LexSTATE BANK OF INDIA versus VIJAY KUMAR
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ST ATE BANK OF INDIA
A
v.
VIJAYKUMAR
MAR(;H 26, 2007
[DR. ARIIlTPASA YAT AND LOKESHWAR SINGH PANT A, JJ.)
B
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Constitution of India, 1950:
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Art.136-Debt recovery proceedings-Compromise deed setting time c
schedule for making payment and default clause-Default in payment within
time-Bank claiming recovery of entire decretal amount-Writ petition by
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respondent indicating difficulties for making payment_ in time-High Court
accepted the stand of respondent and directed the payment of interest for
default period@ 10.5% p.a.-On appeal, held, respondent had made full
payment alongwith the interest for the default period u Moreover, Appellant- D
bank had never indicated that settlement failed due to failure to stick to time
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schedule-Hence not fit case to exercise jurisdiction under Art.136.
The appellant-Bank filed recovery petition before the DRT._The matter
was referred to Lok Adalat where a compromise deed was filed setting out
terms of settlement. The compromise deed specified that respondent was to E
deposit the settlement amount by 31st March, 2004 and a failure clause setting
out consequences of default in payment according to the time schedule. DRT
passed an order in terms of compromise. Respondent defaulted in payment.
Appellant-Bank took the view that there was non-compliance with the terms
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of the compromise/settlement, therefore, they were entitled to recover the F
entire decretal amount .
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Respondent filed writ petition before High Court indicating the
difficulties on account of which the payments could not be made in time. The
High Court allowed the appeal and accepted the stand of the respondent that
though there was some default, the entire amount had been paid by 12th July, G
2004 alongwith interest ofRs.45,000/- for the defaulted period. It further held
that the difficulties were genuine and the compromise should be acted upon
but directed the bank to charge interest for the defaulted period @ 10.4%
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p.a. Hence the present appeal.
475
H
+
476
SUPREME COURT REPORTS
(2007] 4 S.C.R.
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A
Dismissing the appeal, the Court
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HELD: 1. 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.
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It is true that the High Court has erroneously recorded that Rs.2,00,000/-
has been paid within the stipulated time. 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
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Rs.29,353/-. [Paras 7 and 8) [477-G-H; 478-E)
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2. Appellant-Bank at no point of time before the fmal payment was made,
had indicated that settlement failed because of failure to stick to the time
schedule. Above being the position, it is not a fit case where jurisdiction under
Article 136 of the Constitution oflndia, 1950 is to be exercised.
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[Paras 9 and 10) [478-F)
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1573 of2007.
From the Judgment and Order dated 26.5.2006 of the High Court of
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Punjab and Haryana at Chandigarh in C.W.P. No. 15032/2005.
Sanjay Kapur, Shubhra Kapur, Rajiv Kapur, and Arti Singh for the
E Appellant.
Rajiv K. Garg, Ashish Garg and Annam D.N. Rao for ~he Respondent.
The Judgment of the Court was delivered by
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DR. ARIJIT PASAYAT, J. 1. Leave granted.
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2. Challenge in this appeal is to the order passed by the Division Bench
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of the Punjab and Haryana High Court allowing the writ petition filed by the
respondent.
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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 'ORT'). The amount claimed was Rs.14,92,295.99.
The decree was passed and revision petition was filed by the appellant-bank.
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A compromise deed was filed at the Lok Adalat setting out the different terms
H of settlement. The relevant term was that the respondent was to deposit 20%
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STATEBANKOFINDIAv. VIJAYKUMAR [PASAYAT,J.)
477
of the compromise/settlement amount within 30 days i.e on or before December A
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 paymExcerpt shown. Read the full judgment & AI analysis in Lexace.