Dismissed

Maximus Arc Ltd. v. Balaji Resorts

DRAT29 Sept 2023REGULAR APPEAL/45/2023

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal dismissed the appellant's appeal challenging the lower tribunal's interest award. Upholding the lower court's discretion under the Recovery of Debts Due to Banks and Bankruptcy Act, 1993, the Tribunal confirmed interest at 16.80% simple, deeming the reduction reasonable compared to the contractual rate.

What did the court decide?

The appeal was dismissed and the impugned order dated 26.11.2018 confirming interest at 16.80% simple was upheld.

Maximus Arc Ltd. versus Balaji Resorts — Banking and Recovery | DRAT (2023)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Appeal No. 45 of 2023

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(Arising out of O.A. 584 of 2017 DRT- II Hyderabad)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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29.09.2023

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M/s. Maximus ARC Ltd. having registered office at D.No. 59A-18/15A, Sri Plaza, third floor, Teachers Colony, Patamata, Vijayawada – 520008 and local office at Sailesh Mishra, Advocate, 6, Old Post Office Street, Kolkata – 700001.

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-Vs-

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M/s. Balaji Resorts having office at 5-9-520, Tulsi Gardens, Yapral, Secunderabad – 500087.

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G. Bal Reddy,

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Mr. G.R.R. Santhi Swarup

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MR. G. Jaya Kumar Reddy

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Mr. G. Jaya Sheela Reddy

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Mrs. Josna Mary

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Mr. B. M. Abhishek

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Ms. Anusha Deepthi

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Respondent no. 2 to 8 residing at H. No.20, Tulsi Gardens, Yapral, Secunderabad – 500087.

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For the appellants : Mr. Sailesh Mishra, Learned Counsel.

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For the respondents:Mr. Nimesh Mishra, ld. Counsel - Resp.no.1 to 8. Mr. Anishr Biswas, ld. Counsel – Resp.no.1 to 8. Mr. Prasant Das, ld. Counsel – Resp.no. 1 to 8.

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THE APPELLATE TRIBUNAL :

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Instant appeal has arisen against the judgement and order dated 26.11.2018 passed by learned DRT-II Hyderabad in O.A. No. 584 of 2017 [Old O.A. No. 1301 of 2014] whereby O.A. was allowed.

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An original application u/s 19 of the Recovery of Debts Due to Banks and Bankruptcy Act, 1993 (hereinafter referred to as ‘the Act of 1993’) was filed by the appellant against the defendants for recovery of Rs.3,07,21,790/- with costs and further interest @ 19% per annum with monthly rests from the date of filing the O.A. till date of realization. Initially loan was sanctioned by UCO Bank which was assigned to the appellant herein by assignment deed dated 30.03.2017. On contest between the parties, a decree was passed by learned DRT against defendants no. 1 to 8 jointly and severally are liable to pay to the appellant a sum of Rs.3,07,21,790/- minus Rs.1,03,80,000/- with future interest @ 16.80% per annum simple from the date of filing of O.A. till the date of realization.

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Feeling aggrieved appellant preferred the appeal seeking relief to the effect that impugned order be modified to the extent that interest to be levied on monthly rests at the of 19% per annum and not on simple interest basis.

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I have heard learned counsel for the parties and perused the records.

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Learned counsel for the appellant submits that impugned order is bad in law. An amount of Rs.3,07,21,790/- was sanctioned with interest at the rate of 19% per annum with monthly rests. In the loan agreement it was admitted that interest would be charged on the loan amount shall be 06.80% above the base rate subject to minimum rate of interest 16.80%

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per annum with monthly rests. It is further submitted that the appellant is entitled for this rate of interest.

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Per contra, learned counsel for the respondent submits that learned DRT has rightly awarded interest as discretion of the Tribunal to grant pendente lite and future interest shall not be bound by the contractual rate of interest rather it is discretionary power of the Tribunal.

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7. In Central Bank of India Vs. Ravindra & Ors. [(2002 1

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SCC 367] the Constitution Bench of Hon’ble Apex Court has held as under :

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Para 55(8) “Award of interest pendente lite and post-decree is discretionary with the Court as it is essentially governed by Section 34 of the CPC de hors the contract between the parties. In a given case if the Court finds that in the principal sum adjudged on the date of the suit the component of interest is disproportionate with the component of the principal sum actually advanced the Court may exercise its discretion in awarding interest pendente lite and post-decree interest at a lower rate or may even decline awarding such interest. The discretion shall be exercised fairly, judiciously and for reasons and not in an arbitrary or fanciful manner.”

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8. In Punjab & Sind Bank Vs. Allied Beverage Co. Pvt. Ltd.

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& Ors. [(2010 10 SCC 640] Hon’ble Apex Court has placed reliance upon the Ravindra’s case (supra).

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Learned DRT has awarded interest at the rate of 16.80% per annum simple for pendente lite and future interest. An amount of Rs.1,03,80,000/- has been repaid by the respondent which was taken into consideration by the learned DRT at the time of passing the impugned order. It is a relevant fact which have been taken into consideration at the time of awarding interest.

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Accordingly, I do not find any illegality in the impugned order. Learned DRT has rightly exercised its discretion based upon the law laid down by the Constitutional Bench of Hon’ble Apex Court in Ravindra’s case (supra). Accordingly, appeal lacks merit and is liable to be dismissed.

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O R D E R

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