Violation of loan terms and lack of consent from the Registrar rendered the demand letters non-binding.

DR. MUKUNDAKAM SHARMA, C. J. :- By this judgment and order, we propose to dispose of the Letters Patent Appeal, which is filed against the impugned judgment and order passed in the writ petition (Civil) No. 3527/2006.

2. The aforesaid writ petition was filed by the appellant herein in respect of the demand letters issued by the respondent - bank. In one of the said demands dated 31st May, 2005, the bank has alleged non-payment of the bank dues amounting to Rs. 87,740/-. The second demand letter was issued by the bank on 31st May, 2005 alleging non-payment of the bank dues amounting to Rs. 1,01,911/-. In the aforesaid writ petition, which was filed by the appellant, there was a prayer that the respondent was under hardship and, therefore, a direction should be issued to the respondent to accept the payment of dues in instalments.

3. The learned Single Judge considered the various prayers raised by the appellant herein as the writ petitioner and thereafter passed the impugned order recording reasons for the decision. Being aggrieved by the aforesaid order, the appellant has filed the present appeal on which we have heard the learned counsel appearing for the parties. We have also perused the records placed before us and in the light thereof we propose to dispose of the present appeal.

4. The appellant took two loans from the respondent-bank, one for purchase of machinery that was hypothecated and the other on equitable mortgage of the land. The bank granted the aforesaid loan to the appellant in 1996 and necessary documents in that regard were also executed. However, in violation of the trust, the appellant sold the machinery without intimation to the bank and also sold the land, although the same was mortgaged with the bank for which also no intimation was sent. The appellant did not repay the loans and became a defaulter and the matter was referred to arbitration as provided for under the Delhi Cooperative Societies Act, 1972 to the Registrar. Arbitrator was appointed by the Registrar in accordance with the provisions of the Act and the Rules framed thereunder. On completion of the said arbitration proceedings, two separate awards were passed. So far award No. 1 is concerned, which is dated 26th December, 1999, an award was passed that the appellant and his sureties will pay jointly and severally to the bank the sum as mentioned in the said award. Second award was also passed on the similar lines for the sum ascertained therein. Legality and validity of the aforesaid awards was not challenged by the appellant in any forum and, therefore, the said awards became final and binding. The appellant, however, did not pay the amount as awarded due to which the recovery proceedings had to be initiated.

5. When the recovery proceedings were initiated against the appellant, he filed a writ petition in this Court, which was registered as WP (C) No. 4387/2000, which was disposed of by the Division Bench of this Court under order dated 9th May, 2003. It was recorded in the said letter that the appellant has to pay Rs. 2,77,785/-together with interest and another sum of Rs. 1,69,780/- towards the second loan. In the said order it was also recorded that the appellant would give a proposal to the bank within two weeks for repayment of the balance amount and the said proposal of the appellant would be sympathetically considered by the bank. In terms of the aforesaid order, a statement of account with the bank was duly shown to the appellant and it is stated that an endorsement was recorded by the appellant in the said account that the same is correct. A second civil writ petition came to be filed by the appellant, which was registered as WP(C) No. 9479/2004. The said writ petition was dismissed in limine. Thereafter, the appellant again filed a suit in the trial Court being suit No. 169/2004. The said suit was dismissed by the Civil Judge on 29th April, 2005. As against it, the appellant filed a revision petition being CM (Main) No. 114/20