Madras High Court
Lotus Hospital And Research Centre Ltd vs M/S.Housing And Urban Development ... on 26 February, 2025
Author: Mohammed Shaffiq
Bench: Mohammed Shaffiq
W.P. No.5608 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 26.02.2025
CORAM
THE HONOURABLE MR.K.R.SHRIRAM, CHIEF JUSTICE
AND
THE HONOURABLE MR.JUSTICE MOHAMMED SHAFFIQ
W.P. No.5608 of 2020
and W.M.P. Nos.6700 of 2021, 6563 and 6564 of 2020
1.Lotus Hospital and Research Centre Ltd.,
Rep. By its Managing Director,
Dr.E.K.Sagadhevan,
No.90, Thayumanavar Sundaram Street,
Poonadurai Road, Erode-638 002.
2.Dr.E.K.Sagadhevan
3.Dr.E.S.Usha
4.Dr.Shanthi Selvan
5.Mr.K.Jayakrishnan ... Petitioners
Vs.
1.M/s.Housing and Urban Development Corporation Ltd.,
“HUDCO BHAVAN”, India Habitat Centre,
Lodhi Road, New Delhi-110 003.
Regional Office at
5th Floor, CMDA Tower-II,
No.1, Gandhi Irwin Road, Egmore,
Chennai-600 008.
Through its Authorised Signatory and
Joint General Manager (Law), R.Murugesan.
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W.P. No.5608 of 2020
2.The Registrar,
Debts Recovery Appellate Tribunal,
Chennai-600 008. ... Respondents
PRAYER: Petition under Article 226 of the Constitution of India seeking
issuance of a writ of Certiorarified Mandamus calling for the records of the
impugned order dated 19.12.2019 passed in R.A.No.102 of 2019 on the file
of the 2nd Respondent and quash the same and consequently confirm the
order dated 05.10.2018 passed in O.A.No.156 of 2013, Debt Recovery
Tribunal, Chennai.
For Petitioner : Mr.Om Prakash
Senior Advocate
for M/s.Ramalingam and
Associates
For Respondents : Mr.M.Vaidhiyanathan (For R1)
R2- Tribunal
ORDER
(Order of the Court was made by Mohammed Shaffiq, J.)
The present writ petition is filed challenging the impugned order in
R.A.No.102 of 2019 dated 19.12.2019 of the Debt Recovery Appellate
Tribunal (DRAT), on the premise that it suffers from manifest arbitrariness
inasmuch as it affirms the action of the 1 st respondent financial institution in
resiling/reneging its offer/promise.
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2. The 1 st petitioner proposed to establish an Hospital at Erode with a
view to provide better medical care in Rural area. The project cost was
estimated at Rs. 20 Crores. The first respondent came forward to fund the
petitioner hospital under the “Rural Infrastructure Development Scheme”
envisaged by the first respondent. In terms of the said Scheme the 1 st
respondent was to fund projects including hospitals for development of
rural infrastructure, with a condition that the project/establishment would
provide for certain concessions, one of them being that such hospital would
provide 20% of the beds free of cost to rural public. The first respondent
granted a loan of Rs.827.95 lakhs for construction of 100 bedded multi-
speciality hospital at Kasipalayam, Erode. The petitioner executed necessary
documents including mortgage deed as security for the loan advanced by
the 1 st respondent. While, petitioners 2 to 4 (1 st petitioner is the Managing
Director; 2nd petitioner is a Doctor and wife of the 1 st petitioner, petitioners
3 and 4 are the Directors of the 1 st petitioner), executed personal guarantee
in favour of the 1 st respondent.
3. The petitioner due to a variety of reasons inter alia including
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financial bottlenecks, non availability of adequate finance at the right time,
policy measures introduced by the government which according to the
petitioner had a negative impact, rendered the project itself unviable. As a
consequence, there were defaults made by the petitioner in servicing/
repayment of the loans obtained, which is not in dispute.
