D. NAGESWAR RAO (THE APPELLANT) COMMITTED DEFAULT in repaying the loan availed by him from State Bank of India (respondent no. 1). Consequently, the Bank initiated steps under The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 to recover the loan amount and obtained a decree for an amount of Rs. 92,94,183/-.
Since the appellant could not satisfy the decretal amount, the Bank proceeded further and put the property to auction. Respondent No. 3 is the auction purchaser. The property was auctioned for an amount of Rs. 48,80,000/-. The Respondent No. 3 had deposited the entire amount of Rs. 48,80,000/- before the Debt Recovery Tribunal, though belatedly, and the same is kept in an interest bearing account.
When the matter came up on an occasion appeal before the Supreme Court, direction was given to the counsel for the Bank to take instruction as to what was the amount outstanding up to date. On written instruction it was informed that after adjusting the amount of Rs. 60,00,000/-. The outstanding dues were Rs. 1,02,06,815/-. The appellant took the stand that he may be permitted to pay the said amount in installments. The Supreme Court disposed of the appeal by directing to pay in installments.
The operative part of the judgement read as under :
Though, the request is seriously opposed by the learned counsel for the Bank, having regard to the past conduct of the appellant, in the interest of justice, we propose to give one more opportunity to the appellant. After all, the bank need only get its money, even if the auction is confirmed in favour of the respondent auction purchaser, it will not meet even 1/3 of the dues. The appellant undertakes that the amount can be paid in monthly installment of Rs. 15,00,000/-.
1) The appellant will clear the outstanding dues of Rs. 1,02,06,815/- by payment in monthly installments at the rate of Rs. 15,00,000/- per month to be paid by 5th of every month starting from March, 2016.
2) In case there is any default of two consecutive installments, we make it clear that the appellant shall not be entitled for any indulgence and his appeal will stand dismissed and it will be open to the Bank to proceed with the matter in accordance with law.
3) The deposit made by Respondent No. 3 will continue before the Debt Recovery Tribunal till the whole outstanding dues are cleared by the appellant as above. In case, the appellant clears the amount as per this judgement, the appellant shall pay an amount of Rs. 5,00,000/- towards compensation to Respondent No. 3 and the Bank shall also pay an amount of Rs. 5,00,000/- towards compensation to respondent No. 3. The deposit made by the auction purchaser, along with interest accrued shall be returned to him. The payment as above shall be made within one month from the date of appellant clearing the dues to the Bank.
Reference : Supreme Court. D. Nageswar Rao v. S.B.I. & Ors., civil appeal no. 786 of 2016 (from the Judgement and Order dated 16.7.2010 of the High Court of Orissa at Cuttack in Writ Petition (C) No. 1618 of 2010.