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TMI Blog2019 (11) TMI 1704X X X X Extracts X X X X X X X X Extracts X X X X ..... atter or of the arguments made in course thereof some eleven months after the conclusion of the hearing. 2. The facts are not in dispute. Defendant Small Industries Development Bank of India (SIDBI) issued two lots of bonds, one carrying interest at the rate of 13.5% per annum and the other carrying interest at the rate of 12.5% per annum. Specific numbers of bonds of either denomination were obtained by one CRB Capital Markets Limited. As is well known, such CRB Capital Markets Limited and the principal person in control thereof were involved in divers market irregularities and the Reserve Bank of India, in exercise of its special authority, was constrained to seek winding-up of CRB Capital Markets Limited before the Delhi High Court with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any interest due thereon should be kept in abeyance. The letter was received by facsimile by the defendant on or about June 9, 1997. As recorded above, notwithstanding receipt of such letter from the Reserve Bank, the defendant proceeded to release the interest due on the bonds on June 21, 1997 within a short time thereafter. 6. However, for subsequent periods, the interest on the bonds was withheld by the defendant. The plaintiff was constrained to invoke the writ jurisdiction of this Court for a direction on the defendant herein to release the interest in respect of the relevant bonds. This Court, however, declined to pass any favourable order in exercise of its authority under Article 226 of the Constitution. An appeal ensued, but no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose to amuse the Reserve Bank by withholding interest on the basis of its letter of June 9, 1997 despite having paid the initial tranche of interest on the relevant bonds immediately after receiving such letter. 7. Instruments as the bonds in this particular case are freely transferable and tradable in the open market. Such market instruments cannot be toyed with nor the free transferability thereof interdicted or tinkered with without valid reason. Nothing prevented the defendant in this case to honour the tenor of the instruments that it had issued and the defendant cannot demonstrate that either the letter of June 9, 1997 issued by the Reserve Bank or any order of the Delhi High Court presiding over the liquidation proceedings pertainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by or about February 21, 2005. It transpires that shortly after receipt of the interest component and the principal amounts covering the two sets of bonds, the plaintiff-appellant discovered that tax had been deducted at source at a rate higher than what was warranted. Upon a letter being issued by the plaintiff to the defendant, the position was rectified and the additional amount that had been deducted by way of TDS was made over by the defendant to the plaintiff. 9. Some seven months or so after the receipt of the payment on February 21, 2005 by the plaintiff, the plaintiff made a demand on the defendant for the delayed payment of the interest under the two sets of bonds and for the delay in releasing maturity values covered by the bond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there could be no further demand made in respect of the delayed payments. 12. Despite such being the position on facts, the claim came to be rejected at the trial primarily on the ground of accord and satisfaction and by referring to a judgment that the parties say had not been cited before the Court of first instance. It cannot be emphasised too much that when a Court seeks to rely on a judgment against any party, the fundamental canons of natural justice command that the party be made aware thereof so that such party may be able to deal with the same. Indeed, there are instances when judgments have been relied upon against a party without reference to such party and it has been discovered in course of the appeal that the relevant judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interest accrued and when such interest was finally paid. The defendant is also liable to compensate the plaintiff by way of interest in respect of the maturity values of the two sets of bonds, again from the respective dates of maturity till the date of actual payment. It is evident that the interest payments which fell due on June 21 and December 21 each year may not have been made for several years and all of them were collectively paid on or about February 21, 2005. For such periods, from the dates of accrual of the interest till the date of actual payment, the defendant will compensate the plaintiff by payment of interest at the rate of 6 per cent per annum simple. On account of the maturity values of the two sets of bonds, the defe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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