ICICI BANK LIMITED vs RAREFIELD ENGINEERS P LTD on 13 November 2026

:- FINAL ORDER -:

1. The present Appeal has been filed praying to set aside the Order dated 21.03.2024 in Sr. No.16372 of 2023 in TRC No.223 of 2022 passed by the Ld. Recovery Officer, DRT-III, Chennai.

2. Facts of the case: 2.1 It is the case of the Appellant that the Appellant herein is a Banking Company within the meaning of the Banking Regulations Act, 1949 which is also the certificate holder in the Debt Recovery Certificate that has been issued in the present matter vide DRC No. 259 of 2018. The 1st Respondent Company being the borrower herein had availed Cash Credit facility in the form of Working Capital for a sum of Rs.2.5 crores for their company. The 1st Respondent company had started defaulting in honouring its repayments and hence the Appellant was constrained to initiate legal proceedings before this Tribunal and O.A. No. 500 of 2016 was filed for recovery of the monies lent by them. The said OA was allowed vide final order passed by this Tribunal dated 21.03.2018 and subsequently, DRC No.259 of 2018was also issued on 08.06.2018. 2.2 The final order dated 21.03.2018 was challenged by the 1st Respondent in RA No. 157 of 2018 before Hon’ble DRAT contending that the Petitioner ought to have credited a sum of Rs. 2,41,79,686/- in addition to the amount of Rs. 1,59,93,936.89p which was credited on 10.09.2012 to the loan amount. The Hon’ble DRAT, after hearing the arguments had rejected the plea of the 1st Respondent, however had allowed the Original Application with lesser rate of interest. 2.3 It is submitted by the Appellant that the 1st Respondent, on one hand had agreed with the Appellant to settle the matter under one settlement and on other hand filed appeal before the Hon’ble DRAT. The appeal came to be partly allowed by reducing the rate of interest from 12% to 11%, however the Hon’ble DRAT had rejected the other defence and confirmed the final order of this Tribunal. 2.4 The Appellant submitted that the final order dated 21.03.2018 passed by this Tribunal in O.A. No. 500 of 2016 and DRC No. 259 of 2019 dated 16.10.2019 and RA No. 157 of 2018 may be treated as part and parcel of the present Appeal. It is further submitted that pursuant to the issuance of the above mentioned DRC, the recovery process was initiated and is pending before the file of the Ld. Recovery Officer, DRT – III, Chennai. 2.5 In the meanwhile, the Respondents herein had filed TMA No. 02/2023 before this Tribunal, submitting therein that the applicants were willing to make any further payments if found due. However, vide order of this Tribunal dated 07.09.2023, the said application was dismissed as withdrawn. 2.6 It is submitted that pursuant to the aforementioned order, the Respondent herein had taken out another application vide IA No. 95 of 2023 in T.R.C. No. 223 of 2022 wherein they had sought for a relief to fix the due loan amount and the same was also dismissed. Thus, it can be seen from the above that the Respondent has consistent record of filing frivolous applications which have been dismissed on the ground of maintainability itself. It is further submitted that one common ground that was raised by the Respondents in all these applications was that according to them, they have made the full payments pursuant to order in RA No. 187 of 2018.

