O.P.Arora vs Syndicate Bank & Ors. on 23 May, 2011

Delhi High Court
O.P.Arora vs Syndicate Bank & Ors. on 23 May, 2011
Author: Pradeep Nandrajog
*       IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                Date of Decision: 23rd May, 2011

+                                W.P.(C) 7463/2010

        O.P.ARORA                                 ..... Petitioner
                 Through:        Petitioner in person

                                 versus

        SYNDICATE BANK AND ORS           ..... Respondents
                 Through: Mr.V.K.Dhar, Advocate for R-1

        CORAM:
        HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
        HON'BLE MR. JUSTICE SURESH KAIT

     1. Whether the Reporters of local papers may be allowed
        to see the judgment?
     2. To be referred to Reporter or not?
     3. Whether the judgment should be reported in the Digest?

PRADEEP NANDRAJOG, J.

1. Petitioner O.P.Arora and his son Vishal Arora
constituted a partnership under the name and style
V.S.A.Ledermode. The partnership firm availed various credit
facilities from Syndicate Bank. The account became sticky and
the bank filed a recovery proceedings before the Debt
Recovery Tribunal claiming a sum of `4,19,80,000/- as on
9.1.1998 when the claim was filed.

2. Vishal Arora offered a settlement which was
accepted by the bank and as per the OTS dated 31.3.2000 the
bank agreed to receive `2.45 crores in full and final settlement
of its dues. Parties agreed to the amount being repaid with
W.P.(C) No.7463/2010 Page 1 of 6
agreed rate of interest in installments. The settlement was not
honoured.

3. Vishal Arora entered into another settlement with
the bank agreeing to repay `2.84 crores in installments
together with interest at the agreed rate and in terms of the
settlement the original application filed by the bank came to
be disposed of with a consent decree in sum of `2.84 crores to
be paid to the bank in installments together with agreed rate
of interest with a default clause that if the terms of the OTS
were breached the original amount claimed with the pendente
lite rate of interest would be the decree in favour of the bank.

4. O.P.Arora i.e. the petitioner filed an appeal against
the consent decree alleging that he had not consented to the
settlement which his son had entered into with the bank and
urged that the decree could be enforced only against his son
and the partnership firm and not him. The appeal succeeded
and the matter was remanded to the Debt Recovery Tribunal
for recording evidence and passing a decree as required by
law and needless to state this order was only to the benefit of
O.P.Arora. As regards his son and the partnership firm the
settlement decree stood final.

5. At the remanded stage, after recording evidence
the Debt Recovery Tribunal passed a decree in favour of the
bank and against O.P.Arora on 29.1.2010 in sum of
`4,19,80,000/- together with agreed rate of interest.

6. It would be relevant to note that O.P.Arora claimed
by way of defence that export proceeds received by the bank
in sum of `8,69,32,594/- from September 1992 to July 1995
had not been accounted for by the bank and thus he claimed
W.P.(C) No.7463/2010 Page 2 of 6
that if said amount is adjusted, far from the bank being
entitled to any decree, amount would be due to the
partnership firm. While passing the decree vide order dated
29.1.2010, said aspect of the matter has been gone into by the
Debt Recovery Tribunal under issue No.5.

7. It may be noted that the statement of account for
said period had been misplaced in the bank but from the
amount carry forwarded from time to time at the beginning of
each financial year and further transactions reflected from the
year 1996 onward and there being no evidence that the
‘Brought Forward’ sum was ever protested to at any point of
time, the Tribunal held against O.P.Arora.

8. O.P.Arora filed an appeal against the decree and
along therewith filed an application seeking waiver of the
decretal amount to be deposited inasmuch as law requires
75% of the decretal amount to be deposited when the appeal
is filed but confers a jurisdiction on the Appellate Tribunal to
pass an appropriate order waving the said requirement.

9. Vide impugned order dated 5.4.2010 the Appellate
Tribunal, noting that after the recovery proceedings have filed
the bank had received `2.4 crores directed that 75% of the
differential between `4.19 crores and `2.4 crores be deposited
by the appellant i.e. O.P.Arora the writ petitioner.

