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27.02.2023

IA 8710/2022

1.

Having perused the contents of the plaint and the application, the

plaintiffs are granted exemption from instituting pre-litigation

mediation.

CS(COMM) 372/2022

2.

Issue summons.

3.

Summons are accepted by Ms.Usha Singh, the learned counsel

for the defendant.

4.

Let written statement be filed within the statutory period. Along

with the written statement, the defendant shall also file the

affidavit of admission/denial of the documents of the plaintiff,

without which the written statement shall not be taken on record.

5. Liberty is given to the plaintiff to file the replication within the

statutory period of the receipt of the written statement. Along

with the replication, if any, filed by the plaintiff, the affidavit of

admission/denial of documents of the defendant be filed by the

plaintiffs, without which the replication shall not be taken on

This is a digitally signed order.

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record.

6.

If any of the parties wish to seek inspection of any documents,

the same shall be sought and given within the timelines.

7.

List before the learned Joint Registrar (Judicial) on 11^th July,

2023.

I.A. 8709/2022

8.

Issue notice.

9.

Notice is accepted by Ms.Usha Singh, learned counsel for the

defendant.

10. Let reply be filed within a period of four weeks. Rejoinder

thereto, if any, be filed within a period of four weeks thereafter.

11. It is the case of the plaintiffs that in terms of the documents of

loan, the defendant is to charge 17% floating rate of interest over

the tenure of the facility from the plaintiffs. In addition thereto,

on overdue charges/default, the defendant claims interest at 3%

per month compounded monthly on the outstanding / unpaid

amount.

12.

Drawing reference to the notice dated 28.07.2020 issued by the

defendant under the Securitization and Reconstruction of

Financial Assets and Enforcement of Security Interest Act, 2002

(hereinafter referred to as ‘SARFAESI Act’), the learned senior

counsel for the plaintiffs submits that the defendant had claimed

an amount of Rs.5,67,86,328.56 as due from the plaintiffs as on

09.03.2020. Thereafter, the property of the plaintiffs that was

given as a collateral security to the defendant, was sold by the

defendant for an amount of approximately Rs.6,80,00,000/-. In

spite of the same and only on account of penal interest being

charged by the defendant, the defendant is still showing an

amount of Rs.1,64,23,564.33/- as outstanding from the plaintiffs.

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

The Order is downloaded from the DHC Server on 29/01/2024 at 09:02:42

13. Placing reliance on the judgment of the Constitution Bench of the

Supreme Court in Central Bank of India v. Ravindra and Ors.,

(2002) 1 SCC 367, the learned senior counsel for the plaintiffs

submits that though the Supreme Court upheld the practice of

charging interest on quarterly rests and its capitalisation, it was

held that ‘penal interest’ cannot be capitalized; it was further

observed that the compounding of interest may also not be

allowed for charging interest on monthly rests.

14. He submits that in the present case, it is only on account of penal

interest being charged on monthly rests that in spite of the sale of

the collateral property of the plaintiffs, the defendant Bank is still

demanding money from the plaintiffs.

15. On the question of maintainability of the present suit, the learned

senior counsel for the plaintiffs has submitted that the plaintiff

has filed an affidavit dated 24.02.2023 in compliance with the

order dated 15.12.2022 of this Court. In the said affidavit, it has

been stated that the plaintiffs have not only withdrawn their

prayer against the defendant Bank in WP(C) no.21