NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7880      OF 2004

K.R. Subbaiah and Anr.         …Appellants

Versus   Indian Bank, Madurai                                             ...Respondent

JUDGMENT

R.M. Lodha, J.

The   judgment-debtors  are  in  appeal,  by  special  

leave. Indian Bank-respondent (for short, ‘the bank’) sued   the  

appellants  for  recovery  of  a  sum  of  Rs.  14,06,152.80   with  

interest and  costs before the Principal Sub Court, Madurai.  On  

January 7, 1986, a  preliminary decree was passed by the trial  

court against the appellants ex-parte,  as prayed for by the bank,  

and one month’s time was given for payment.    On November  

12,  1986,  an  ex-parte  final  decree  was  passed  against  the  

appellants in terms of the preliminary decree.  The bank levied  

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execution of the decree wherein two properties belonging to the  

first  appellant  were  sold   and   a  sum of  Rs.  4,07,000/-  was  

realized from that sale.  During the pendency of the execution  

proceedings, the Recovery of Debts due to Banks and  Financial  

Institutions Act, 1993 (for short, ‘the 1993 Act’)    came into force  

and  the  execution  proceedings  were  transferred  to  the  Debt  

Recovery Tribunal, Chennai  (for short, ‘the Tribunal’).  On April  

26, 2000, the Tribunal issued recovery certificate in favour  of  

the  bank for a sum of Rs. 15, 66,731.49 with future interest @  

18% p.a. on Rs. 11,95,200/- from the date of decree till the date  

of realization with costs and for sale of the properties mentioned  

in  the  schedule.    The proceedings before the Tribunal  also  

remained  ex-parte.   It  appears  that  pursuant  to  the  recovery  

certificate   dated April 26, 2000, initially an order of attachment  

of the judgment-debtors’ two properties  was passed on  August  

9, 2002 and then the  order of proclamation of sale was made  

on  October  11,  2002.   The  Debt  Recovery  Officer  fixed  

November  15,  2002  as  the  date  for  auction  of  these  two  

properties.  

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2. The  appellants  approached  the   High  Court  of  

Judicature at Madras by filing a civil revision petition  challenging  

the debt recovery certificate, the order of proclamation of sale  

and the proceedings before the Debt Recovery Officer.    The  

High Court,   however, dismissed  the civil  revision petition on  

February 3, 2003 as not maintainable as the appellants had a  

statutory  remedy of  appeal under Section 20 of the 1993 Act.  It  

may  be  noted  here  that    while  dismissing  the  civil  revision  

petition,   the   High  Court  observed  about   the   appellants’  

willingness to pay Rs. 15,00,000/- in   full and final settlement of  

the bank’s claim.  As regards the rate of interest, the High Court  

observed that the appellants may raise this aspect before the  

Debt  Recovery  Appellate  Tribunal,  (for  short,  ‘the  Appellate  

Tribunal’),   if so advised.   

3.  The  appellants  then  preferred  appeal  before  the  

Appellate  Tribunal,  Chennai  and since it  was barred by time,  

they also prayed for condonation of delay  in filing the same.  

However,  the  Appellate  Tribunal  was  not  convinced  by  the  

explanation  put  forth  by  the  appellants  and  dismissed   the  

appeal  on July 2,  2003 on the ground of delay.  

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4. The  appellants then approached the  High Court of  

Judicature  at  Madras  challenging   the  order  of  the  Appellate  

Tribunal.   The High Court held that the Appellate Tribunal  did  

not  err  in  dismissing  the  appeal  on  the  ground  of  delay  and  

accordingly  dismissed  the  revision  petition  on  December  23,  

2003.   It is from this order that the  present appeal has arisen.  

5.  On May 7, 2004  before this Court  an amount of  

Rs.16 lakhs  was handed  over by the appellants to the bank by  

way of bank drafts.  The Court noticed this fact  and passed  the  

following order:

“The petitioners have handed over an amount of  Rs.  16  lakhs  by  way  of  bank  drafts  to  the  respondent bank.  According to this Court’s order  dated  16.4.2004  the  decretal  amount  was  to  be  deposited.  According to the petitioner this amount  is the principal amount of Rs. 11,95, 200/- (Rupees  eleven lakhs ninety five thousand and two hundred  only)  with  18% interest  on  the  amount  upto  the  date of the decree and 6% interest on the principal  amount.   The  bank  drafts  are  accepted  by  the  learned  counsel  appearing  on  behalf  of  the  respondent without prejudice.  The respondent is  entitled  to  appropriate  the  same  towards  the  decretal  dues.   The  amount  which  has  been  handed over  in  this  Court  shall  be adjusted first  against the decretal amount and thereafter against  interest.   In  view  of  the  payment  made,  issue  notice.   Notice   is  accepted  by  Mr.  Himanshu  Munshi,  learned  counsel  appearing  for  the  respondent.  

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Counter affidavit, if any, be filed within four weeks,  Rejoinder affidavit  may be filed within two weeks  thereafter.  

Pending disposal of  the matter by this Court the  attachment will continue but no further steps to be  taken for sale of the petitioners property.”

6. The bank filed counter affidavit in opposition to SLP  

on July 23, 2004.  We shall refer to the counter affidavit a little  

later.  On November  29,  2004,  leave was granted and interim  

order  was directed to remain operative.

7. When the appeal was taken up for hearing by us, the  

learned counsel for the appellants submitted that the appellants  

desire to put an end to the litigation by making payment of the  

outstandings   as  on  date    on  the  basis  of  the  statement  

(Annexure R1) submitted by the bank before this Court  along  

with the counter affidavit.   Learned counsel submitted that the  

appellants  shall   pay interest  @  6% p.a.  as reflected in  the  

statement  (Annexure  R1)  on   the  remaining  amount  after  

adjustment of Rs. 16 lakhs  which was paid to the bank by way  

of bank  drafts on May 7, 2004.   