10. Instant writ petition challenges the order dated
5.4.2010 and during arguments Sh.O.P.Arora relied upon
communications received by him from the Ministry of Finance
in which there was a reference to the bank admitting having
misplaced the statement of account of the firm for the years
1992 till 1995. When we repeatedly questioned him as to
W.P.(C) No.7463/2010 Page 3 of 6
where was the statement of account of the firm and further
questioned him that if his stand was correct that
`8,69,32,549/- realized by the bank as remittance in the
account had not been credited, it would be apparent that as
against the bank being entitled to `4.19 crores, it would be the
firm which would be entitled to `4.50 crores from the bank and
this was prima facie unbelievable inasmuch as no prudent
person would not detect such huge amounts not being
correctly reflected in the statement of account, Sh.O.P.Arora
had no answer and we must fairly note that being 78 years of
age, with falling hearing and eyesight and not a very sharp
mind, we were unable to have a meaningful dialogue which
Sh.O.P.Arora who has chosen to argue the writ petition in
person. He kept on referring to certain communications which
he had with officers in various Ministries pertaining to the bank
not producing the entire statement of account. He referred to
certain orders passed levying penalty on him for not ensuring
import of goods for which foreign exchange was remitted, and
we need not burden ourselves with the same inasmuch as we
see no connection with the statement of account of the bank
with penalty levied upon him for not importing goods in
respect whereof foreign exchange was remitted. We could not
understand his grievance on said issue that the bank did not
supply the relevant papers. What relevant papers could the
bank supply? He could highlight none.

11. Having perused the decree passed by the Tribunal
we note that the Tribunal has noted that on 16.9.1992 the
partnership firm availed packing credit limit, import letter of
credit limit and foreign documentary bills purchase limit in
W.P.(C) No.7463/2010 Page 4 of 6
various sums which were enhanced at request of the firm and
its partners on 7.1.1995. Packing credit limit was enhanced to
`1.05 crores, import letter of credit limit to `1.5 crores with
some limits of `0.4 crores on INLC credit and `0.9 crores on
foreign documentary bills purchase credit. In other words the
firm had credits totaling `3.85 crores and by the time the suit
was filed the amounts due were approximately `4.19 crores. It
would be relevant to note that the previous credit facilities
were in sum of `1.5 lacs, `5 lacs and `20 lacs only. It was only
on 7.1.1995 that the credits were substantially enhanced and
from this it is apparent that the dispute pertaining to the
accounts not being produced for the period from September
1992 to July 1995 is a ruse created by the petitioner to predate
upon the negligence of the bank. But, he cannot shy away
from his responsibility to answer why did he never
contemporaneously question the ‘Brought Forward’ amount
each year in the statement of account as and when the
financial year changed.

12. Law requires that the person appealing has to
deposit 75% of the amount of debt so due and as determined
by the Tribunal. The Appellate Tribunal has been empowered
to reduce the amount but for good reasons. The amount
decreed is `4,19,80,000/- and the same carries interest as per
agreed rate and we note that the date of the claim was
9.1.1998. 13 years and 5 months have gone by and the
decretal amount would be more than 3 times the said sum of
`4,19,80,000/-.

13. Vide impugned order the petitioner has been
directed to deposit 75% of the differential between
W.P.(C) No.7463/2010 Page 5 of 6
`4,19,80,000/- less `2.4 crores and thus we see no scope to
reduce the term of the deposit inasmuch as the petitioner has
shown to us no special circumstance warranting the amount to
be reduced any further.

14. We dismiss the writ petition but extend time for the
petitioner to deposit the amount by 30th June, 2011.

15. Keeping in view the age of the petitioner we refrain
from imposing cost.

16. DASTI.

(PRADEEP NANDRAJOG)
JUDGE

(SURESH KAIT)
JUDGE

MAY 23, 2011
mm

W.P.(C) No.7463/2010 Page 6 of 6

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