The High Court set aside impugned DRAT orders that reduced interest from 14% to 11% and suspended recovery, holding no reason existed for modification given the bank's timeline. Writ petitions and stay applications disposed.
Impugned DRAT orders dated February 24, 2015 set aside; writ petitions disposed; stay applications dismissed as infructuous.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
$~7&8
| + W.P.(C) 8562/201 |
5 | |
|---|---|---|
| PUNJAB & SIND | BANK Represented by: versus |
..... Petitioner Mr.Pallav Saxena, Ms.Bindu Das, Advs. |
| VINOD KUMAR | JAIN & ORS Represented by: |
..... Respondent Mr.Praveen Kapoor, Adv. for R-1. Mr.Rajiv Bahl for Official Liquidator. |
| + W.P.(C) 8566/201 |
5 | |
| PUNJAB & SIND | BANK Represented by: |
..... Petitioner Mr.Pallav Saxena, Ms.Bindu Das, Advs. |
| versus | ||
| VINOD KUMAR | JAIN & ORS Represented by: |
..... Respondent Mr.Praveen Kapoor, Adv. for R-1. Mr.Rajiv Bahl for Official Liquidator. |
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG HON'BLE MS. JUSTICE MUKTA GUPTA
O R D E R % 01.03.2016
W.P.(C) Nos. 8562/2015 & 8566/2015 Page 1 of 4
2015 the DRAT reduced the rate of interest from 14% p.a. simple to 11% p.a. simple and the recovery has been kept in suspended animation until receipt of the balance proceeds pursuant to the orders of the Company Court. 2. A brief background of the two petitions is that the bank granted credit facility to respondent No.2. Under the said facility, documents were negotiated between the parties and payments were made against the bills duly acknowledged. The respondents executed loan and security documents. The respondents also availed overdraft facilities. Number of securities as well as personal sureties collaterally for securing the credit facilities were created. Since the respondents failed to maintain financial discipline and contravened the terms and conditions governing the credit facility, the petitioner instituted two suits, Suit No.2147/1986 for recovery of 4,50,76,141.84 and Suit No.2194/1986 for recovery of 8,16,58,516.84 along with pendentelite and future interest thereon @ 19.50% per annum with quarterly rest and cost. The suits were transferred to the DRT and registered as OA Nos.341/95 and 1250/95 respectively. The DRT vide orders dated May 08, 2012 and March 02, 2012 disposed of the two OAs i.e. 341/95 and 1250/95 respectively. It held the bank entitled to recover the amount from the defendants jointly and severally with simple interest @ 14% p.a. from October 10, 1986 onwards until realization. In the two appeals filed by Vinod Kumar Jain, respondent No.1 herein, the DRAT passed the impugned orders dated February 24, 2015 reducing the rate of interest from 14% p.a. simple to 11% p.a. simple and suspending the recovery till the decision of the Company Court. 3. On the plea of the respondents that the rate of interest be reduced the DRT held that the rate of interest has to be determined having due regard to
W.P.(C) Nos. 8562/2015 & 8566/2015 Page 2 of 4
the facts and circumstances of the case. It noted that present was a case where after availing huge amount of loan and admitting the liability in the balance sheets, there is complete denial of availing the loan facility. Thus the conduct of the party does not entitle it to grant reduction of the rate of interest at 10% per annum. It being public money usurped through the bank and the company having gone into liquidation, the DRT after considering the various decisions of this Court, held that the rate of interest at 14% simple would be appropriate. In O.A.No.341/1995 the DRT also noted that the company was declared a sick company, the capital was eroding and the suit amount itself covers at least 33% of the interest on the original principal amount.
W.P.(C) Nos. 8562/2015 & 8566/2015 Page 3 of 4
@14% p.a. for the reasons as noted above. No appeal against the said order was filed by the bank. However, on an appeal of Vinod Kumar Jain, the rate of interest was reduced to 11% p.a. without assigning reasons. Considering the facts that suits for recovery were instituted in the year 1986 and the respondents after admitting their liability failed to discharge the same and protracted the proceedings, the DRT committed no error in awarding interest at the rate of 14% p.a. simple. No case was made out before the DRAT for reduction of the rate of interest to 11% p.a.
CM 18495/2015 (stay) in W.P.(C) 8562/2015 CM 18506/2015 (stay) in W.P.(C) 8566/2015
Dismissed as infructuous.
PRADEEP NANDRAJOG, J.
MUKTA GUPTA, J.
MARCH 01, 2016 ‘ga/vn’
W.P.(C) Nos. 8562/2015 & 8566/2015 Page 4 of 4
1 issue framed by the court
Whether the DRAT erred in reducing the interest rate from 14% to 11% and suspending recovery pending Company Court proceedings.
Colour shows how this judgement treated each authority
Central Bank of India Vs. Ravindra & Ors.Referred¶13
Central Bank of India Vs. Ravindra & Ors. (2002) 1 SCC 367 · Who else cites this
Punjab & Sind Bank
Vinod Kumar Jain
Pradeep Nandrajog
Mukta Gupta
As recorded by the court registry
A petition under Article 226 of the Constitution asking a High Court to issue a writ against the State or a public authority in a civil matter.
Judgements on the same questions, provisions and authorities, from every court
