2021 Supreme(P&H) 914

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Jaswant Singh, Harinder Singh Sidhu, JJ.
M/s. Hari Kewal Pvt. Limited - Appellant
Versus
Debts Recovery Appellate Tribunal - Respondent
RA-CW No. 267 of 2020 (O&M) in CWP No. 2930 of 2019
Decided On : 26-03-2021

The amount deposited by the petitioner during the pendency of the writ petition with a view of show his bonafide to enter into a settlement was required to be returned to the borrower in the event of the petition being dismissed and the settlement offer not being accepted.

Headnote:

SARFAESI ACT - SECTION 13(2) - SECTION 13(4) - SECTION 14 - SECTION 171 - CONTRACT ACT - SECTION 148 - OTS POLICY - GENERAL LIEN - ACTUS CURIAE NEMINEM GRAVABIT - REVIEW APPLICATION - REFUND OF DEPOSITS - Held that the amount deposited by the petitioner during the pendency of the writ petition with a view of show his bonafide to enter into a settlement was required to be returned to the borrower in the event of the petition being dismissed and the settlement offer not being accepted.

Fact of the Case:

The petitioner company availed a Cash Credit Limit of Rs.6 Crores from the respondent Bank and also availed of a Term Loan of Rs.65 lakhs. On account of the default of the petitioner in keeping with the re-payment schedule, the account of the petitioner was declared as NPA on 31.07.2009. The Bank initiated action under the SARFAESI Act, 2002 (for short "the 2002 Act") and issued Demand Notice dated 01.09.2009 under Section 13 (2) of the 2002 Act claiming a total sum of Rs.7,64,76,821.68 as on that date. The request of the petitioner to regularize that amount was not accepted. Ultimately, the Bank issued notice dated 29.01.2010 under Section 13 (4) of the 2002 Act for taking symbolic possession of the properties against which the petitioner filed SA No. 197 of 2010. The same was dismissed on 19.12.2014 by Debts Recovery Tribunal-II (DRT-II), Chandigarh. The appeal filed by the petitioner before the Debts Recovery Appellate Tribunal, Delhi, was dismissed vide order dated 18.09.2015 for its failure to comply with the requirement of pre-deposit and hence held not maintainable. The petitioner filed CWP No.23767 of 2015 assailing the order of the Tribunal and the Appellate Tribunal, which was withdrawn on 22.05.2017 with liberty to the petitioner to approach the Bank for amicable settlement. On 02.01.2018 the petitioner submitted a proposal for One Time Settlement offering to pay 50% of the NPA amount. Before any decision was taken on his proposal the Bank obtained order dated 12.07.2018 from the District Magistrate under Section 14 of the 2002 Act to take physical possession of the mortgaged properties.

Finding of the Court:

The Court held that the amount deposited by the petitioner during the pendency of the writ petition with a view of show his bonafide to enter into a settlement was required to be returned to the borrower in the event of the petition being dismissed and the settlement offer not being accepted. The Court also held that the bank did not have the right to exercise general lien upon such deposits as the amounts of deposits received by the bank were definitely not in the ordinary course of business but were only under the interim orders of this Court.

Issues: Whether the amount deposited by the petitioner during the pendency of the writ petition with a view of show his bonafide to enter into a settlement was required to be returned to the borrower in the event of the petition being dismissed and the settlement offer not being accepted.

Ratio Decidendi: The Court relied on the following principles to arrive at its decision: * The principle of actus curiae neminem gravabit, which means that an act of the court shall prejudice no man. * The principle that a person cannot be penalised for no fault of his and the act of the court would cause no prejudice to any of his rights. * The principle that the amount deposited by the petitioner during the pendency of the writ petition with a view of show his bonafide to enter into a settlement was required to be returned to the borrower in the event of the petition being dismissed and the settlement offer not being accepted.

Final Decision: The Court allowed the review application and directed the respondent-Bank to return the amount deposited by the petitioner under the interim orders of this Court amounting to Rs. 2.40 Crore within four (04) weeks from the date of receipt of certified copy of the order, failing which the petitioner shall be entitled to interest @ 9 % p.a. from the date of deposit till the date of refund, and the bank shall be entitled to recover the same from the official concerned, responsible for delay.