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2025 DIGILAW 453 (SC)

Sreeprakash A. P. v. State Bank Of India

2025-01-31

J.B.PARDIWALA, R.MAHADEVAN

body2025
ORDER 1. Exemtion Application is allowed. 2. This petition arises from the order passed by the High Court of Kerala at Ernakulam dated 4-11-2024 in Writ Appeal No. 1984/2023 by which the Writ Appeal filed by the petitioner - herein came to be allowed thereby setting aside the Judgment and Order passed by the learned Single Judge allowing the Writ Petition filed by the petitioners - herein. 3. We need not delve much into the facts of this litigation as the impugned order passed by the High Court has given more than a fair idea about the dispute between the parties. 4. We first take notice of the interim order passed by the learned Single Judge of the High Court dated 18-11-2021 in Writ Petition Civil No. 26211/2019 which reads thus:- These three eases stem from the loan liability staring upon the petitioner. There are disputes pending before the Debts Recovery Tribunal under the Recovery of Debts and Bankruptcy Act as well as under the Securitisation Act. 2. While so, a settlement scheme was arrived at between the parties on 29.6.2020, as per the terms of which, petitioner was bound to pay a total amount of Rs. 4,30,00,000/-. Under the terms, though petitioner paid Rs. 2,17,50,000/-. Thereafter default in payment occurred. However respondents showed indulgence and extended the date of repayment initially by a period of three months up to 29.1.2021 and again to 28.2.2021, with a rider that interest for the belated payment at MCL rate from the date of extension, till the date of payment ought to be paid by the petitioner. 3. Admittedly the terms of extension mentioned above entered into as a compromise petition filed before the Debts Recovery Tribunal in OA No. 534/2019, was not complied with and the disputes continues. 4. Sri.Tom K.Thomas, the learned Counsel for the respondents submitted that petitioner's offer for settlement, made pursuant to his default to comply with the earlier settlement, was in fact considered by the respondent bank. Consequently a counter proposal for settlement was offered by the Bank, which was not acceptable to the petitioner. It is in these circumstances that the respondents are compelled to demand the entire amount due from the petitioner. 5. Consequently a counter proposal for settlement was offered by the Bank, which was not acceptable to the petitioner. It is in these circumstances that the respondents are compelled to demand the entire amount due from the petitioner. 5. On the other hand, the petitioner contends that the petitioner is willing to pay MCL rate of interest for the defaulted period under the terms of compromise, till the date of payment and that he is willing to make substantial payment immediately, to prove his bonafides and to enable him to settle the entire liability. 6. According to the learned Counsel for the petitioner Sri. Dinesh.R.Shenoy, the recent settlement offer made by the Bank was much beyond the reach of the petitioner, and that, unless the bank lowers the offer of settlement, the petitioner would not be able to comply with the same. The petitioner also has a grievance that the partial release of the property though offered initially was not granted to him, in spite of him complying with the terms for such release. The learned counsel beseeched that petitioner genuinely intends to clear the liability, which is reflected in the payment of more than 2.17 Crores, but due to the present peculiar and unprecedented situation brought about by COVID-19 pandemic, a lenient view ought to be taken. 7. Taking into reckoning the contentions raised by the learned Counsel on either side, and on a perusal of the pleadings and documents produced, this Court is of the opinion that, circumstances are existing in favour of both sides. On the one hand, the second wave of COVID-19 pandemic that gripped the nation and the direction of the Supreme Court to extend all periods of limitation till 2.10.2021, leans in favour of showing indulgence to one party. The need for enforcing payment and recovery of liability that arises under loan accounts and in particular the terms of the compromise originally entered into and the subsequent offer, leans in favour of the other side. Between these two apparently conflicting claims, a balance has to be met. 8. Reckoning the circumstances, this Court is of the view that if the terms of settlement are revised and considered again by the respondent bank, especially, in the light of the facts mentioned above, perhaps a consensus could be arrived at. Between these two apparently conflicting claims, a balance has to be met. 8. Reckoning the circumstances, this Court is of the view that if the terms of settlement are revised and considered again by the respondent bank, especially, in the light of the facts mentioned above, perhaps a consensus could be arrived at. It is observed that the facts of each case can have a bearing on the decision to be taken by the banks and in certain cases, where there is a failure to abide by the terms of the settlement, payments can even be accepted by imposing interests on the defaulted amounts. Of course, the decision has to flow from the lender in that respect. 9. Having regard to the aforesaid, I am of the opinion that the petitioner should be given the liberty to submit a reasonable and feasible proposal to the respondent Bank within ten days from today. If such a proposal is submitted by the petitioner, the respondent bank shall bestow their anxious consideration and dispose of the same within a period of fifteen days thereafter, taking into reckoning the observations made above. If the respondent Bank has a counter proposal, the same shall also be intimated to the petitioner. 10. To enable consideration of the proposal for settlement, the petitioner must be put to the test of proving his bonafides. Accordingly, there will be a direction to the petitioner to pay an amount of Rs.l Crore along with the proposal of settlement. If the settlement is accepted, the said amount shall be treated as part of the terms of settlement. 11. The above order is rendered on the wishful thinking that, if both parties could let go of their rigid stance, there could be light at the end of the tunnel." 