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Issues:
1. Entitlement to pendente lite interest on the suit amount. 2. Exercise of discretion by the Bank Court in waiving off pendente lite interest. 3. Applicability of RBI scheme for one-time settlement in the case. Analysis: Issue 1: Entitlement to pendente lite interest on the suit amount The appeal was against a judgment where the plaintiff-Bank was held not entitled to pendente lite interest on the suit amount, as the defendants had fully satisfied the amount by payment through drafts and FDRs. The plaintiff-Bank had initiated a recovery suit for a specific amount with interest against the defendants. The Trial Court found that the entire suit amount had been paid, and relying on relevant judgments, exercised discretion under section 34 of the CPC to waive off pendente lite interest. The plaintiff-Bank contested this decision, arguing that the Court did not consider their plea for contractual interest and failed to acknowledge their liability to pay interest on deposits and charge interest on advances. Issue 2: Exercise of discretion by the Bank Court in waiving off pendente lite interest The Bank Court exercised its discretion to waive off pendente lite interest after finding that the suit amount had been fully paid by the defendants. The Court referred to relevant judgments and held that under section 34 of the CPC, the decision to award or refuse interest is at the Court's discretion. The plaintiff-Bank contended that the interest waiver was unjustified, especially considering their contestation of the case for seven years. However, the Court found no justification to award interest when the suit amount had been satisfied, leading to the dismissal of the plaintiff's suit. Issue 3: Applicability of RBI scheme for one-time settlement in the case During the appeal, it was revealed that the Reserve Bank of India had issued revised guidelines for compromise settlement of Non-Performing Assets (NPAs) of public sector banks. The defendants had paid the outstanding balance, which was declared as NPAs in 1990, through drafts and FDRs. The plaintiff-Bank had also communicated with the defendants for a compromise settlement under the RBI scheme for one-time settlement in 2003. The Court found that the defendants' case fell within the coverage of the RBI scheme, and the outstanding balance had been fully satisfied as per the scheme's requirements. Consequently, the Court dismissed the appeal, stating that the plaintiff-Bank had no merit in seeking further recovery from the defendants. In conclusion, the High Court of Jammu and Kashmir dismissed the appeal, upholding the Bank Court's decision to waive off pendente lite interest, as the suit amount had been fully paid by the defendants in accordance with the RBI scheme for one-time settlement.
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