VIPIN SANGHI, J.

C.M. No. 10584/2019

1. We have heard learned counsel for the petitioner. For the reasons stated in the application and the explanation furnished, we waive of the costs imposed upon the petitioner vide our order dated 14.02.2019 both in the W.P. (C) No. 2220/2016 & W.P. (C) No. 10998/2016.

W.P. (C) 2220/2016

The petitioner has assailed the order dated 04.11.2015, passed by the Debts Recovery Appellate Tribunal (DRAT), Delhi in Appeal No. 332/2015, arising out of O.A. No. 79/2005 (Delhi-I). By the impugned order the Appellate Tribunal has rejected the said appeal preferred by the petitioner bank.

2. The petitioner had preferred the said appeal to raise a challenge to the final order dated 19.08.2015 passed by the Debts Recovery Tribunal (DRT) I, Delhi in O.A. No. 79/2005, titled State Bank of Patiala vs. GABS (Group Apparel Business Service) with two others. The same is referred to as the final order.

3. We may observe that the final order relates to two Original Applications preferred by the petitioner bank, the other being O.A. No. 59/2005. O.A. No. 59/2005 had been preferred in respect of a home loan granted by the petitioner bank to the defendants in the said Original Application. We are, however, not concerned with the operative directions issued in O.A. No. 59/2005.

4. The DRT, while passing the final order in O.A. No. 79/2005 had allowed the claim of the petitioner bank for the amount of Rs. 29,24,947/- together with pendentelite and future interest @ 9% p.a. simple interest in respect of the Export Packing Credit Limit and a sum of Rs. 68,330.77 together with pendentelite and future interest @ 12% per annum simple till the date of realization.

5. The limited challenge raised by the petitioner before the DRAT was to the award of simple, as opposed to Compound interest, compounded with monthly rests, in terms of clause 14 of the Loan Agreement executed by the petitioner bank with the defendants/ respondents on 01.10.2002 in respect of the Export Packing Credit Facility.

6. The DRAT, while dismissing the aforesaid appeal, by a short three page order has observed that the findings returned by the DRT are based on documentary evidence and are reasonable, just and fair and, therefore, do not call for interference.

7. The submission of learned counsel for the petitioner is that the Agreement of Loan for Overall Limit dated 01.10.2002, for an agreed sum of Rs. 25 lakhs, specifically provided in Clause 14 that interest shall be charged on the outstandings in the accounts opened in respect credit facilities at such rates, as may be determined by the Bank from time to time at the Bank's sole discretion on the basis of any internal credit rating accorded to the borrower or otherwise, provided that the rates shall be subject to changes in the State Bank Advance Rate and/or changes in interest rates prescribed by the Reserve Bank of India from time to time.

8. Counsel for the petitioner points out that while passing its order, the DRT has extracted the first part of Clause 14 of the said Loan Agreement in the impugned order itself. However, the Tribunal omitted to read the later part of the said Clause which, inter alia, specifically provides that "interest shall be calculated respectively on the daily balance of such accounts and be debited thereto on the last working day of the month or quarter according to the practice of the Bank."

9. Learned counsel submits that on account of the said omission, the DRT, while passing the final order, returned a patently incorrect finding in paragraph 19 of the order that "in the entire loan documents, there is not a single whisper about the charging of interest at monthly rests nor it has been mentioned that interest has to be charged monthly, quarterly or half yearly." It is on that premise that the Tribunal went on to observe that it was "of the considered view that the charging of monthly rests by the bank is totally illegal and without any contract between the parties."

10. Lear