Allowed

Unilife Medical Services Pvt. Ltd. and Ors. v. State Bank of India

DRAT17 Feb 2025REGULAR APPEAL/122/2016

Case brief

AI extract

What is this about?

The Tribunal allowed an appeal by debtors challenging an order awarding compound interest. Holding that an appellate order specifying interest 'per annum' without explicitly stating 'compound' does not authorize compound interest, the Tribunal set aside the lower court's award and remanded the matter for decision in accordance with simple interest on the reducing balance.

What did the court decide?

Impugned order awarding compound interest set aside; matter remanded to DRT to decide appeal with interest calculated on simple rate on reducing balance.

Unilife Medical Services Pvt. Ltd. and Ors… — Contract and Commercial Disputes | DRAT (2025)

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Reportable / Non-reportable

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL - KOLKATA

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Hon'ble Justice Anil Kumar Srivastava, Chairperson

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APPEAL 122 OF 2016

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(Arising out of M.A. 105 of 2015 in appeal 06 of 2015 – DRT- Guwahati)

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17.02.2025

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UNILIFE MEDICAL SERVICES PVT LTD office at House No. 55, Senapati Bhawan, Silpukuri, Guwahati-781003, Assam

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2.Dr Miklu Senapati residing at House No. 55, Senapati Bhawan, Silpukuri, Guwahati-781003, Assam

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3.Dr Rani Manjula Das residing at House No. 55, Senapati Bhawan, Silpukuri, Guwahati-781003, Assam

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... Appellant

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--Vs--

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STATE BANK OF INDIA, Guwahati Branch, Bamunimaidan, Guwahati – 781021.

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... Respondents

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For Appellant : Mr. Prasenjit Pal, ld. Adv.

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For Respondent: Mr. Debasish Chakraborty , ld. Adv. for bank

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The Appellate Tribunal

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Heard learned counsel for the parties and perused the records.

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Instant appeal has arisen against the order dated

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29.09.2014 passed by learned DRT Guwahati in M.A. 105 of 2015

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in Appeal No. 06 of 2015 [Unilife Medical Services Pvt. Ltd. & Ors

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Vs. State Bank of India] whereby learned DRT has dismissed the

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M.A. as well as Appeal. Appeal was preferred by the appellants

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against the order of the Recovery Officer, DRT Guwahati passed

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on 13.07.2015 whereby pendente lite and future interest was

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directed to be calculated on compound basis. Originally O.A. No. 53 of 2008 was filed by the bank and O.A. 6 of 2009 [counter

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claim]filed by the appellants herein. O.A. was allowed by the

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learned DRT while counter claim was dismissed. Learned DRT

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has passed following order in the O.A.:

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“Issue recovery certificate in favour of the applicant for a sum of Rs.1,28,01,645.00 against the defendants no. 1,2,3 and 6 jointly and severally with pendente lite and future interest @ 12.75% p.a. Till realization and also cost of the application. The amount of Rs.1,72,00,000/- received by the applicant bank from the sale of leasehold rights of the immovable property shall be reduced from the certificate amount. The pendente lite and future interest should be calculated accordingly on reducing balance. The applicant bank is to file revised statement of account before the learned Recovery Officer accordingly.

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The applicant bank shall also adjust the amount of Rs.15.00 lakhs allowed to the defendants towards compensation against the lability of defendants.

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Defendant no. 4 and 5 are not liable for the certificate amount.”

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Consequent thereto, recovery certificate was issued.

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Recovery Officer, DRT – Guwahati has issued demand notice for a

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sum of Rs.41,17,244/- with interest @ 12.75% per annum on

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13.01.2015 on reducing balance. An application was filed by the

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appellant (certificate debtor) before the Recovery Officer giving

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their own calculation wherein interest @ 12.75% from

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21.07.2008 to 08.02.2012 was calculated on simple rate of interest. Thereafter another memo was submitted by the bank. Recovery officer vide order dated 13.07.2015 held that in the recovery certificate interest was allowed, but does not say 12.75% simple interest per annum. Simply it was recorded 12.75% per annum. On the basis of common practice Recovery Officer held that a calculation cannot be considered at simple rate of interest.

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This order was challenged by the appellant in an appeal before the Presiding Officer, DRT Guwahati by filing Misc. application no. 105 of 2016 in appeal no.6 of 2016. Learned DRT dismissed the M.A. as well as the appeal holding that the Tribunal has awarded compound rate of interest not simple interest. Accordingly, calculation made in the Misc. Application itself is not in confirmatory with the judgement and order passed by the Tribunal in O.A.

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Feeling aggrieved by this order appellant preferred the appeal.

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At the very outset it is submitted by the learned counsel for

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the appellant that judgement and order passed in O.A. proceeding granted pendente lite and future interest @ 12.75% per annum till realisation of the certificate amount. No where it was mentioned that interest would be calculated at compounding rate. Hence, it should be treated as simple rate of interest on reducing balance till the date of realisation. Reliance is placed upon the decision of Hon’ble Apex Court in State of Haryana & Ors. Vs. S.L.Arora& Co. [(2010) 3 SCC 690] as well as Hyder Consulting (UK) Ltd. Vs. Governor, State of Orissa [(2015) 2 SCC 189].

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Per contra, learned counsel for the respondent bank would submit that interest was rightly calculated by the bank on compound rate of interest. There was an agreed rate of interest between the parties. Hence, compound rate of interest was applicable in the matter. Reliance is placed upon the judgement of Hon’ble Apex Court in United Bank of India Vs. B.T.W.

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Industries [2000 SCC OnLine Cal 333].

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As far as rate of interest is concerned, in the judgement and

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order passed in the O.A. pendente lite and future interest @

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12.75% per annum was granted by the learned DRT. It is well within the jurisdiction of the DRT to grant interest pendente lite

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and future as has been held by the Hon’ble Apex Court in State of

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Haryana (supra). Learned DRT granted rate of interest without mentioning about simple or compounding rate of interest. It means that learned DRT modified its own order passed in O.A. by

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passing the impugned order. It was not recorded in the judgement of O.A. that pendente lite and future interest shall be calculated in compounding basis. No petition for modification of the order was filed before the learned DRT. How learned DRT came to a conclusion that rate of interest was compound but not

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simple?This finding is against the record and erroneous.

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Accordingly, I am of the considered view that learned DRT

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erred in passing the impugned order. Appeal deserves to be allowed.

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O R D E R

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Appeal is allowed. Impugned order dated 19.02.2016

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passed in M.A. 105 in Appeal No.6 of 2025 is set aside. Learned

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DRT is directed to decide the appeal in accordance with law with

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the observation made in the body of the judgement. Costs easy.

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File be consigned to record room.

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Copy of the order be supplied to the appellant and the respondents and a copy be also forwarded to the concerned DRT. Copy of the judgement/Final Order be uploaded in the Tribunal’s website.

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Order dictated, signed and pronounced by me in the open Court on this the 17^th day of February, 2025.

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(Anil Kumar Srivastava, J) Chairperson

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Dated :17.02.2025 /pkb

Unilife Medical Services Pvt. Ltd. and Ors. v. State Bank of India

Case brief

What is this about?

What did the court decide?

Unilife Medical Services Pvt. Ltd. and Ors. v. State Bank of India

Case brief

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What the court decided

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