4. In view of the above default, the first respondent took measures to
recover the loan amount. The first respondent filed an Original Application
in O.A. No.276 of 2003, renumbered as (O.A.No.156 of 2013) on the file of
Debts Recovery Tribunal, Chennai, seeking to recover a sum of Rs.
11,42,30,870/- together with interest @16.5% per annum with quarterly
rests. The first respondent herein invoked provisions of SARFAESI Act,
which was challenged by the petitioner in S.A.No.167 of 2013. The Tribunal
was pleased to grant a stay on condition that the petitioner deposits a
portion of the claim amount. Accordingly, the petitioner paid a sum of
Rs.8.27 crores to the 1 st respondent on 6 dates commencing from 4.5.2006
and ending on 1.7.2013. The petitioner filed a Counter Claim in the above
said OA to which the 1 st respondent had filed its reply. However, in view of
the promise stated to have been made by the 1 st respondent herein to
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consider the OTS proposal, and with a view to settle the matter, the
petitioner withdrew the Counter Claim.
5. The Debts Recovery Tribunal vide order dated 05.10.2018 found
that the respondent bank is entitled for a recovery certificate as against
petitioners 1 to 5 for a sum of Rs.11,42,30,870/- together with interest @
9% (simple), till the date of realization. Pursuant to the final order, a Debt
Recovery Certificate in DRC No.129/2018 dated 27.11.2018 was issued
determining the amount payable at Rs.17,11,47,281.05.
6. The petitioner vide Email dated 11.11.2018, expressed their intent
to discharge the certified amount by making RTGS and requested the
respondent bank to send the account details necessary for making RTGS.
The respondent bank vide its communication dated 20.11.2018, stated that
in view of the petitioners' intention to discharge the outstanding due
amount as per the DRT final order, the competent authority of the
respondent bank had accorded “in principle approval”, for acceptance of the
final order dated 05.10.2018, provided the petitioner clears the entire dues
within 7 days from the date of receipt of the letter, failing which, the
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respondent bank would prefer appeal, praying for contractual rate of
interest on pendente lite/post decree on the decreed amount. The petitioner
vide its email dated 28.11.2018 stated that it would comply with the above
mentioned DRT order and recovery certificate without prejudice to its
rights. Petitioner also agreed to pay the decreed amount/recovery certificate
amount in terms of the order dated 05.10.2018 in OA No.156 of 2013,
while transferring/paying a sum of Rs.5 lakhs to verify the RTGS/NEFT
details, provided by the Respondent Bank. Thereafter, the respondent bank
vide its email dated 28.11.2018, while acknowledging the receipt of Rs. 5
lakhs “in part compliance” of its undertaking/offer vide letter dated
20.11.2018 called upon the petitioner to remit 17,26,65,040/- with an
additional amount of Rs.28,167/- for each day's delay after 20.11.2018. The
respondent also suggested in the said Email dated 28.11.2018 that the
petitioner makes substantial payment by 29.11.2018. Pursuant thereto,
petitioner made a payment of Rs.10 Crores on 29.11.2018 and Rs 7.15
Crores was paid on 01.12.2018, in all amounting to Rs.17.20 Crores. The
respondent bank vide its email dated 11.12.2018, while acknowledging
receipt of the above payments indicated that there is still a small
difference to be paid by the petitioner. The said difference was also paid by
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the petitioner on 21.01.2019, which included the legal expenses. It is
submitted the entire amount due as per DRC No.129 of 2018, amounting to
Rs.17,29,87,136/- was paid on the following dates:
S.No. Date Amount in Rs. UTR No.
1. 28.11.2018 5,00,000.00 CORPH18332669968
2. 29.11.2018 10,00,00,000.00 CORPR220181129006655
3. 01.12.2018 7,15,00,000.00 CORPR220181201005961
4. 21.01.2019 9,87,136.00 CORPH19021677117
7. The petitioner filed a Memo before the Recovery Officer of the
Tribunal to record full satisfaction of DRC No.129 of 2018. The first
respondent appeared before the Recovery Officer on 02.04.2019, after
confirming the receipt of payment of Rs.17,29,87,126/- filed a Memo before
the Recovery Officer stating that there is still a difference of Rs.8,60,734/-
representing expenses incurred towards insurance, legal fees, news paper
publication, etc. to be paid by the petitioner. It was submitted that the
above expenses were left out and an application was filed to amend the cost
memo. Importantly, it was also stated that an appeal has been preferred
before the DRAT against the order of the Tribunal viz., DRT in OA No.156
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of 2013 dated 05.10.2018.