However, this aspect has always been controverted by the Appellants since even after taking into consideration of the payments made by the Respondent, the Respondents still owe money to the Appellant in terms of the DRC issued in the instant case. Therefore, in this view, the request for return made by the Respondents cannot be entertained. 2.7 With this being the admitted facts on record, the Ld. Recovery Officer has passed an order in SR No. 16372/2023 on 21.03.2024. On perusal of the first para of the impugned order, it is evident that the prayer sought by the Respondent was to fix the due loan amount. It is to be noted that the same petition came to be dismissed by the Ld. Recovery Officer on 20.12.2023. However, despite the said order of dismissal, the Ld. Recovery Officer has passed an order in a petition for similar relief which goes against the principles of res judicata. Even assuming otherwise, the previous order was predicated on the fact that the Ld. Recovery Officer cannot countenance any indirect attempt for amendment of DRC in view of Section 26 of the RDB Act, 1993. 2.8 Despite the fact that the Ld. Recovery Officer had dismissed the earlier petition filed by the Respondents as not being maintainable, through the impugned order, it has now been held that the Certificate Debtor i.e. the Respondents herein have allegedly serviced the debts in its entirety to the Appellant herein. The impugned order proceeds on the premise that the finding given in the so-called audit opinion to the effect that repayments made by the 1st Respondent company should be appropriated towards principal first and then towards interest is correct. In this regard, the order has completely failed to consider the statement of objections filed by the bank wherein we had objected vehemently on the very permissibility of undertaking such a course of action. This issue has been ignored and not answered in the impugned order. The reliance placed on the so-called Audit opinion suffers from the patent jurisdictional defect as the Ld. Recovery Officer would merely be seeking to decide an issue indirectly while not in power to do so directly. 2.9 The Appellant, in its statement of objections, had clearly asserted that what was determined in the DRT final decree was only the quantum of amount that was liable to be paid by the borrower and not the method of appropriation. This has also not been taken into consideration in the RO’s order. The Appellant had filed a detailed statement of account which clearly showed what is the latest outstanding that is liable to be paid by the 1st Respondent Company. In response to this, the borrower did not file any response controverting the correctness of the statement of account. Yet, the latest statement of account filed by the appellant has been completely overlooked. 2.10 The Ld. Recovery Officer further has no jurisdiction under the RDB Act, 1993 to pass an order on the said application, in as much as the course of action adopted by the Ld. Recovery Officer is patently illegal and runs contrary to the order. Hence, the Ld. Recovery Officer ought to have rejected the impugned application as not being maintainable. In the event if it were to be held that the said relief cannot be entertained, the Appellant would be remediless in as much as there would be no forum before which they can seek the said relief. Thus, severe prejudice and harm would accrue to the Appellant in case the present Appeal is not entertained, whereas, no harm or prejudice would occasion to the Respondents if the present Appeal is entertained. It is further submitted that the relief claimed for in the present Appeal is imminent and that the Respondent is a habitual defaulter and has been evading its payment obligations to the Appellant for the last many years and there is a statement of account which also prima facie establishes this fact. Considering the aforementioned, it becomes just and necessary that suitable orders be passed in favour of the Appellant against the Respondent. 2.11 The appellant in the Grounds of Appeal had raised the following grounds:

(i) the impugned order proceeds on the premise that the finding given in the so-called audit opinion to the effect that repayments made by the borrower should be appropriated towards principal first and then towards interest is correct. In this regard, the order has completely ignored the statement of objections filed by the bank wherein we had objected vehemently on the very permissibility of undertaking such a course of action. This issue has been ignored and not answered in the impugned order. The very jurisdiction of the Ld. RO to suo motu seek for such audit opinion is in question and this will be one of the primary grounds which we can urge in our appeal before the Hon’ble PO.

(ii) the Appellant, in its statement of objections, had clearly asserted that what was determined in the DRT final decree was only the quantum of amount that was liable to be paid by the borrower and not the method of appropriation. This has also not been taken into consideration in the impugned order.

(iii) The appealing had filed a detailed statement of account which clearly shows the latest outstanding that is liable to be paid by the borrower. In response to this, the borrower did not file any response controverting the correctness of our statement of account. Yet, the Appellant’s latest statement of account has been completely junked.

(iv) The Recovery Officer ought to have taken into consideration the fact that the Respondents before it are chronic defaulters who have remained steadfast in exhibiting evasive conduct towards their financial commitment. Hence the appellant prayed for setting aside the order of the Recovery Officer.

