V.K. MODI vs IFCI AND ORS on 15 September 2026

**DEBTS RECOVERY APPELLATE TRIBUNAL, DELHI**

**Misc. Application No. 105/2023**

**In**

**Misc. Appeal No. 356/2019**

**Arising out of OA No. 159/2001 (DRT-I, Delhi)**

**Item No. 22**

**V.K. Modi**

**V.**

**IFCI & others**

**15.09.2026 Hon'ble Dr. Justice Sudhir Kumar Jain**

**Present:** Ms. Jayshree Shukla Dasgupta along with Sh. Keshav Tejpal and Ms. Deepksha Pakhariya, Advocates for appellant Sh. Saransh Garg, Advocate for respondent no.3 through VC

This matter is taken up through Hybrid hearing.

**Misc. Application No.105/2023 (application for restoration of appeal)**

**1.** The instant application is filed for restoration of the present Misc. Appeal bearing No.356/2019 to its original number which was ordered to be dismissed in default vide order dated 23.02.2023.

**2.** The perusal of order dated 23.02.2023 reflects that the present Misc. Appeal No. 356/2019 was ordered to be dismissed in default due to none appearance on behalf of the appellant. Thereafter, the appellant filed Misc. Application bearing No. 105/2023 which was also ordered to be dismissed vide order dated 29.03.2023. However, the M.A. bearing No. 105/2023 was restored to its original number on the date i.e. 29.03.2023. None has appeared on behalf of respondent no.1 despite service. The respondent no.2 is stated to be under liquidation.

**3.** It is stated in the application that the present appeal was listed before this bench on 23.02.2023 for final arguments and the Counsel for the appellant has connected with the bench over his mobile phone but due to technical problem the Counsel for the appellant could not connect with the bench on 23.02.2023 when the appeal was called for hearing. The absence was neither deliberate nor intentional.

4. The present application is not objected by the Counsel for the respondent no.3. After considering all facts, the M.A. bearing No. 105/2023 is allowed and the present appeal bearing No. 356/2019 is restored to its original number.

**Misc. Appeal No. 356/2019**

5. The respondent no.1 IFCI filed O.A. bearing No. 159/2001 titled as **IFCI v. Modi Stone Limited& others**. The appellant being the defendant no.2 filed I.A. bearing No. 1236/2018 which was ordered to be dismissed vide impugned order dated 04.06.2019. The appellant being aggrieved filed the present appeal.

6. The impugned order dated 04.06.2019 reflects that the appellant being the defendant no. 2 on 27.11.2015 filed an I.A. bearing No. 1236/2015 for summoning the witness which was ordered to be dismissed vide order dated 08.07.2016.

7. Ms. Jayashree Shukla Dasgupta, Counsel for the appellant stated that the appellant also filed three applications bearing I.A. No. 96/2010, I.A. No. 393/2010 and I.A. No. 826/2010 before the DRT which were dismissed vide order dated 23.04.2015 passed by the DRT in O.A. bearing No. 159/2001 and order dated 13.08.2015 passed by the DRAT in Misc. Appeal No. 225/2015. The appellant being aggrieved filed Writ Petition bearing W.P. (C) No. 7877/2015 and the High Court of Delhi vide order dated 06.10.2015 has given the liberty to the appellant to make a fresh application before the DRT seeking relief to summon the witness and DRT to decide the application in accordance with law.

8. The appellant thereafter filed I.A. bearing No. 1236/2015 for summoning of the witnesses which was dismissed vide order dated 08.07.2016. Thereafter, the appellant filed Misc. Appeal bearing No. 391/2016 before this Tribunal which was decided vide order dated 05.10.2016. This Tribunal in the order dated 05.10.2016 opined that till the amendment application filed by the appellant for incorporating factum of One Time Settlement for closure of account settle by the appellant on payment of Rs.1.00 crore is disposed of till then the application bearing I.A. No. 1236/2015 cannot be decided. It is further observed that if the said fact is permitted to be introduced in the written statement filed by the appellant being the defendant no.2 then the respondent no.1 IFCI would have chance to response to the said plea regarding settlement and it was further observed that if the respondent no.1 refuted the factum of settlement, the question of the appellant to establish the fact of One Time Settlement of Rs. 1.00 crore would be addressed by way of evidence.