8. It was only then the petitioner got to know of the fact that the first
respondent had preferred an appeal before the DRAT in AIR No.122 of
2019 (R.A.No.102 of 2019) against the order dated 05.10.2018 praying for
revision/enhancement of interest to the contractual rate. The petitioner
paid the remaining sum of Rs.8,75,000/- on 03.04.2019.
9. The DRAT vide impugned order dated 19.12.2019, while recording
that the respondent bank had agreed to receive the dues, still proceeded
with the appeal challenging the rate of interest and allowed the appeal by
enhancing the rate of interest to 12 % per annum on finding that the rate of
interest fixed at 9% per annum was on the lower side. The only reason
which is set out in the order of DRAT while entertaining the prayer of the
respondent bank for enhanced rate of interest was that it would serve public
interest nor can there be any estoppel. The impugned order also finds that
the bank cannot be faulted to receive the amount towards settlement of
dues, on the premise that the first priority of any banker/financial
institution is to receive any amount offered/made available.
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10. It is this order of the Appellate Tribunal, which is the subject
matter of challenge in the present writ petition inter alia on the following
premise viz.,
a) The Debt Recovery Appellate Tribunal failed to consider the fact
that the entire due amount has been paid to the respondents as ordered by
the Debt Recovery Tribunal -III as per the DRC and hence no appeal will lie
after the payment having been made in full.
b) The Debt Recovery Appellate Tribunal ought to have considered
the fact that the petitioners have even paid in excess of the DRC amount to
the first respondent
c) The Debt Recovery Appellate Tribunal failed to consider the fact
that the first respondent had already received the said amount as
mentioned in the DRC, but still not returned the original loan documents.
11. On the other hand, learned counsel for the respondent would
reiterate the reasoning of the Tribunal and would submit that as found by
the Tribunal, the first priority of any bank/financial institution is to receive
any amount, which the borrower comes forward to pay, and public interest
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would enable the banker/financial institutions to thereafter resile/renege on
promise/agreement/settlement made by such financial institutions/banker.
12. We are unable to concur with the reasoning of the DRAT. We may
have to run through the facts once again to see the manifest arbitrariness,
unfairness in the action of the respondent Bank in resiling/reneging from its
promise on the basis of which the petitioner arranged its affairs including
arranging for the sums agreed upon by the respondent to put an end to the
litigation and resolve the issue.
(a) After and consequent to the order of the DRT in OA No.
276/2003 (Renumbered as O.A.No.156 of 2013) dated 05.10.2018, and
pursuant to which a Debt Recovery Certificate (DRC) dated 27.11.2018
was issued showing a sum of Rs.17,11,47,281.05/- as due and payable by
the petitioners herein, the petitioner as narrated supra had made payments
in excess of the amount mentioned in DRC, in view of the promise made by
the respondent bank that it had obtained an “in principle approval from the
Competent Authority” to settle the issue on the basis of the DRT Order
dated 05.10.2018.
(b) Though repetitive, it may be relevant rather necessary to refer to
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Emails and Correspondence, which prompted the petitioner to make the
payment and discharge its dues in terms of DRC dated 27.11.2018.