3. Counter of respondents: 3.1 The respondents filed counter denying the allegations in the appeal, except those that are expressly admitted therein, as false. It is submitted that this appeal is not maintainable in law as it has been filed after the

expiry of 30 days time limit from the date of the issue of the impugned order dated 21.03.2024 in S.R. No.16372 of 2023 by Ld. Recovery Officer. The impugned order is shown to have been acknowledged/issued to the Appellant on the 21st March, 2024 itself. The appeal should have been filed latest by 22.04.2024 (21st being a Sunday which is the 30th day). However, it is learnt on verification that the appeal was filed only on 29.04.2024. The Limitation para IV of the appeal paper book is bereft of any material factual details regarding the above mentioned particulars which amounts to suppression of facts. It is not discernible as to how the Registry has numbered the appeal in the background of the available facts set out above. The appeal is therefore incontrovertibly not maintainable in law. It is therefore prayed that the appeal may be dismissed in limine forthwith with cost. 3.2 It is further contended that the entire decretal amount of Rs.3,66,32,594/- had been realised by the Appellant Bank as early as in May, 2022. Despite full discharge of the liability, the Bank had failed to return the original title deeds and continued to raise untenable claims of further outstanding dues substantiation. 3.3 The respondents have narrated the following facts for the purpose of factual appreciation:

(i) A decree dated 21.8.2018 for a sum of Rs.3,09,64,416.36 with simple interest at 12% per annum was passed with the mandate of giving credit for Rs.1.95 crores realised prior to the date of decree.

(ii) DRC

was drawn on 8.6.2018 for sum of Rs.1,42,20,383.25 following a procedure. It was not challenged.

(iii) Payments of Rs.50,86,200/- in total towards the outstanding amount were made till 30.3.2019 at interest at 12% p.a.

(iv) Order dated 15.4.2019 in R.A. No.157 of 2018 before Hon’ble DRAT reducing the rate of simple interest at 11% per annum was passed. However, no redrawn recovery certificate was made in terms of the order in R.A. reducing interest at 11% p.a.

(v) As per the details appearing in the statement of account annexed to this counter, a total sum of Rs.3,66,32,594 was paid from December, 2016 to May, 2022 which fulfils the requirement as per the order of DRT-II and DRAT, Chennai. 3.4 In the above circumstances, Respondents requested for return of original title deeds pertaining to the two secured assets in residential properties in Chennai and one in Kanyakumari, by letter and e-mails. There was no reply from the Appellant to any of the letters for withholding the title deeds. For the first time in the proceeding appellant is raising a contention of further pending dues contrary to law and facts. The only substantive ground on the facts raised is that the method of appropriating payment cannot be decided by Recovery Officer. The Respondents submitted that appropriation of the payments is only a matter of giving effect to the Tribunal's order, which provides for simple interest at 11% per annum on Rs.1,42,20,383.25, being the amount determined under DRC No.259 of 2018 issued in June 2018. 3.5 When dispute was raised first by the Respondents before this Court in T.M.A.2 of 2023 in T.A.1675 of 2023, the maintainability was questioned by this forum and directed Respondents to approach Recovery Officer by withdrawing the TMA vide order dated 07.09.2023. It is thus under the impugned order after determining that the entire amount due has been fully paid as per the recovery procedures, Recovery Officer has directed the Appellant to return the title deeds of the security assets. 3.6 The Appellants further contend that taking advantage of incident of not redrawing the recovery certificate in terms of order dated 15.04.2019 in R.A. No.157 of 2018, Appellant is raising trivial objections of competency and maintainability of the proceeding before the Recovery Officer and the correctness of the impugned order. Appellant refuses to apply simple interest calculation at 11% per annum as ordered by this tribunal and modified by Hon’ble DRAT. 3.7 The Respondents contended that the Appellant's objection to the audit process is untenable, as it had participated in the audit without objection. They further submitted that the method of appropriation is integral to the decree and that the Appellant had never challenged DRC No.259 of 2018, which determined the liability at Rs.1,42,20,383.25p, but had accepted subsequent payments made towards the same.

