Delhi High Court
Inderjeet Singh & Anr. vs Fedral Bank Ltd. & Anr on 21 January, 2009
Author: S.Ravindra Bhat
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision : 21.01.2009
+ W.P.(C) 1884/2007
INDERJEET SINGH & ANR. ..... Petitioner
Through : Mr. D.K. Rustagi, Advocate
versus
FEDRAL BANK LTD. & ANR. ..... Respondent
Through : Mr. P.I. Jose, Advocate
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
1. Whether the Reporters of local papers
may be allowed to see the judgment?
2. To be referred to Reporter or not?
3. Whether the judgment should be
reported in the Digest?
S.RAVINDRA BHAT, J. (ORAL)
*
Issue rule. Mr. P.I. Jose, learned counsel for the respondent waives
notice of rule. The writ petition was heard finally.
1. Heard learned counsel for the parties.
2. The petitioners who are exporters, availed of credit facilities from the
respondent bank. To secure this facility, they mortgaged the property being
WP (C)No. 1884/2007 Page 1
N-81, Panchsheel Park, New Delhi. It is claimed that the value of the
property is in the vicinity of Rs.10 crores.
3. During the course of export trade, the petitioner received an amount of
Aus $ 75,000 on account of dues payable by one M/s Hemmi Import-Export.
A cheque was issued on 28.07.2005. The petitioner deposited the cheque
with the respondent bank on 03.08.2005. The bank credited the Indian
currency equivalent (of the Australian Dollars) in the petitioner's account on
23.08.2005.
4. The petitioner next adverts to two credit memos issued by the
respondent bank on 28.09.2005 and 30.09.2005 reflecting the charge of
interest @ 14.75% per annum on the outstanding amounts payable in its
loan account. One of the facilities availed by the petitioner was an over-draft
account. The petitioner further adverts to other letters/communication
stating that the balance outstanding in the foreign reserve bill account of the
firm was in excess of Rs.17.79 lakhs. It is claimed further that the petitioner
sought financing from alternative sources and therefore sought to clear its
outstanding. Alleging that no co-operation was forthcoming from the
respondent, it approached the District Consumer Redressal Forum on
12.05.2006. When the complaint was pending, the bank appears to have
WP (C)No. 1884/2007 Page 2
communicated that the cheque for Australian Dollars 75,000 had been
returned and sought to reverse the credit already given to the petitioner.
This was communicated to the petitioner by the respondent bank by letter
dated 01.06.2006. The letter also indicated the other outstanding demands
payable by the petitioners.
5. In these circumstances on 04.12.2006 the respondent bank issued a
notice under Section 13 (2) of the Securitisation and Reconstruction of
Financial Assets & Enforcement of Security Interest Act, 2002, (hereinafter
referred to as "the SRFAESI"), threatening action towards seizing the
mortgaged property for recovery of the outstanding amounts. The notice
demanded payment of Rs.53,11,808/-.
6. Claiming to be aggrieved by this notice, the petitioner approached this
Court under Article 226 of the Constitution of India. It is urged that the
respondent has sought to exercise the powers mala fide, compounding their
errors in not intimating about the return of the cheque within time, so as to
enable the petitioner to take necessary legal steps for the recovery of the
amount. Learned counsel submitted that although an application was made
under the Consumer Protection Act, the Forum was of the opinion that the
disputes were not covered under the said Act. However, after the
WP (C)No. 1884/2007 Page 3
intervention of the Consumer Commission the cheque was finally handed
over to the petitioner which thereafter filed a suit for recovery of
Rs.58,00,000/-, impleading the bank. It is submitted that the bank, in
addition to seeking recourse of the SRFAESI, also sought to recover the same
amount by filing an original application before DRT.
7. The bank's position is that the present writ proceedings are not
maintainable since an appeal is provided for, under Section 17 upon the
taking of measures under Section 13 (2). It is contended that the bank
initially gave credit to the cheque for Aus $ 75,000 but the same had to be
reversed since it was dishonored. In the circumstances, there is nothing
wrong in invoking provisions of the SRFAESI. Learned counsel submitted that
in any event the petitioner's grievance would be gone into by the DRT, in
case it chooses to file an appeal in that regard. During the pendency of this
proceeding at the stage of issuance of notice, the Court had by orders dated
31.07.2007 and 30.08.2007 sought to crystallize the issues by recording that
the amounts admittedly payable by the petitioner should be deposited. The
said two orders read as follows:
"Order dated 31.07.2007- W.P(C) No.1884/2007 &
C.M. No 3464/2007
Present: Mr. B.T. Singh with Mr. A.S. Anand and Mr. M.K.