i) The petitioner had vide its email dated 11.11.2018 expressed its
intent to discharge the certified amount in terms of DRC dated 27.11.2018
by making RTGS to the respondent account towards satisfaction of its
liability in terms of order of the DRT. In response, the respondent bank vide
email dated 12.11.2018 furnished details of outstanding at
Rs.17,20,48,610/-, notwithstanding the respondent's right to prefer an
appeal. Importantly, the respondent vide communication dated 20.11.2018
addressed to the petitioner stated that the Competent authority of HUDCO
has accorded “in principle approval for acceptance of the final order dated
05.10.2018” and required the petitioner to pay the entire dues within 7
days from receipt of the said letter dated 20.11.2018. The relevant portion
of the above emails and the communications is extracted hereunder:
i) Email dated 12.11.2018:
In accordance with the order dated 05.10.2018, passed
by Hon'ble DRT -3 Chennai in OA No.156 of 2013, we intend
to discharge the certified amount by making RTGS to your
account towards satisfaction of our liability. Hence we request
you to kindly send the HUDCO account details necessary for
RTGS
ii) Email dated 12.11.2018:
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'” The above Bank details as sought by you
are furnished notwithstanding HUDCO's right to
prefer appeal before higher forum for seeking
appropriate relief for recovery of contractual dues.
The cost memo filed by HUDCO for an amount of
Rs.17,20,48,610/- (Rupees Seventeen Crores
Lakhs Forty Eight Thousand Six Hundred and Ten
only) as on 31.10.2018 in compliance to DRT
order is enclosed.”
iii) Email dated 20.11.2018:
“In view of your intention to discharge the
outstanding dues amount as per the DRT final
order, the Competent Authority of HUDCO has
now accorded in-principle approval for acceptance
of the final order dated 05.10.2018 passed by the
Hon'ble DRT subject to the condition that
M/s.Lotus Hospitals and Research Centre Ltd.,
clears the entire dues within 7 (Seven) days from
the date of receipt of this letter, failing which
HUDCO shall prefer appeal before Hon'be DRAT
praying for contractual rate of interest on
pendentelite/post decree on the OA decreed
amount and also simultaneously proceed for
execution of the DRT final order dated
05.10.2018, before the Recovery Officer, DRT,
Chennai.
Accordingly, the total dues payable s on
20.11.2018 works out to Rs.17,26,65,040/-
(Rupees Seventeen Crores Twenty Six Lakhs Sixty
Five Thousand Forty Only), calculation sheet
enclosed. You may add an amount of Rs.28,167/-
(Rupees Twenty Eight Thousand One Hundred
and Sixty Seven only) for every additional day
beyond 20.11.2018 till the date of payment,
which should be within seven days from the date
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of receipt of this letter.”
(emphasis supplied)
(iv) Pursuant to the above communication, the petitioner paid a sum
of Rs.5 lakhs to verify the RTGS/NEFT details provided on 28.11.2018. The
respondent bank while acknowledging the above payment vide its email
dated 28.11.2018 as part compliance, called upon the petitioner to remit a
sum of Rs.17,26,65,040/- within 7 days from 28.11.2018, while indicating
that the petitioner would be liable to pay additional amount of Rs.28,167/-
for each day's delay beyond 20.11.2018. The respondent bank also
suggested that the petitioner makes substantial payment by 29.11.2018.
The relevant portion of the email dated 28.11.2018 of the petitioner and
the email in response by the respondent is extracted hereunder:
E-mail dated 28.11.2019:
“We acknowledge the receipt of Rs.5,00,000/- (Rupees
Five Lakhs only) in our CA no.00000036015854586
maintained at SBI, CAG-II (17313), New Delhi – 110 001 on
28.1.2018, in part compliance of this office letter dated
20.11.2018, calling upon you to remit a sum of
Rs.17,62,65,040/- (Rupees Seventeen Crores Twenty Six Lakhs
Sixty Five Thousand and Forty only) within seven days from
the date of receipt of our letter, with additional amount of
Rs.28,167/- per day beyond 20.11.2018.
As already intimated to you, the Competent Authority of
HUDCO has approved only a period of seven days to clear the
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balance dues from the date of receipt of our letter dated
20.11.2018 failing which HUDCO shall prefer appeal before
the DRAT.