5. We also take notice of the second order passed by the learned Single Judge of the High Court dated 30-11-2022 in the very same Writ Petition, referred to above. The order reads thus:- "After hearing the learned counsel appearing for the petitioners and the learned counsel appearing for the respondent bank and taking into consideration the facts and circumstances of the case, I am of the opinion that an attempt can be made to settle the dispute between the petitioners and the respondent bank through mediation. The order reads thus:- "After hearing the learned counsel appearing for the petitioners and the learned counsel appearing for the respondent bank and taking into consideration the facts and circumstances of the case, I am of the opinion that an attempt can be made to settle the dispute between the petitioners and the respondent bank through mediation. Accordingly the 1st petitioner and a competent officer of the respondent bank shall appear before the mediation centre attached to the Kerala High Court at 11 a.m on 07-12-2022. They shall endeavour to complete the mediation latest by 17-12-2022. Post on 19-12-2022. Status-quo shall be maintained till 19-12-2022." 6. We also take notice of the third order which was passed by the learned Single Judge dated 24-3-2023 which reads thus;- "1. The prayer in the petition is for a direction to the respondents to release Item No.5 among the mortgaged properties for private sale on condition that the entire amount that is received towards sale consideration is remitted in the Bank towards the loan account. The parties had earlier arrived at a settlement in the matter which has not so far materialised. The Counsel for the respondents submits that the Bank has no objection to release the property, if the petitioner also pays off the balance amounts within a stipulated time. The petitioner submits that there is a likelihood of increase of the stamp duty after 31.03.2023 and if the sale does not materialise before 31.03.2023, the buyer may walk out. 2. In the above circumstances, the question of further direction would be decided at the next posting on 10.04.2023. There will be a direction to the Bank to release Item No.5 in Ext.P6 01.20 Are in Re Survey No.220/5-3(old Sy.No.41/4) Block 29 of Thiruvallam Village on condition that the entire sale consideration of Rs. 90,00,000/- is deposited in the Bank. 3. The Bank shall depute an Officer along with the original document to the office of the Registrar, at the cost of the petitioner, for the purpose of effecting the sale." 7. It is not in dispute that in pursuance of the interim orders passed by the learned Single Judge referred to above, the petitioners - herein deposited an amount of Rs. 1.9 Crore. In the past, the petitioners had already deposited Rs. 2.60 Crore in discharge of his debt towards the Bank. 8. It is not in dispute that in pursuance of the interim orders passed by the learned Single Judge referred to above, the petitioners - herein deposited an amount of Rs. 1.9 Crore. In the past, the petitioners had already deposited Rs. 2.60 Crore in discharge of his debt towards the Bank. 8. Therefore, the date on which the learned Single Judge disposed of the Writ Petition, a total amount of Rs. 1.00 Crore was due and payable which later came to be deposited by the petitioners with the Bank. According to the learned counsel appearing for the petitioners, his clients have in all deposited Rs. 5.35 Crore. 9. The learned Senior counsel would argue that in such circumstances, there was no good reason for the Bank to prefer Intra-Court appeal seeking to challenge the order passed by the learned Single Judge. 10. We have closely looked into the impugned order passed by the High Court disposing of the Intra-Court appeal filed by the petitioners more particularly Para 12 therein: In Para 12, the High Court has observed thus:- "We note that all documents pertaining to properties offered as security have been already released to the Respondents. In this appeal this Court considered the plea of the Appellant Bank for a direction to the Respondents not to deal with the properties in question and by interim order dated 6 June 2024 directed the parties to maintain status quo with regard to the properties. Taking note of the pendency of the proceedings before the DRT and all other facts and circumstances noted above, we dispose this appeal permitting the parties to agitate all issues raised in the writ petition as well as in this appeal in the proceedings before the DRT. The parties shall be at liberty to amend their pleadings appropriately for raising additional contentions. The DRT shall dispose the OA within a period of three months from the date of production of the copy of this judgment by any of the parties. The direction issued by this Court on 6 June 2024 to maintain status quo with regard to the properties shall remain in force for a period of three months from the date of issuance of copy of this judgment. The writ appeal is disposed of as above." 11. Two things emerge on reading of Para 12. The direction issued by this Court on 6 June 2024 to maintain status quo with regard to the properties shall remain in force for a period of three months from the date of issuance of copy of this judgment. The writ appeal is disposed of as above." 11. Two things emerge on reading of Para 12. First, that all the documents pertaining to the properties offered as security by the petitioners have been released by the Bank and consequently the Division Bench of the High Court has now left it for the Debts Recovery Tribunal to dispose of the O.A. accordingly. 12. In such circumstances, referred to above, more particularly when the documents, i.e., the title deeds are released, it suggests that the Bank has nothing further to say in the matter. 13. All that the High Court seems to had in its mind and which is prima facie apparent from para 12 above is that since the O.A. is pending before the DRT, let the DRT dispose of the proceedings. 14. In view of the above, there is no good reason for us to issue notice to the Bank and look into the matter. 15. Let the DRT now dispose of the proceedings in terms of the order passed by the High Court. 16. The Special Leave Petition is disposed of in the afore-stated terms. 17. Pending applications, if any, shall also stand disposed of.