3.8 It is submitted that the appellant consented to the appointment of neutral auditors who analyzed the statements of account of both the appellant and the Respondent in the light of orders of DRT and DRAT. The conduct of the appellant is contumacious causing grave and irreparable loss and mental agony to the respondents. Appellant has positive duty on them to return the original title deeds in their possession as soon as the realisation of entire liability. Any default with civil consequences to Respondents makes them liable for damages of every nature. Without prejudice to that it is also pertinent to point out that as per Reserve Bank of India circular RBI/2023-24/60, DoR.MCS.REC.38/01.01.001/2023-24 dated 13.09.2023, Appellant is liable to pay at Rs.5000/- per day of delay after the expiry 30 days from the date of full repayment. Thus submitting, the respondents prayed for dismissing the Appeal with costs.

Heard both sides and perused the records of the case. 4.1 The Respondents have raised a preliminary objection regarding limitation, contending that the appeal filed on 29.04.2024 is beyond the prescribed period. However, on perusal of the records, particularly the e- filing details, it is evident that the appeal was e-filed on 21.04.2024 and the physical copy was presented before this Tribunal on 29.04.2024. Since 21.04.2024 fell on a Sunday, the physical copy was filed within seven days from 22.04.2024. Hence, both the e-filing and physical filing are within the prescribed period, and the objection regarding limitation raised by the

Respondents is devoid of merit. Accordingly, this point is answered in favour of the Appellant. 4.2 With regard to the further contentions, admittedly, the Recovery Certificate was issued pursuant to the final order passed in O.A. No.500 of 2016 and the rate of interest was subsequently modified from 12% to 11% per annum by the order of Hon'ble DRAT in R.A. No.157 of 2018 dated 15.04.2019. The substantial payments made by the respondents towards the decretal liability is not in dispute. The dispute between the parties essentially relates to the manner in which the payments made by the Certificate Debtors are required to be appropriated and whether, after giving due credit to such payments in accordance with the Orders passed by this Tribunal and the Hon'ble DRAT, any further amount remains payable under the Recovery Certificate. 4.3 The Appellant Bank contends that the Ld. Recovery Officer has adopted an erroneous method of appropriation by relying upon the audit opinion and that the statement of account filed by the Bank, which reflects the outstanding dues, has not been properly considered. On the other hand, the Respondents contend that the entire decretal liability has been discharged and that the Bank is withholding the original title deeds without any legally sustainable justification. 4.4 This Tribunal is of the considered view that the question of satisfaction of a Recovery Certificate has to be determined strictly in accordance with the terms of the original adjudication and the subsequent modification, if any, made by the Appellate Tribunal. The Recovery Officer is required to give effect to the Recovery Certificate and the Orders governing the same and cannot travel beyond or alter the terms of such adjudication. At the same time, the Recovery Officer is not precluded from examining the payments made by the Certificate Debtors, verifying the accounts of the parties and determining the balance amount, if any, remaining payable under the Recovery Certificate. Such exercise is incidental to the execution and satisfaction of the Recovery Certificate. 4.5 The method of appropriation adopted in the audit opinion and the objections raised by the Appellant Bank thereto require proper examination. The audit opinion, by itself, cannot substitute the terms of the Recovery Certificate or the binding directions contained in the orders passed by the Tribunal and the Hon'ble DRAT. Similarly, the statement of account submitted by the Appellant Bank cannot be accepted merely because the Respondents have not filed a detailed counter to the same. The correctness of the statement has to be tested with reference to the actual payments received, the dates of such payments, the applicable rate of interest and the directions contained in the adjudicatory orders. In the present case, the rival statements of accounts and the competing claims regarding appropriation of payments have not been adequately reconciled in the impugned order. The objections raised by the Appellant Bank regarding the method of appropriation and the effect of the audit opinion also require a reasoned consideration.