9. Ms. Jayashree Shukla Dasgupta, Counsel stated that the amendment application was filed and was accordingly allowed but the respondent no.1 in the rejoinder has denied the factum of One Time Settlement for Rs. 1.00 crore. Ms. Jayashree during the course of argument has referred a letter dated 19.05.2009 issued by the respondent no.2 to respondent no.1 regarding the release of title deed of Modipuram property as well as personal guarantee of V.K. Modi. Perusal of letter dated 19.05.2009 reflects that a sum of Rs. 1.00 crore was given to the respondent no.1 and request was made for issuance of No Dues Certificate. Thereafter, the respondent has written a letter on 19.05.2009, wherein the respondent no.1 has confirmed and acknowledged the receipt of two cheques total amounting to Rs. 1.00 crore and further intimated to the appellant that the No Dues Certificate would be issued after approval of the competent authority. Thereafter, respondent no.1 vide letter dated 15.06.2009 intimated the appellant that a balance sum of Rs.1.00 crore is to be made before release of the personal guarantee of the appellant. It is further conveyed to the appellant that the competent authority has approved the proposal for release the personal guarantee of the appellant for the credit facility extended to the respondent no.2 on payment of a sum of Rs.2.00 crores only.

10. The perusal of impugned order reflects that the DRT-I, Delhi has observed and referred the letter dated 15.06.2009 issued by the respondent no.1 that the competent authority has approved the proposal of release of the personal guarantee of the appellant on the payment of Rs.2.00 crores and the appellant has only deposited a sum of Rs.1.00 crore as mentioned herein above. It was further observed that the appellant has not deposited the entire settlement amount and due to this reason, the respondent no.1 has revoked the settlement vide letter dated 12.09.2009. The relevant portion of the order dated 04.06.2019 is reproduced as under:

The letter dated 15.06.2009 issued by the IFCI reveals that Competent Authority has approved the proposal for release of personal guarantee of defendant no.2 on payment of a sum of Rs. 2.00 crores. The defendant no.2 has admittedly not deposited the entire amount and only a sum of Rs. 1.00 crore was deposited. Since the defendant no. 2 has not deposited the entire settlement amount, the applicant FI revoked the settlement vide letter dated 12.11.2009. The entire communication relating to the settlement has been placed on record by the defendant no. 2 himself. Therefore, there is no need for examination of bank witnesses who were privy to the settlement between the parties. The applicant FI's decision for conveying the settlement for Rs. 2.00 crores is dated 15.06.2009 never objected on letter dated 15.06.2009 nor taken any further steps for settlement in furtherance to letter dated 15.06.2009.

DRT-I, Delhi has accordingly, dismissed the I.A. bearing No. 1587/2018.

11. Ms. Jayashree Shukla Dasgupta, Counsel for the appellant has argued that as the respondent no.1 has accepted the payment of Rs.1.00 crore in terms of letter dated 19.05.2009 issued by Modi Rubber Limited as reflected from letter dated 19.05.2009 issued by respondent no.1, the personal guarantee of the appellant stands discharged for a sum of Rs.1.00 crore. In support of her contention, Ms. Jayashree has cited the following judgements:

- (i) (2006) 5 Supreme Court Cases 311 **Bhagwati Prasad Pawan Kumar v. Union of India** in Civil Appeals No. 150-51 of 2011 decided on May 25, 2006;

- (ii) 674 The Indian Law reports, Vol. XLIX, Appellate Civil, **Gaddar Mal v. The Tata Industrial Bank Limited, Bombay** decided on 28.02.1927;

- (iii) (1954) 5 STC 28 : 1953 SCC OnLine Pat 67: AIR 1954 Pat 14, **The State of Bihar v. Bengal Chemical and Pharmaceutical Works Limited** in Miscellaneous Judicial Case No. 232 of 1951 decided on May 8, 1953;

- (iv) (2017) 16 Supreme Court Cases 757 **Suresh Kumar Wadhwa v. State of Madhya Pradesh and others** in Civil Appeal o. 7665 of 2009 decided on October 25, 2017;

- (v) RFA (Comm) 132/2024 M/s **B.S. Enviro N Infracon Private Limited v. Vij Contracts Private Limited** decided on 17.10.2025;

- (vi) (2017) 16 Supreme Court Cases 757, **Suresh Kumar Wadhwa v. State of Madhya Pradesh and others** in Civil Appeal No. 7665 of 2009, decided on October 25, 2017

12. The arguments as advanced by Ms. Jayashree Shukla Dasgupta are appearing to be misconceived in the light of letter dated 19.05.2009 as referred herein above, whereby the competent authority of respondent no.1 has approved the proposal for release of the personal guarantee of appellant on payment of a sum of Rs.2.00 crore while appellant has paid only Rs.1.00 crore to the respondent no.1. The DRT-I, Delhi in the impugned order has rightly observed that since appellant has not deposited the entire settlement amount and the respondent no.1 has revoked the settlement vide letter dated 12.09.2009 as such the present application was ordered to be dismissed. DRT-I, Delhi also observed that the OA shall be decided on the basis of documents which were available on record. There is no infirmity or illegality in the impugned order which warrants any interference by this Tribunal. Hence, the appeal is dismissed. However, it is made clear that all the pleas and contentions which the appellant has taken in the application bearing No. 1528/2019 shall be open during the trial of O.A. bearing No.159/2001.

\_\_\_\_\_ **(Dr. Justice Sudhir Kumar Jain)** **Chairperson**

-N