You are requested to make substantial payment by
29.11.2018 i.e. before expiry of seven days from the date of
receipt of our letter dated 20.11.2018, so that we can take up
your request received vide email dated 28.11.2018 for settling
the balance dues by Monday i.e. 03.12.2018 with the
competent authority of HUDCO.”
(emphasis supplied)
(v) The petitioner paid a sum of Rs.10 Crores to the respondent bank
on 29.11.2018 and another sum of Rs.7.15 Crores on 01.12.2018.
Thereafter on 03.12.2018 the petitioner sought for clarifications regarding
any difference amount, which needs to be paid in addition to Rs. 17.20
Crores paid already. The respondent Bank in response vide its email dated
11.12.2018, stated that there is still certain payment to be made. The
petitioner paid a sum of Rs.9,87,136/- on 21.01.2019 i.e., difference to be
paid according to the respondent. The petitioner vide its email dated
23.01.2019, indicated that the entire amount due to the respondent bank
has been paid and in addition thereto the legal expenses had also been paid
and requested the bank to release the security at the earliest. Thereafter, a
Memo recording full satisfaction was filed by the petitioner before the DRT
in March, 2019. While so, the petitioner was informed that a further sum of
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Rs.8,60,734/- is still due and that the respondent bank had preferred an
appeal against the order dated 05.10.2018 for revision of interest at
contractual rates before the DRAT in A.I.R. No.122 of 2019.
(vi) The above sequence of events would show that the petitioner had
come forward with this settlement offer with a view to put an end to
litigation. Importantly, the petitioner had made the payments pursuant to
the respondent bank stating that the competent authority of HUDCO had
accorded an “in-principle approval for acceptance of the final order dated
05.10.2018”, thereby driving the petitioner to alter its position and make
the above payment of Rs.17 Crores and odd within a week.
(vii) Viewed in the backdrop of the above facts there is no doubt in
our mind that the action of the respondent in resiling/reneging from the
promise smacks of manifest arbitrariness and unfairness. If so, court in
exercise of its power under Article 226 would strike at it for it is trite that
every action of the respondent bank, and in this case it is also a public
sector enterprise fully owned by the Government of India and may be called
in this case even an instrumentality of State, must be guided by fairness and
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must satisfy the test of reasonableness. In this regard it may be relevant to
refer to the decision of the Supreme Court in Food Corporation of India v.
Kamdhenu Cattle Feed Industries1 , wherein it was held as under:
“7. In contractual sphere as in all other
State actions, the State and all its instrumentalities
have to conform to Article 14 of the Constitution
of which non-arbitrariness is a significant facet.
There is no unfettered discretion in public law : A
public authority possesses powers only to use
them for public good. This imposes the duty to act
fairly and to adopt a procedure which is ‘fairplay
in action’. Due observance of this obligation as a
part of good administration raises a reasonable or
legitimate expectation in every citizen to be
treated fairly in his interaction with the State and
its instrumentalities, with this element forming a
necessary component of the decision-making
process in all State actions. To satisfy this
requirement of non-arbitrariness in a State action,
it is, therefore, necessary to consider and give due
weight to the reasonable or legitimate
expectations of the persons likely to be affected by
the decision or else that unfairness in the exercise
of the power may amount to an abuse or excess of
power apart from affecting the bona fides of the
decision in a given case. The decision so made
would be exposed to challenge on the ground of
arbitrariness. Rule of law does not completely
eliminate discretion in the exercise of power, as it
is unrealistic, but provides for control of its
exercise by judicial review.”
1 . (1993) 1 SCC 71
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viii) Yet another reason why we would not want to give the
imprimatur of this Court to the impugned order of the DRAT, is that it
would introduce uncertainty and litigation would lack finality, a principle
based on public policy. In this regard it may be relevant to refer to the
decision of the Supreme Court in the case of M.Nagabhushana and others
v. State of Karnataka2, wherein, while dealing with finality of orders of
court, the following observations were made. The relevant portion of the
aforesaid judgment of the Supreme Court is extracted hereunder :
“13. That principle of finality of litigation is based on the
high principle of public policy. In the absence of such a
principle great oppression might result under the colour
and pretence of law inasmuch as there will be no end of
litigation and a rich and malicious litigant will succeed in
infinitely vexing his opponent by repetitive suits and
actions. This may compel the weaker party to relinquish his
right. The doctrine of res judicata has been evolved to
prevent such an anarchy. That is why it is perceived that
the plea of res judicata is not a technical doctrine but a
fundamental principle which sustains the rule of law in
ensuring finality in litigation. This principle seeks to
promote honesty and a fair administration of justice and to
prevent abuse in the matter of accessing court for agitating
on issues which have become final between the parties.”