4.6 Upon consideration of the pleadings, documents placed on record, the impugned order dated 21.03.2024 passed by the Learned Recovery Officer in S.R. No.16372 of 2023 in T.R.C. No.223 of 2022, and the rival submissions advanced on behalf of the parties, this Tribunal is of the considered view that the controversy essentially revolves around the computation of the outstanding liability under the Recovery Certificate, the manner of appropriation of payments made by the Respondents and the consequential question as to whether the entire decretal liability has been discharged. It is therefore considered appropriate that the matter be remitted to the Ld. Recovery Officer for a fresh and comprehensive determination of the outstanding liability, if any, after affording reasonable opportunity to both parties, without varying the findings and directions contained in the final order passed in O.A. No.500 of 2016 and the modified order passed by the Hon'ble DRAT in R.A. No.157 of 2018.

4. Accordingly, the Appeal is partly allowed setting aside the impugned Order dated 21.03.2024 passed by the Ld. Recovery Officer, DRT-III, Chennai, in S.R. No.16372 of 2023 in T.R.C. No.223 of 2022, insofar as it records a final determination regarding discharge of the entire decretal liability and directs return of the original title deeds to the Respondents. The matter is remitted back to the Ld. Recovery Officer, DRT-III, Chennai, for fresh consideration within a period of three months from the date of receipt of this order and determination of the actual outstanding liability, if any, payable by the Respondents under D.R.C. No.259 of 2018, duly

considering the dates and amounts of payments, the applicable rate of interest and the manner of appropriation in accordance with the decree, Recovery Certificate and subsequent appellate orders, without any modification or alteration to the final order or the Recovery Certificate beyond the jurisdiction vested in the said authority.

5. In the result, the Appeal No.07 of 2025 is partly allowed in terms of para 4 above. There shall be no order as to costs.

6. A copy of this order be communicated to the parties concerned as per extant guidelines and also to the concerned Recovery Officer of this Tribunal.

Sd/- (S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 13th day of November, 2026)

ANNEXURES LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

Sl. No. Description of Documents Document No.

1. OA final order dated 21.03.2018 A-1

2. DRC Copy dated 08.06.2018 A-2

3. Audit Opinion dated 10.02.2024 A-3

4. Impugned order dated 21.03.2024 A-4

5. Copy of the petition filed by the certified debtors A-5

6. Copy of the counter filed by the certificate holder A-6

7. Objections filed by the certificate holder for the audit opinion A-7

LIST OF DOCUMENTS PRODUCED BY THE DEFENDANTS Sl. No. Description of Documents Document No.

1. Order of Hon’ble Debts Recovery Tribunal II at Chennai in OA No.500/2016 dated 21.03.2018 D-1

2. Debts Recovery Certificate No.259/2018 in OA No.500/2016 issued by Hon’ble Debts Recovery Tribunal – II at Chennai dated 08.06.2018 D-2

3. Order of Hon’ble Debts Recovery Appellate Tribunal at Chennai in R.A.No.157/2018 dated 09.04.2019 D-3

4. Statement as to simple interest calculation as per order of Hon’ble Debts Recovery Appellate Tribunal at Chennai in R.A.No.157/2018 dated 04.05.2022 D-4

5. Order of Hon’ble High Court of Madras in W.P.No.26606/2022 dated 10.10.2022 D-5

6. Order of Hon’ble Debts Recovery Tribunal – III at Chennai in TMA No.02 of in TA No.1675/2023 dated 07.09.2023 D-6

7. Order of the Recovery Officer, DRT-III Chennai in SR No.16372/2023 in TRC No.223/2022 in TA No.2/2023 D-7

8. Letter from 1st respondent addressed to ICICI Bank Ltd, dated 26.04.2024 D-8

9. True Copy of adjudication of proceedings in TRC No.223/2022 before the Ld. Registrar Debts Recovery Tribunal – III at Chennai from 04.10.2023 to 07.03.2024. D-9

Sd/- (S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI