CENTRAL BANK OF INDIA vs M/S VINTAGE FOODS & INDUSTRIES LTD on 5 March 2025

ORDER

1. This case is having a chequered history as the OA was originally disposed of as early as on 2.12.2004 by setting the Defendants exparte. The OA was originally disposed of quantifying the due amount as Rs.4,11,61,197/- with further interest from 2.12.2004 @ 17% with quarterly rest. The Defendant thereafter filed a petition to set-aside the ex parte order along with another petition to condone the delay. The Ld. Presiding Officer then stayed the proceedings notifying the sale of the mortgage properties on payment of Rs.16.7 Lakhs which was directed to be kept in no-lien account. On 31.8.2005 another application was filed seeking extension of the order staying the sale which was allowed with a direction to deposit Rs.2 crores in two months’ time. The said order was challenged before the Hon’ble High Court of Karnataka and during the proceedings therein a demand draft for Rs.4,50,09,712 was handed over and another DD for Rs.59,400/- was also remitted towards the settlement and the documents were returned.

2. The Hon’ble High court while disposing of the WP No.21313 of 2005 directed the bank to refund, if any.

3. The petition filed to set aside the ex parte final order was dismissed against which an appeal was preferred before the Hon’ble DRAT and the Hon’ble DRAT had disposed of the appeal recording the full payment and further observed that the appellant shall submit the account to the Respondent within one month as to the details of excess payments. The respondent shall return the excess payment within one month from the date of such notice, if there be any excess payment. The Defendant had filed another writ petition as WP No.46519 & 46522 of 2015 seeking an opportunity to contest the OA. The Writ petition was disposed of, setting aside the order of the Appellate Tribunal and directing this Tribunal to adjudicate as to whether any excess payment has been made by the borrowers. The Hon’ble High Court further permitted the parties to lead both documentary and oral evidence before this Tribunal.

4. Heard the counsel for both sides. The Ld. Counsel for the Defendant placing reliance as to the written statement they filed on 24.4.2017 [after the disposal of the writ petitions by the Hon’ble High Court] contends that by virtue of the orders of the Hon’ble High Court the final order passed in the OA on 02.12.2004 had been rendered redundant and this Tribunal is duty bound to allow the petitioner to reagitate the issue afresh on merits.

5. In this regard a reference as to the orders passed by the Hon’ble DRAT in MA No.175 of 2017 the Appeal wherein the bank had challenged the order of this Tribunal dated 3.4.2017 which was passed by this Tribunal virtually recalling the ex parte final order, is necessary as to decide what will be the scope of this enquiry. The Hon’ble DRAT allowed the Appeal setting aside the impugned order passed by this Tribunal on 03.04.2017 recalling the ex parte order dated 02.12.2004.

6. In view of the above, the present lis that is to be gone in to can only be in the light of final exparte order dated 2.12.2004 and there can be no question as to the reopening of the final order or revisiting the findings entered therein. The Ld. Counsel for the petitioner contended that the bank had claimed excess interest contrary to the dictum laid down by the Hon’ble Apex Court in “Central Bank of India vs. Ravindra and Others” 2001 AIR (SC) 3995 and various RBI notifications and contended that the interest charged and claimed in the OA is after capitalization of penal interest. However in view of the fact that this Tribunal cannot revisit the rate of interest to be applicable which is an issue already attained finality by the final order in OA dated 02.12.2004. The Hon’ble High Court of Karnataka had, at no point of time, directed reopening the issue nor there was any open remand at any point of time. Hence the issue as to any excess payment had to be gone into and considered in the light of the final order dated 02.12.2004.

7. The petitioner in their Written statement which is filed after the direction of the Hon’ble High Court of Karnataka had raised dispute as to inclusion of an amount of Rs.6,35,609 on 30.6.2001 and levying of interest @ 17% contenting that there was no agreement allowing 17% interest. The petitioner is also disputing the interest levied after NPA classification and amount claimed in lieu of Bank Guarantee and additional Bank guarantee, which the petitioner claims that the Bank had admitted the same as not invoked. The petitioner had also given a calculation of the due in their written statement.

8. On consideration of the above, this Tribunal is of the view that all these contentions raised in the written statement filed on 29.4.2017 pertains to issues which are already concluded by the final order dated 02.12.2004, which had already attained finality.

9. Now the question left to be decided is whether any excess remittances were made by the Defendant in excess of what had been allowed to be recovered by the final order dated 02.12.2004. The defendant had filed an evidence affidavit wherein also a contention is taken that the Bank guarantee, if invoked was without notice to them. This contention had no legal validity as the bank guarantee itself is an unequivocal promise given by the Bank on behalf of the party, which does not require any prior notice. Even otherwise, this issue cannot be go into in view of the fact that the final order is passed considering the claim based on invoked Bank guarantee also.

10. The petitioner is claiming that they had made the remittances totalling Rs.4,68,69,112/- during the period starting from 15.07.2005 to 01.10.2005. Now the question is, whether there is any excess payment against the Recovery Certificate is drawn allowing recovery of Rs.2,97,30,283/- with further interest @ 17% pa compounded quarterly from 27.12.2002, which was calculated at Rs.4,11,61,197 as on 02.12.2004 (Date of issuance of Recovery Certificate). Admittedly, the remittances were made by the petitioner from

15.7.2005 to 01.10.2005. On 15.7.2005, an amount of Rs.16,50,000/- was remitted. Even according to the petitioner, a substantial remittance of Rs.3,95,12,197/- was remitted only on 29.8.2005. The amount payable as on 15.07.2005 is Rs 4,56,74,957.83 and by calculating interest on balance due after adjusting the part remittances, it is evident that an amount of Rs.2,26,792.63 is collected by the Bank, in excess.

11. In the result, the Bank is directed to refund the amount of Rs.2,26,792.63p, which they collected in excess, to the petitioner as expeditiously as possible, at any rate, within a month from the date of receipt of copy of this Order. In view of the direction of the Hon’ble High Court, which does not permit any interest on excess, there will be no order as to interest and cost.

12. A copy of this order be communicated to the parties concerned. (Dictated to my PA directly on the Computer, corrected and pronounced by me in the open Court on this the 5th day of March 2025) Sd/- (T. RAJESH) PRESIDING OFFICER