1. This appeal has been preferred against the final judgment and order passed in T.A. No. 941 by the then Presiding Officer, DRT, Jabalpur allowing the appellant-Bank's claim on reduced rate on the basis of the compromise arrived at between the parties earlier and that some amount on the basis of the compromise was already obtained/admitted from the side of the Bank.
2. A very short point is involved in present appeal as to whether the learned Tribunal committed error in accepting the compromise amount for the purpose of grant of recovery certificate was legal, proper and justified, Admittedly the appellant Bank granted loan to the respondents for the purpose of Hotel business, But when the loan account became sticky then a suit was filed in the Civil Court for recovery of Rs. 1,00 crore and odd against the respondents. When the Tribunal was set up, then suit was transferred to the DRT, Jabalpur and was registered as T.A, No. 941/98. While proceeding was going on before the Tribunal, then outside the Tribunal a settlement was arrived at between the Bank and the Tribunal on 15.3.1999 to the effect that the appellant shall be agreeable to accept Rs. 45 lacs as a settled amount towards their claims, if the same is being paid by 31.3.1999. On the basis of such compromise an amount of Rs. 5 lacs and odd have been deposited from the side of the Bank by sale of some of the rooms of the Bank after taking no objection from the Bank regarding such sale and the sale proceeds were directly deposited with the Bank. As the buyers were not available the respondents could not sell the Hotel and so delay was caused. Then some buyers were found and some agreements were arrived at with those buyers to sell some rooms and the respondents approached the Bank for granting permission to sell out those rooms to pay up the remaining amount of settled amount of Rs. 45 lacs. The Bank did not grant permission and as such a petition was filed by the respondents before the Tribunal for directing the Bank to issue no objection certificate for full and final settlement of the claims of the Bank. The Tribunal found that while the claims proceeding was pending, the Bank had given no objection without taking permission from the Tribunal and as such the Tribunal wanted to know as to under what circumstances, Bank could give such no objection certificate, but the Bank could not comply with the direction of the Tribunal, but they objected to the petition filed by the respondents regarding no objection certificate etc. stating that the Bank had already repudiated the settlement arrived at earlier as the respondents had failed to deposit the settled amount within the stipulated period. Their further contention was that when the compromise failed, then the Bank is entitled to get a whole decree in respect of their claims made in the original application. Learned Tribunal after considering the contention of both the parties held that compromise arrived at had never been brought in the notice of the Tribunal earlier and that the Bank had settled the case outside the Tribunal and that settlement is in the form of novation of contract and hence the Bank cannot go beyond such novation and hence recovery certificate has been ordered to be passed on the balance amount of the agreed amount of Rs. 45 lacs. The present appeal has been preferred by the Bank against the impugned judgment and order on the ground that when compromise has been taken into consideration by the Tribunal, then the whole terms and conditions of the compromise ought to have been adhered to and when default clause was there, there was no scope of the Tribunal to go beyond that and hence the whole order is illegal and improper.
3. Although notices were served in the appeal, the respondents did not appear and hence the appeal was heard ex pane.
4. The admitted fact remains that during the pendency of the proceeding before the Tribunal an agreement was arrived at between the appellant Bank and the respondents-borrowers and the said agreement was also implemented in part admittedly. The contention of the Bank is that although the compromise was arrived at, the same was never being acknowledged in the Tribunal and whole thing remains outside the Tribunal and when the terms of the compromise was not adhered to within the time frame, the compromise stood cancelled and disallowed which was also acknowledged to the respondents, although on a later period and in that way, the appellant Bank is entitled to get recovery certificate for the whole amount, they had claimed and not on the lessened amount as decreed on the basis of the so called compromise.
5. It appears from the order sheet of the Tribunal that on 9,5.2000 the respondents had brought to the notice of the Tribunal that compromise has been arrived at between the parties and in terms of the compromise, Rs. 4 lacs had already been deposited with the applicant Bank. Learned Counsel for the appellant Bank took time to verify the fact and this matter of compromise was being reiterated time to time in the subsequent order sheets. On 8.10.2001 it was recorded that Bank had informed that settlement had arrived at for Rs. 45 lacs and the Bank's Counsel wanted to verify whether the whole amount have been deposited or not. Then the defendants-respondents filed petition regarding sale of the Hotel rooms and for payment of balance amount of the compromise and then order was passed by the Tribunal as to how on earlier occasion the Bank could allow no objection certificate to the respondents without taking permission from the Tribunal. The Bank did not reply to it. So the position remains that although the compromise was arrived at in the month of March, 1999 and the date was fixed for payment of whole amount on 31.3.1999, but the whole amount could not be paid by the date fixed, but the Bank was harping for payment of the settled amount and for facilitating the respondents to make the payment of the settled amount, they went beyond their jurisdiction and scope to grant no objection certificate to the respondents to sell one of the rooms of Hotels and as such "no objection" was granted on 9.1,2001 i.e. long beyond the termination period of the accepted period of compromise, so the Bank had never indulged in repudiating the compromise after expiry of 31.3.1999, rather they did so only when the matter came-up to the notice of the Tribunal in the last part of 2001. Then also again the Bank has given proposal for further compromise under the RBI Guidelines, but the same had also been withdrawn afterwards. From these facts and circumstances, it appears that the appellant Bank had never went away from the terms of the compromise even after expiry date 31.3.1999, rather after the period they have accepted part amount towards the agreed sum of Rs. 45 lacs and in that way cannot now go back to the defaulting clause of the compromise, rather from the demeanour it is clear that the Bank was going to deal with the borrower at their whims and when they could be caught on the wrong steps regarding grant of "no objection" with permission of the Tribunal, they tried to evade from the compromise and thus I do not find that the appellant-Bank is coming with clean hands, rather from the facts and circumstances, it appears that the learned Tribunal has rightly given stress on the principle of natural justice considering bonafide of the borrowers to fulfil their commitment of payment of agreed sum of Rs. 45 lacs. It does not appear that the sum agreed between the parties and decree afterwards is too low, rather only interest portion has been given go-bye and thus I do not find that it is a fit case wherein this Appellate Tribunal should interfere, The reported case of Shri Raghvendra Theatre v. Bank of India, III (2003) BC 47 (DRAT Chennai), is not applicable in the facts and circumstances of the present case.
In that case after the recovery certificate was issued and the recovery proceeding was going on, then there was settlement regarding payment of lesser amount on some terms and conditions and when the terms failed, then definitely the recovery certificate as granted would be in vogue.
7. In the result, the appeal is dismissed but no order as to cost. Send down the records to the Tribunal, where from it has been called for.