terms and conditions as agreed by the petitioner on the NPA doubtful amount only. 

This clearly proves that one must have patience, sincerity and honesty towards the settlement of all their loans and the bank cannot take advantage of their illegal acts in the long run.