ix) The above principle would apply a fortiori inasmuch as pursuant
to the order of Tribunal in O.A.No.156 of 2013 dated 05.10.2018,
2. (2011) 3 SCC 408
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settlement was arrived at with a view to put an end to litigation which the
respondent Bank has resiled/reneged in cavalierly fashion.
x) It may also be relevant to refer to the judgment of the Supreme
Court in Plasto Pack v. Ratnakar Bank Limited3, wherein the manner in
which Banks are to conduct itself in considering settlement proposal has
been explained. The relevant potion is extracted hereunder:
“12. By order dated 3-3-1995 relief (a) set out in
the plaint was granted “as it was”, without
specifying the exact decretal amount and the rate
of interest allowed by the Court. Such of the
prayers as were not granted by decree dated 3-3-
1995 would be deemed to have been refused and
to that extent the suit shall be deemed to have
been dismissed. More than two years and eight
months later the Court could not have, on a mere
notice of motion, substituted almost a new decree
in place of the old one by granting such reliefs as
were not granted earlier and that too without
noticing the defendant-appellants. As held in K.
Rajamouli v. A.V.K.N. Swamy [(2001) 5 SCC 37]
power to amend a decree cannot be exercised so
as to add to or subtract from any relief granted
earlier. A case for setting aside the decree was
earlier made out. In the facts and circumstances of
the case the Division Bench ought to have taken a
liberal view of the events and entertained the
appeal for consideration on merits by condoning
the delay in filing the same. However, that was not
3. (2001) 6 SCC 683
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done. We are satisfied that grave injustice has
been done to the appellants by denying them an
opportunity of hearing and contesting the suit on
its merits. We are also of the opinion that the
respondent Bank ought to have taken a reasonable
stand and should have sympathetically considered
the proposal of the appellants which was not
lacking in bona fides and in the interest of
avoiding litigation and early recovery of
outstanding debts the respondent should have
compromised the suit. Even if the appellants'
proposal was not acceptable to the respondent, at
least a counter-proposal should have been made in
which case an across-the-table discussion between
the parties with the assistance of their learned
counsel would have brought out a mutually
accepted resolution and an end to the litigation.
We are constrained to observe that this litigation is
being perpetuated because of the unreasonable
and rigid attitude of the respondent Bank.”
(emphasis supplied)
c) In view of the above judgments of the Supreme Court, the conduct
of the respondent bank clearly fails the test of fairness. We say so, while
conscious of the fact that the court under Article 226 of the Constitution
cannot compel acceptance of settlement by a bank, however, here the
respondent bank had on its volition accepted the settlement offer by the
petitioner and made the petitioner alter its position by stating that it had
obtained “in-principle approval to accept the order of the Tribunal in
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OA.No.156 of 2013 dated 05.10.2018” and after receiving the entire
amount in terms of the Debt Recovery Certificate in DRC No.129 of 2018
dated 27.11.2018 has proceeded to file an appeal, which is manifestly
arbitrary and unfair thereby falls foul of Article 14 of the Constitution.
d) Settlement between the petitioner and the banker is in the nature
of a contract4. If so, the conduct of the respondent bank would also fall foul
of the Doctrine of approbate and reprobate. It is trite law that no one can
approbate and reprobate and anyone who has accepted with full knowledge
or notice of facts, benefits under a transaction which he might have rejected
or contested, cannot question the transaction or take up an inconsistent
position qua the same5. This principle has to be applied with more vigour as
a common law principle, if such a party actually enjoys the one part fully
and on near completion of the said enjoyment, thereafter questions the
other part. An element of fair play is inbuilt in this principle6.