WP (C)No. 1884/2007 Page 4
Jha for the Petitioner.
Mr. P.I. Jose for the Respondent.
Renotify this matter on 30.08.2007.
The Learned counsel for the petitioner submitted that
insofar as the amount due to the bank is concerned, the
same can be divided into two parts. One representing then
value of the cheque and the other the balance amount.
Insofar as the balance amount is concerned, the learned
counsel for the petitioner submits that he is willing to make
the payment for the same on the contractual rate of
interest as indicated in the letter dated 09.11.2005 issued
by the Bank to the Petitioner. Insofar as this payment is
concerned, the learned counsel for the petitioner requests
that the bank may allow three installments. This matter
needs to be sorted out between the petitioner and the
bank for which purpose they shall have a meeting. As
regards the amount represented by the cheque in
question, the same shall be taken up for decision on the
next date of hearing. The petitioner shall have a meeting
with the Chief Manager of the concerned Branch on
10.08.2007. On the date, the petitioner shall carry with
him the payment to the extent of 1/3rd of the amount
mentioned in the said letter dated 09.11.2005.
Interim order to continue."
"Order dated 30.08.2007 - W.P(C) No. 1884/2007
Present: Mr. B.T. Singh for the Petitioner.
Mr. P.I. Jose for the Respondent.
It is submitted that the sum of Rs.5,93,300/- was deposited
with the respondent Bank, being one third of the amount
admitted by the petitioner, on 10.08.2007. It is submitted
that the balance two thirds along with contractual rate of
14.75% p.a. would be deposited by the petitioner after
reasonable time is granted. Learned counsel for the
WP (C)No. 1884/2007 Page 5
respondent submitted that the contractual rate if not
14.75% to 16.75% subject to variation of the bank rate.
In view of the statements made, the petitioner shall
deposit the balance two thirds of the admitted principal
amount, along with interest worked out at the rate of
14.75% p.a. with quarterly rests within three months from
today. It is open to the petitioner to pay these in
convenient installments. The above directions are without
prejudice to the rights and contentions of both parties.
List on 07.01.2008. Interim order shall continue."
9. It is further, an undisputed fact that the sum of Rs.23,79,036/- has
been deposited by the petitioner with the respondent bank.
10. From the above, it is apparent that the impugned controversy upon
which, the notice was founded included the petitioner's liability to pay Indian
currency equivalent to Aus $ Dollars 75000. The cheque drawn for the
purpose was deposited with the bank on 03.08.2005. Learned counsel for
the bank had submitted that message intimating the return of the cheque
was received by it on 18.08.2005, credit was accordingly given shortly
thereafter. The bank, however, intimated about reversal of credit on account
of dishonor of the cheque about eight months subsequently, in May 2006.
The petitioner is not disputing the liability to pay the balance amount as per
its arrangement with the bank. It is not in dispute that the sum of
Rs.23,79,036/- was deposited by the petitioner as on 03.12.2007. The bank
WP (C)No. 1884/2007 Page 6
has also chosen to proceed against the petitioner for recovery of amount
before the DRT. The petitioner too has filed a suit against various parties
including the bank that involves determination of the same issues. In these
peculiar circumstances, the Court is of the opinion that since factual disputes
have to be adjudicated after considering the evidence, in regard to the
parties' role as well as the petitioner towards liability of payment of the
Indian rupee equivalent to Aus $ 75000, the notice in question should not be
proceeded with, at least until the outcome of the proceedings before the
DRT.
11. Since the petitioner has not apparently filed a counter claim before the
DRT, learned counsel submitted that the same would be done within a period
of four weeks. It is further submitted by the respondent bank that there was
a small controversy that a further Rs.4.61 lakhs was payable by the
petitioner. To put an end to the controversy, it is hereby directed that
petitioner should deposit a further sum of Rs.2 lakhs with the respondent
bank within four weeks as an ad hoc deposit without prejudice to his rights
and contentions.
12. In the above circumstances, the interim order granted on 29th March,
2007 is made absolute. The respondent shall not take any coercive steps
WP (C)No. 1884/2007 Page 7
pursuant to the impugned notice till the conclusion of the proceedings before
the DRT. In case any steps are required to be taken, it shall be guided and
bounded by such decision. The petitioner is granted liberty to file counter
claim before the DRT within a period of four weeks from today. The DRT
shall consider the application and counter claims of the petitioner and render
its decision as early as possible, preferably within six months from today. All
rights and contentions of the parties hereby reserved.
The writ petition is disposed of in the above terms.
S. RAVINDRA BHAT
(JUDGE)
JANUARY 21, 2009
WP (C)No. 1884/2007 Page 8
