In the first application, they prayed that O.A. No.
1098 of 1998 and decide the same along with S.A. No.
Although, the respondents did number pay full amount in terms of companypromise dated 23.6.2004 and as a result of that, the appellant acquired the right to recover all the dues, it signed another companypromise with the respondents who undertook to pay the balance amount of Rs.63.50 lakhs on or before 31.3.2005 along with interest at the rate of 11.50 per annum.
After some time, the account of M s. N.S. Investments was declared as number performing asset.
7562 of 2008 for issue of a mandamus to the Tribunal to take up O.A. No.
In the second and third applications, they prayed for summoning of NPA registers of the period between 1993 and 1997 and Boards numberings recorded on the file of the appellant.
During the pendency of O.A. No.
They also claimed that the Tribunal has the discretion to decide the rate of interest payable after filing of an application under Section 19 of the DRT Act and requested that the proceedings initiated under the Act may be dropped.
1098 of 1998 may be heard and disposed of along with S.A. No.
221 of 2007.
221 of 2007.
That petition was referred by the High Court to the Tamil Nadu Mediation and Conciliation Centre, which submitted report dated 4.9.1998 incorporating therein the offer made by respondent No.2 herein that he is ready to pay interest for the delayed payment of Rs.63.50 lakhs.
It, however, appears that the appellant did number accept the offer because as a result of the respondents failure to pay the agreed amount, the entire amount became payable in terms of paragraph 4 of the Memo of Compromise dated 23.6.2004.
They also applied for restraining the appellant from taking action in furtherance of the numberices issued under Section 13 2 and 13 4 of the Act.
Respondent No.2 also filed Writ Petition No.
Therefore, with the sole object of delaying final adjudication of the application filed by them, the respondents filed three interlocutory applications.
In 1995, respondent No.1 M s. Blue Jaggers Estate Ltd. took over the assets and liabilities of M s. N.S. Investments.
Since the respondents failed to clear the outstanding dues, the appellant filed an application under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for short, the DRT Act for recovery of Rs.2,15,38,158/ with interest.
The parties also agreed that in case of number compliance of any of the companyditions, O.A. No.
221/2007.
1098 of 1998 shall stand decreed as prayed for and the Applicant bank shall be entitled to recover the full amount of Rs.2,15,38,158.00 as prayed in the Original Application with future interest at companytract rate from the Application date till payment in full with companyts and also proceed to bring the schedule mentioned properties in the Original Application for sale through public auction at the companyt of the defendants.
By an order dated 21.7.2008, the Debts Recovery Appellate Tribunal at Chennai for short, the Appellate Tribunal granted interim stay subject to the companydition of deposit of Rs.3 crores in two equal instalments of Rs.1.5 crores each.
Faced with the imminent threat of sale of the properties mortgaged by them, the respondents filed an application under Section 17 of the Act S.A. No.
Notwithstanding this, the respondents defaulted in payment of the balance amount, which they finally paid on 28.3.2007.
By the second numberice, they were asked to pay Rs.9,86,25,736/ which, according to the appellant, became due as on 31.12.2006 together with interest at the rate of 19.89 per annum with quarterly rests.
S. Singhvi, J. Leave granted.
The appellant Bank sanctioned loan to M s. N.S. Investments, a partnership firm in 1989 and again in 1991.
These appeals filed for setting aside order dated 23.10.2009 passed by the Division Bench of Madras High Court are illustrative of how a defaulting borrower can use the companyrt process for frustrating the action initiated by a bank under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for short the Act for recovery of its dues.
1098 of 1998, the parties signed Joint Memo of Compromise dated 23.6.2004 whereby the appellant agreed to accept an amount of Rs.153.50 lakhs towards full and final settlement of its claim as against the outstanding dues of Rs.661.30 lakhs.
The schedule of repayment was fixed by the parties and the appellant agreed for proportionate release of the mortgaged and number mortgaged properties.
It held that the appellant herein had taken action under the Act because the borrower did number pay the outstanding dues.
While doing so, the respondents must have been companyscious of the fact that it will number be possible for them to avoid the inevitable for a long time.
The respondents filed objections under Section 13 3 A of the Act and claimed that during the pendency of the recovery proceedings instituted under the DRT Act, the appellant cannot invoke the provisions of the Act.
By the first numberice, the respondents and some others were called upon to pay Rs.6,47,21,885/ together with interest at the rate of 19.89 per annum with quarterly rests.
In the meanwhile, the appellant issued two numberices dated 19.2.2004 and 30.12.2006 under Section 13 2 of the Act.
This did number satisfy the respondents, who filed Writ Petition No.20772 of 2008 for an absolute and unconditional stay of the recovery proceedings.
221 of 2007 for quashing the proceedings initiated by the appellant under Section 13 thereof.
The same was registered as O.A. No.
1098 of 1998 shall stand decreed.
The appellant did number accede to the request of the respondents and issued numberice dated 26.7.2007 under Section 13 4 of the Act for taking possession of the mortgaged properties.
This is evinced from paragraph 4 of the Joint Memo of Compromise which reads as under In the event of Non compliance of any one of the aforesaid companyditions, the Original Application No.
By an order dated 9.6.2008, the Tribunal dismissed S.A. No.
The respondents claim that this was done at the asking of the appellant who agreed to provide additional financial assistance to the tune of Rs.1 crore, but numbertangible evidence has been produced in support of this assertion.
1098 of 1998 and is pending before Debts Recovery Tribunal, Chennai for short, the Tribunal .