4. Mahesh Bharathan vs. Bank of Baroda and Ors. (23.01.2018 - MADHC) : MANU/TN/2249/2018
5. Bharti Cellular Ltd. v. Union of India ; (2010) 10 SCC 174 ; City Montessori School v. State of
U.P.; [(2009) 14 SCC 253]; New Bihar Biri Leaves Co. v. State of Bihar ;[(1981) 1 SCC 537] ;R.N.
Gosain v. Yashpal Dhir ;[(1992) 4 SCC 683]
6. Shyam Telelink Ltd. vs. Union of India, (2010) 10 SCC 125
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13. It may also be relevant to refer to the judgment of the Apex Court
in the case of State of Uttar Pradesh vs. Karunesh Kumar and Others7,
wherein it was held as under:
“ 27.2....
23...It is settled proposition of law that once
an order has been passed, it is complied with,
accepted by the other party and derived the
benefit out of it, he cannot challenge it on any
ground. (Vide Maharashtra SRTC v. Balwant
Regular Motor Service [AIR 1969 SC 329].) In
R.N. Gosain v. Yashpal Dhir [(1992) 4 SCC
683] this Court has observed as under : (R.N.
Gosain case [(1992) 4 SCC 683], SCC pp. 687-
88, para 10) ‘10. Law does not permit a
person to both approbate and reprobate. This
principle is based on the doctrine of election
which postulates that no party can accept and
reject the same instrument and that ‘a person
cannot say at one time that a transaction is
valid and thereby obtain some advantage, to
which he could only be entitled on the footing
that it is valid, and then turn round and say it
is void for the purpose of securing some other
advantage’. ..............
25........A party cannot be permitted to “blow
hot and cold”, “fast and loose” or “approbate
and reprobate”. Where one knowingly accepts
the benefits of a contract or conveyance or an
order, is estopped to deny the validity or
binding effect on him of such contract or
conveyance or order.”
7. (2022) SCC Online SC 1706
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(emphasis supplied)
14. From the above discussion, it is clear that the reasoning of the
appellate tribunal that public interest requires that interest must be
enhanced to 12% per annum and thus the respondent bank is justified in
resiling/reneging its promise is unjustified inasmuch as it would result in
creating an atmosphere of mistrust and promote unfairness in action of
State instrumentalities and would also fall foul of the Doctrine of Approbate
and Reprobate founded on equity and fairness.
15. Before proceeding we must add, if we accept what Debt Recovery
Appellate Tribunal has stated, it would amount to giving our imprimatur to
persons to make a commitment, enter into an agreement and make the
other party comply and then renege what has been committed. This would
only encourage dishonesty. The order of the Debt Recovery Appellate
Tribunal is thus liable to be set aside.
16. Petition is allowed. Order of the Debt Recovery Appellate Tribunal
dated 19.12.2019 is quashed and set-aside. W.M.P.No.6563 of 2020 filed by
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petitioners to permit them to join together and file a single writ petition is
allowed, inasmuch as they have paid separate court-fee. The other interim
applications are closed. There shall be no order as to costs.
(K.R.SHRIRAM, C.J) (MOHAMMED SHAFFIQ, J.)
26.02.2025
Index : Yes/No
NC : Yes/No
bbr/mka
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To:
1.The Authorised Signatory and
Joint General Manager (Law),
Housing and Urban Development Corporation Ltd.,
“HUDCO BHAVAN”, India Habitat Centre,
Lodhi Road, New Delhi-110 003.
Regional Office at
5th Floor, CMDA Tower-II,
No.1, Gandhi Irwin Road, Egmore,
Chennai-600 008.
2.The Registrar,
Debts Recovery Appellate Tribunal,
Chennai-600 008.
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THE HON'BLE CHIEF JUSTICE
AND
MOHAMMED SHAFFIQ,J.
bbr
26.02.2025
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