SBI Vs Vijay Kumar-High Court- Writ- judgement

CASE NO.:

Appeal (civil)  1573 of 2007

PETITIONER:

State Bank of India

RESPONDENT:

Vijay Kumar

DATE OF JUDGMENT: 26/03/2007

BENCH:

Dr. Arijit Pasayat & Lokeshwar Singh Panta

JUDGMENT:

JUDGMENT
DR. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge in this appeal is to the order passed by the Division Bench of
the Punjab and Haryana High Court allowing the writ petition filed by the
respondent.

3. The background facts which are almost undisputed are as follows:
The appellant-bank field a recovery petition before the Debt Recovery
Tribunal, Chandigarh (in short `DRT’).

The amount claimed was
Rs.14,92,295.99. The decree was passed and revision petition was filed by
the appellant-bank. A compromise deed was filed at the Lok Adalat setting
out the different terms of settlement. The relevant term was that the
respondent was to deposit 20% of the compromise/settlement amount within 30
days i.e on or before December 28, 2003 and the remaining amount of
Rs.8,00,000/- was to be paid in equal monthly/quarterly/half yearly
instalment on or before March 31, 2004. There was also a failure clause
setting out the consequences of default in payment according to the time
schedule. DRT passed an order in terms of the compromise. Undisputedly
there was some default in payment. Since the appellant-bank took the view
that there was non-compliance with the terms of the compromise/settlement,
therefore, the appellant-bank was entitled to recover the entire decreetal
amount.

4. A writ petition was filed before the High Court indicating the
difficulities on account of which the payments could not be made in time.
The High Court took note of the fact though there was some default on the
part of the respondent the entire amount had been paid by 12th July, 2004
along with interest of Rs.45,000/- for the defaulted period. The High Court
held that the difficulties were genuine. The respondent had proved his bona
fide by making the payment of whole amount as agreed to in the compromise
and that also paid for the defaulted amount.

5. The High Court was of the view that the first instalment was paid in
time. Therefore, it accepted the stand of the writ petitioners and held
that the compromise should be acted upon but directed the bank to charge
interest for the defaulted period @ 10.4% p.a.. A sum of Rs.20,000/- which
was deposited pursuant to the order of the High Court was directed to be
adjusted for publication charges etc.

6. In support of the appeal learned counsel for the appellant-bank
submitted that the High Court has wrongly held that the first instalment
was made in time. Additionally, when the amounts had not been paid
according to the fixed schedule the default clause operated and the High
Court could not have come to the aid of a defaulter.

7. Learned counsel for the respondent submitted that High Court took note
of all the relevant factors, the bona fides of the respondent and even had
directed charging of interest which in fact has been charged by the
appellant bank and has been paid. Normally, when there is failure of the
terms of the settlement the default clause, if provided, operates.

Therefore, in the peculiar features appellant-bank agreed to settle the
claim taking into account various factors. It is true that the High Court
has erroneously recorded that Rs.2,00,000/- has been paid within the
stipulated time. The details of the payment are as follows:

S. No. Date of       Amount      Mode of Payment
Payment

1. 28.12.2003   Rs.90,000 Cash deposited with the Respondent
bank

2. 2.1.04     Rs.20,000 Cash deposited with the Respondent
bank

3. 5.1.04     Rs.10,000 Cash deposited with the Respondent
bank

4. 25.4.04     Rs.3,80,000 Cash deposited with the Respondent
bank

5. 12.7.04     Rs.5,00,000 Vide bank draft deposited with the
Recovery officer.

Total     Rs.10,00,000

8. Additionally, we find that the respondent had paid Rs.45,000/- as
interest for the defaulted period. Interestingly, pursuant to the direction
of the High Court the appellant-bank had charged interest of Rs.29,353/-.
There into arrangements with third party for selling the property but the
payment in respect of the sale was to be made directly to the bank.

9. It is noted that Bank at no point of time before the final payment was
made appears to have indicated that settlement failed because of failure to
stick to the time schedule.

10. Above being the position, we do not find this to be a fit case where
jurisdiction under Article 136 of the Constitution of India, 1950 is to be
exercised. The appeal is dismissed.