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2008 Supreme(SC) 593
2008(2) Supreme 816
Supreme Court of india
Tarun Chatterjee & Harjit Singh Bedi,JJ.
Syndicate Bank — Petitioner
versus
New Look Rubbers (P) Ltd & Ors. — Respondents
Appeal (civil) 8491 of 2001
Decided on : 03-04-2008
Headnote:Sick Industrial Companies (Special Provisions) Act, 1985 — Section 22(1) — Industries Development and Regulation Act, 1951 — Section 18FH — Appellant Bank filed civil suit against respondent company for recovery of sums advanced as loan plus interest — Said suit was decreed with positive finding that there was no harsh or arbitrary behaviour in the proceedings against Respondent — Admittedly, no appeal was filed against said judgment and it attained finality — The appellant Bank thereafter filed execution petition for realization of decretal amount on which respondent filed suit praying that appellant Bank be injuncted from executing decree-Said suit too was dismissed — Another Pauper Petition was filed by respondent claiming damages from Bank and this too was dismissed — Admittedly all these matters attained finality — Two sets of objections in execution petition, were filed with regard to applicability of section 22(1) of SICA and section 18 FH of the Regulation Act and in meanwhile, property mortgaged was sold in execution of the decree — Said objection petitions were dismissed — Revision — Allowed by High Court-Appeal-Plea of appellant that High Court had overstepped its jurisdiction as after giving a positive finding that respondent was not entitled to any relief under section 22 of the SICA or under section 18 FH of Regulation Act, it had virtually set aside all effective orders of Civil Courts which had been made in favour of appellant Bank and had attained finality — Held High Court clearly overstepped its jurisdiction — In the light of issues decided by Civil Court in various litigations which were allowed to become final and as the decree had already been executed in as much that mortgaged property had been sold, directions issued by High Court were clearly not warranted — Appeal, allowed setting aside impugned order of High Court. (Para 7)
Facts of the Case :
1.Appellant Bank herein in the instant case filed civil suit against respondent company for recovery of sums advanced as loan plus interest. Said suit was decreed with positive finding that there was no harsh or arbitrary behaviour in the proceedings against Respondent.Admittedly, no appeal was filed against said judgment and it attained finality. The appellant Bank thereafter filed execution petition for realization of decretal amount on which respondent filed suit praying that appellant Bank be injuncted from executing decree. Said suit too was dismissed .Another Pauper Petition was filed by respondent claiming damages from Bank and this too was dismissed. Admittedly all these matters attained finality.Two sets of objections in execution petition, were filed with regard to applicability of section 22(1) of SICA and section 18 FH of the Regulation Act and in meanwhile, property mortgaged was sold in execution of the decree. Said objection petitions were dismissed. Revision thereagainst was allowed by High Court.
2.Present appeal has been filed against said order of High Court.
Findings of the Court :
High Court clearly overstepped its jurisdiction. In the light of issues decided by Civil Court in various litigations which were allowed to become final and as the decree had already been executed in as much that mortgaged property had been sold, directions issued by High Court were clearly not warranted. Again, held that there could be no objection to revival of respondent’s unit but that was a matter between respondent and the Kerala Financial Corporation or other Governmental Agencies and would not in any manner affect legal rights that had accrued to appellant as a consequence of a series of orders/ judgments. Appeal, allowed setting aside order of High Court.
Result : Appeal allowed.
judgment
Harjit Singh Bedi, J. —
1.This appeal by special leave arises out of the following facts.
2.The Syndicate Bank, the appellant herein, sanctioned various credit limits to the respondent No.1 company including an overdraft limit of Rs.1,00,000/- and working capital term loan of Rs.1,00,000/- on certain prescribed conditions. These loans were granted after cancellation of the earlier limits with a view to nurse respondent No.1 which was a sick unit. In order to secure the advance, the Managing Director of respondent No.1, that is respondent No.2 and the other Directors executed several documents as securities and respondent No.2 also mortgaged his property to the Bank as a collateral security. As the respondent No.1 defaulted in the repayment of the loan, the Bank filed a suit for recovery (O.S.No.732/1987) in the Trichur Civil Court seeking a decree for Rs.1,19,832.63 with interest @ 12.5% per annum in the Term Loan Account and Rs.2,09,120.75 in the Overdraft Account with interest @ 16% per annum compounded quarterly. The following issues were framed in the suit :
1)What is the correct amount that is due to the Plaintiff?
2)Whether the defendants are entitled to the benefit of the direction given by the Reserve Bank of India on sick units?
3)What is the correct rate of interest?
4)Reliefs and costs.
3.The trial court observed that the Bank had not been harsh or arbitrary in dealing with the defendants and that it appeared that the defendants were not prepared to repay the loan despite the agreements that had been executed. It was also observed that the defendants were not entitled to the benefit of any scheme framed for the rehabilitation of sick units which had been formulated by the Reserve Bank of India. The suit was accordingly decreed on 9th April 1990 and the defendants were given a year’s time for payment. No appeal was filed against this judgment with the result that it attained finality. An application for execution of the decree (EP No. 819/1991) was filed by the Bank on 20th December 1991 and while the matter was still pending, the judgment-debtors (the defendants in the above suit) filed civil suit (No.1340/1993) for injunction seeking an order prohibiting the execution of the decree rendered in O.S. No.732/1987 alleging that it was a nullity. The Bank contested the suit which was ultimately dismissed by Judgment & Order dated 1st March 1996 and as no appeal was filed thereagainst, this decision too attained finality. In April 1993, the judgment-debtors also filed a Pauper Petition (No. 19/1993) in the Sub-Court, Trichur claiming damages of about Rs.30/- lacs from the Bank with 18% and 100% ex-gratia payment on several grounds. This suit was dismissed for non-prosecution on 15th November 1995 and an application for its restoration was also dismissed on 6th June 1997. As no further proceedings were taken by the judgment-debtors, these orders attained finality as well. It appears that while this spate of litigation was continuing, the judgment-debtor filed various objections (during the year 1994-97) in E.P.No.819/1991 alleging that the decree was not executable, and amongst others, two objection petitions being E.A.No. 847/1997 and 1197/1997 were filed claming the protection and benefits available under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter called “SICA”) and under section 18FH of the Industries Development and Regulation Act, 1951 (hereinafter called the “Regulation Act”) praying that the execution proceedings be kept in abeyance till such time the proceedings initiated by the Government of Kerala for the revival of the unit were going on. It appears that while the objections were pending, the mortgaged property of judgment-debtor No.2 was sold in auction by the executing court for a sum of Rs.3.50 lacs which was deposited in Court and later released to the Bank and the sale was also confirmed and possession of the property handed over to Antony the auction purch
