PUNJAB FINANCIAL CORPORATION versus M/S PAULBRO LEATHERS PVT. LTD.

Citation: [2019] 1 S.C.R. 83 · Decided: 07-01-2019 · Supreme Court of India · Bench: ABHAY MANOHAR SAPRE · Disposal: Appeal(s) allowed

Judgment (excerpt)

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PUNJAB FINANCIAL CORPORATION
v.
M/S PAULBRO LEATHERS PVT. LTD.
(Civil Appeal Nos. 118-119 of 2019)
JANUARY 07, 2019
[ABHAY MANOHAR SAPRE AND
R. SUBHASH REDDY, JJ.]
Settlement – One Time Settlement (OTS) – Respondent
defaulted in repaying the loan taken from appellant-Corporation –
In terms of OTS policy, matter was referred to Chartered Accountant
to determine the remaining outstanding balance amount payable
by the respondent to the appellant-Corporation – Dispute arose
even after the settlement as to the liability determined and worked
out by the Chartered Accountant – Demand of Rs.49 lacs raised on
the respondent – Respondent filed writ petition before the High Court,
which was allowed on the ground that since the whole issue was
settled with consent and no objection was raised by the appellant
at any point of time, the issue cannot be allowed to be re-opened –
On appeal, held: The parties only agreed to settle the dispute in
terms of OTS policy of the appellant-Corporation and, therefore,
one Chartered Accountant was appointed by the Court to go into
the question and submit his report – The dispute which arose out of
the terms of the settlement was new dispute and it had to be settled
on its own merits in accordance with law – It was necessary for the
High Court to record a categorical finding on the issue as to how
and on what basis the respondent had complied with the terms of
settlement and had thus discharged its entire liability – It was not
done – Matter remitted to High Court for consideration afresh –
Bank/Banking.
Allowing the appeals and remitting the matter to High Court,
the Court
HELD: If there was some dispute or ambiguity or
clarification needed in the report of the Chartered Accountant
with a view to decide the actual liability of the respondent and
how much amount was paid by the respondent to the appellant
[2019] 1 S.C.R. 83
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SUPREME COURT REPORTS
[2019] 1 S.C.R.
against the said settlement; and the manner in which the liability
was worked out because the Corporation was saying one thing
and the respondent was saying other, then the issue could still
be referred to any other Chartered Accountant of repute. It is for
this reason that this was a new dispute, which had arisen out of
the terms of the settlement, and it had to be settled on its own
merits in accordance with law.  The issue, which was raised by
the appellant by raising a demand, was, therefore, required to be
examined on its merits before quashing the huge demand which
was raised by the appellant against the respondent.   [Paras 16-
18][86-E-G]
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 118-119
of 2019.
From the Judgment and Order dated  14.11.2014 of the High Court
of Punjab and Haryana at Chandigarh in CM No. 12188-CWP-2014
(O&M) in CWP No.15042 of 2003 and order dated 01.08.2013 in CWP
No. 15042 of 2003 (O&M).
T. S. Deobia, Sr. Adv., Saksham Maheshwari, Jagjit Singh Chhabra,
Advs. for the Appellant.
A. R. Takkar, Ajay Bansal, Md. Rashid Saeed, Advs. for the
Respondent.
The Judgment of the Court was delivered by
ABHAY MANOHAR SAPRE, J. 1. Leave granted.
2. These appeals are directed against the final judgment and order
dated 14.11.2014 passed by the High Court of Punjab & Haryana at
Chandigarh in CM No.12188/2014 in C.W.P. No.15042/2003 and final
order dated 01.08.2013 in CWP No.15042/2003(O&M).
3.  Few facts need mention infra for the disposal of these appeals
that involve a short issue.
4. The respondent had taken some loan from the appellant-Punjab
Financial Corporation (hereinafter referred to as “the Corporation”)  for
their business. It is not in dispute that the respondent failed to re-pay the
loan in terms of the loan agreement and thus became a defaulter.
5. The matter was accordingly settled in terms of one time
settlement policy of the appellant- Corporation on 01.04.2003. It is also
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not in dispute that while settling the dispute, by the order of the High
Court dated 27.04.2006, the matter was referred to the Chartered
Accountant-Davinder S. Jaaj to determine the remaining outstanding
balance amount payable by the respondent against their loan account to
the appellant-Corporation and submit a report. It is Annexure-P-5.
6. Since the dispute arose even after settlement between the parties
as to what is the actual and precise liability determined and was eventually
worked out between the parties in the settlement and against the
determined liability, how much am

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