The central legal point established in the judgment is the importance of parties' willingness to settle and the court's direction to carry out the terms of settlement.

The litigation commenced by the State Bank of India, successor-in-interest of Bank of Cochin Ltd., in 1992, is coming to an end today, on account of the realization of pious obligation by the legal representatives of the original borrower and their earnest desire not to brand their predecessor-in-interest as a “chronic defaulter” and most importantly to purchase peace.

The background facts:-

2. The predecessor-in-interest of petitioners 2 to 4 availed credit facilities from the then Bank of Cochin Ltd. for his small scale industry carried on in the name and style of P.N. Engineering company, at Valsaravakkam, Chennai. The Bank of Cochin Ltd. was subsequently amalgamated with State Bank of India.

3. The State Bank of India, filed a suit against P.N. Engineering Company, represented by its Proprietor before the Sub Court, Poonamalee, on 21 September 1992, claiming a sum of Rs.89,78,045/- with contractual interest. The plaint was returned for compliance of certain defects. The order passed by the Debts Recovery Tribunal indicates that the Bank could not comply with the defects till 1997. Finally, the Sub Court, Poonamallee, returned the plaint for presentation before the Debts Recovery Tribunal (DRT). The plaint was accordingly presented before DRT I, Chennai.

4. The D.R.T I, Chennai, by order dated 28 August 2001 in O.A.No.584 of 1997, issued a recovery certificate to the SBI for a sum of Rs.89,78,045 with interest. In view of the delay caused by the Bank, pendente lite interest was reduced to 6% simple interest per annum.

5. The Bank filed appeal before the Debts Recovery Appellate Tribunal (D.R.A.T.) in R.A.No.20 of 2001, challenging the order passed by the D.R.T. in O.A.No.584 of 1997. The Debts Recovery Appellate Tribunal allowed the appeal and modified the rate of interest. The order dated 30 August 2005 in R.A.No.20 of 2001 is under challenge in this civil revision petition.

6. When the civil revision petition came up for admission, this Court found that the D.R.T. has given cogent reasons for awarding simple interest at 6%. However, without considering the legality and correctness of the finding given by DRT with regard to interest, DRAT modified the direction. Therefore, interim order was granted by this Court staying the order dated 30 August 2005 in R.A.No.20 of 2001.

7. The civil revision petition is posted before me pursuant to the order passed by the Hon'ble Chief Justice.

8. When this civil revision petition came up for hearing on an earlier occasion, the learned counsel for the petitioners submitted that the legal representatives of the borrower are prepared to settle the matter. According to the learned counsel, the petitioners have been taking up the matter with the Bank right from 2004 for settlement. However, there was no follow up action taken by the Bank. In view of the said submission, I have directed the petitioners to submit a fresh proposal to the Bank for settlement.

9. The proposal given by the petitioners was considered by the Bank and after negotiation the matter was settled once for all.

10. The petitioners and the Bank filed a joint compromise memo dated 25 April 2017 the contents of which is extracted below :

“It is respectfully submitted that pending the above CRP proceedings, the petitioners have submitted a letter on 22.04.2017 offering to pay Rs.2,50,00,000/- in full and final settlement of the dues to the respondent Bank, which has been considered by the competent authorities of the respondent and accepted the said offer subject to the condition that the aforesaid amount of Rs.2.50 crores shall be paid on or before 28.04.2017 to the Bank as full and final settlement failing which, the petitioners shall pay the entire amount due to the respondent Bank as prayed for before the Hon'ble Debts Recovery Tribunal, Chennai, with interest, cost and expenses.

It is further respectfully submitted that upon payment of the aforesaid amount by the petitioners, the respondent Bank shall withdraw the OA proceedin