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CASE NO.:

Appeal (civil) 82 of 2008

PETITIONER:

Oriental Bank of Commerce

RESPONDENT:

Sunder Lal Jain & Anr.

DATE OF JUDGMENT: 08/01/2008

BENCH:

G.P. Mathur & Aftab Alam

JUDGMENT:

J U D G M E N T

(Arising out of Special Leave Petition (Civil) No.882 of 2006)

G. P. MATHUR, J.

1. Leave granted.

2. This appeal, by special leave, has been preferred against the

judgment and order dated 17.8.2005 of Delhi High Court, by which a

direction was issued to the appellant Oriental Bank of Commerce to

declare the respondents\022 account as Non-Performing Asset (NPA)

from 31st March, 2000 and to apply the Reserve Bank of India

Guidelines to their case and communicate the outstandings which

shall be recoverable by quarterly instalments over a period of two

years.

3. The respondents Sunder Lal Jain & another were sanctioned

credit facility for Rs.20 lakhs on 12.12.1996. The respondent

defaulted in repayment of the amount and their account was declared

as NPA on 31.3.2001. On 21.2.2002, the appellant Oriental Bank of

Commerce filed a petition against the respondents being O.A. No.21

of 2002 before the Debt Recovery Tribunal-III, Delhi (for short \021the

DRT\022). The DRT passed a decree in favour of the appellant for

recovery of Rs.20,27,862/- along with interest on 14.11.2003. The

appellant initiated execution proceedings for recovery of the amount

from the respondents and a recovery certificate was issued on

8.12.2003. The respondents did not file any appeal challenging the

decree passed by the DRT. Instead, the respondents filed WP(C)

No.559 of 2005 and WP(C) No.560 of 2004 before Delhi High Court

praying that a direction be issued to the appellant, Oriental Bank of

Commerce, to declare their account as NPA from 31.3.2000 and apply

RBI Guidelines for reconciliation and settling the accounts with them.

The petitions were disposed of by a short order on 17.8.2005 which

reads as under :-

\023The petitioners have a remedy available to them

of filing an appeal against the recovery proceedings to

the DRT which remedy has not been taken and for which

this petition is liable to be rejected. However, since this

petition has been pending for quite some time before this

Court and the first Respondent has agreed to consider

declaring the account as NPA from 31st March, 2000,

there is no impediment in disposing of this petition by the

following order :

First Respondent-Bank is directed to declare the

Petitioner\022s account as NPA from 31st March, 2000 and

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apply the RBI guidelines to their case and then to

communicate the outstandings, which shall be

recoverable by quarterly instalments over a period of two

years.

In case, this course works out and Petitioners after

reconciling their accounts do not commit any default, the

execution proceedings against them pending before the

Recovery Officer shall be stayed and the recovery

certificate passed against them shall stand cancelled.

However, in case of default it shall be open to the first

Respondent-Bank to activate the recovery proceedings

against them. In that event, it shall be open to the

Petitioners to take any appropriate remedy, which they

may have against the recovery certificate or its execution

in law.\024

Feeling aggrieved by the above noted order, the appellant,

Oriental Bank of Commerce, has preferred this appeal.

4. Learned counsel for the appellant has submitted that the bank

had filed a suit for recovery of the amount and the same had been

decreed on 14.11.2003 and thereafter a recovery certificate had also

been issued on 8.12.2003 in the execution proceedings initiated by the

appellant. The respondents did not file any appeal to challenge the

decree passed by the DRT and, therefore, the same attained finality.

In these circumstances, the