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2018 (1) TMI 1638 - SC - Indian LawsGrant of extension of time - condonation of delay that had occurred in adhering to the time schedule of payment as agreed to in the Lok Adalat - HELD THAT - In the facts of the present case, the view taken by the learned Appellate Tribunal (DRAT), cannot be said to be so wholly unreasonable or unsustainable so as to justify interference by the High Court. If the agreed amount stood paid though with some delay, condonation of the delay is a possible course of action, if the grounds for delay justified a departure from what was also agreed upon, i.e., the right of a Bank to recover the entire dues. All would depend on the facts of each case. The ends of justice would be met if for the delay that had occurred, the Appellants are made liable to pay simple interest @ 24% p.a. on the amount of ₹ 34.5 lakhs (as agreed to in the Lok Adalat) for the period from the date of the Award of Lok Adalat, i.e., 10.09.2004 to the date of last payment, i.e., 29.10.2006. In addition, a further amount of ₹ 10 lakhs to be paid by the Appellants to the Respondent-Bank as compensation and costs - Appeal allowed.
Issues:
Challenge to High Court order setting aside extension of time for payment in a settlement reached in Lok Adalat. Analysis: The appeal challenged an order by the High Court setting aside an extension of time granted by the Debt Recovery Appellate Tribunal (DRAT) for payment delay in a settlement reached in a Lok Adalat. The Bank sought recovery of unpaid dues of ?62,96,582.68 with interest at 19.8% p.a. The parties agreed in the Lok Adalat to an amount of ?34.5 lakhs payable within three months. The Appellants made partial payments but defaulted on the agreed schedule. The Appellants sought an extension of time and condonation of delay before the DRT, which was initially dismissed but reversed by the DRAT. The Bank challenged the DRAT's decision in a writ petition before the High Court, leading to the current appeal. The Supreme Court directed the parties to indicate the amounts they would offer to resolve the matter. The Appellants offered an additional ?10 lakhs as compensation for the delay in payment. The Bank did not present a concrete offer but stated the total dues as ?8,17,65,148/-. The Court acknowledged the delay in payment and the agreement allowing the Bank to recover the full amount in case of default. The DRAT considered the delay justifiable in favor of the borrower, leading to the matter being closed. However, the High Court reversed this position in the writ petition. Considering the facts, the Court found the DRAT's view not unreasonable. If the agreed amount was paid with some delay, condonation of delay was deemed appropriate if justified by the grounds for delay. In this case, the Court held the Appellants liable to pay simple interest at 24% p.a. on the agreed amount of ?34.5 lakhs from the Lok Adalat award date to the last payment date. Additionally, the Appellants were ordered to pay ?10 lakhs as compensation and costs to the Bank within 45 days. Failure to comply would allow the Bank to proceed with auctioning the mortgaged property. In conclusion, the appeal was allowed, setting aside the High Court's order and establishing the terms for payment and compensation to resolve the matter within 45 days to avoid auctioning the mortgaged property.
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