8. Mr. Himanshu Munshi, learned  counsel for the bank,  

however,  submitted  that  the  appellants  have  to  pay  interest  

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@18% p.a. on Rs. 11, 95,200/- from the date of decree till the  

date  of  realization  as  per  the  final  decree.   As  regards  the  

statement (Annexure R1) annexed with the counter affidavit  by  

the  bank,  learned  counsel  submitted  that  interest   calculated  

therein @ 6% was an error on the part of the Assistant General  

Manager, Circle Office, Madurai    

9. The short controversy that survives for consideration  

is whether the submission made on behalf of the appellants to  

pay off the bank’s outstandings as per the statement (Annexure  

R1) merits acceptance or not.  Pertinently, the appellants’ case  

before the Appellate Tribunal as well as the High Court was that  

the Principal  Sub Court, Madurai had passed   the final decree  

on November 12, 1986 against them for Rs. 15,60,562.75  and  

as per the said decree it was ordered that the bank is entitled to  

interest prescribed under Order 34 Rule 11 of the Code of Civil  

Procedure, 1908. The appellants’  contention  that the bank is  

entitled to  subsequent  interest  @ 6% for  the period after  the  

decree  on  the  principal  amount  of  Rs.  11,95,200/-  until  

realization  was not  gone into  by  the  Appellate  Tribunal  since  

appeal was time barred.  High Court also did not advert to this  

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aspect as it  found that dismissal of  appeal by   the Appellate  

Tribunal on the ground of delay was justified. It is true that in the  

recovery certificate it  is mentioned that the bank is entitled to  

recover  a sum of Rs. 15, 66,731.49  with future interest at the  

rate  of   18%  p.a.   from  the  date  of  decree  till  the  date  of  

realization  but the statement (Annexure R1) submitted by the  

bank along with counter affidavit shows otherwise.  Annexure R1  

is  as follows:

 STATEMENT OF OUTSTANDINGS AS PER BANK-RESPONDENT

Amt. due as on 13.10.1985 (dt. of filing suit) 14,06,152.80 ADD: Int. due till 12.11.86 @18% (final decree)   2,32,818.40 Amount due as on 12.11.1986 16,38,971.20 ADD: Int.@ 6% on Rs.1638971.20*from  12.11.1986

17,20,515.60

Amount due 33,59,486.80 LESS: Amount recovered from sale in 1993  - 407700 Int. Received from court                          83559 Amount received at our end on 04.03.97   4,91,259.00 Amount due 28,68,227.80 LESS: Int.@ 6% on Rs. 491259/- from 4.3.97  to  27.07.04

 2,11,658.60

Amount due  26,56,569.20 LESS:Deposited in Coimbatore DRT and  received at our end on 12.03.04

  3,78,500.00

Amount due  22,78,069.20 LESS:Int. @ 6% on 378500=from 12.03.04 to  27.07.04

       8,524.00

Amount due 22,69,545.20 LESS: Provident Fund received from HO  Personnel on 24.6.88

    38,966.00

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Amount due 22,30,579.20

LESS:Interest due on Provident Fund @10%           - Outstanding amount 22,30,579.20

10. A close look at  the aforesaid statement  would show that  

the  interest  until  the  date  of  the  final  decree  was  payable  by  the  

appellants  at the rate of 18% p.a. and thereafter at the rate of 6% p.a.  

on due amount.   Paragraph 5(iii) of the counter affidavit filed by the  

bank states that the calculation (Annexure R1) is  as per records of the  

bank.  When the statement (Annexure R1) has been prepared by the  

bank  as per its records,  we find no merit  in off  the cuff   argument  

advanced by   learned counsel for the bank that there is  an error in the  

statement (Annexure R1) with regard to the rate of interest.  If that were  

so, the bank could have filed some supplementary affidavit for which  

they had ample opportunity in the last six years.  

11. We are,  thus,  satisfied that the statement of the learned  

counsel for the appellants that the appellants shall  discharge their  

liability till the date of actual payment on the basis of  the statement  

(Annexure R1) deserves to be accepted.    

12. The appeal is, accordingly, disposed of by the following  

order:  

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(i) The statement (Annexure R1) annexed by the bank  with  

their counter affidavit shall be the basis for  calculating  

the due amount against the appellants  as  on  July  31,  

2010.  

(ii) The  bank  shall  communicate  to  the  appellants  exact  

amount  due  against  them  as  on  July  31,  2010  as  

indicated above. The amount of Rs. 16 lakhs paid by the  

appellants by way of bank drafts on May 7, 2004 shall be  

adjusted against the appellants’ dues as directed by this  

Court in the order dated May 7, 2004.    

(iii)  The appellants shall pay the due amount within 15 days  

of  the  receipt  of  such  communication  alongwith  further  

interest that may  become due upto the date of payment.  

(iv) On  payment  of  the  said  amount,   the  liability  of  the  

appellants under the recovery certificate dated April  26,  

2000 and any other recovery certificate issued thereafter  

shall  be   discharged  and  the  attachment  order   dated  

August  9,  2002  shall  stand  raised  and  the  order  of  

proclamation of sale dated October 11, 2002 shall stand  

set aside.   

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(v) If the appellants fail to pay their dues as indicated above,  

the Debt Recovery Officer shall be at liberty to proceed  

with the auction of the attached properties.  After recovery  

of  the outstanding amount  from the sale proceeds,  the  

balance, if any, shall be paid to the appellants.   

13.             The parties shall bear their own costs.   

..………………… J.                                       (Aftab Alam)

 ..………………… J.

(R.M. Lodha)

NEW DELHI, August  3, 2010

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