Joint Compromise Petition in Recovery Proceeding No. 4 of 2001 and Transfer Application No. 10 of 1997. Case: United Bank of India Vs Rafiullah Tea and Industries Ltd. and Ors.. Kolkatta Debt Recovery Tribunals
|Joint Compromise Petition in Recovery Proceeding No. 4 of 2001 and Transfer Application No. 10 of 1997
|For Appellant: Saurav Bhattacharya, Adv. and M.S. Chowhan, Chief Legal Officer, UBI and For Respondents: N. Ahmed and Sanchita Burman Roy, Advs.
|S.D. Singh, Presiding Officer
|Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970; Recovery of Debts Due to Banks and Finencial Institutions Act, 1993 - Sections 19(22), 25 and 26(2); Banks and Financial Institutions Act, 1993; Income Tax Act, 1961; Income Tax (Certificate Proceedings) Rules, 1962; Security Interest Act, 2002; Banking Regulation Act, 1949...
|3 (2006) BC 128
|February 22, 2006
|Kolkatta Debt Recovery Tribunals
S.D. Singh, Presiding Officer
The certificate holder, United Bank of India, a Nationalized Bank [corresponding new Bank within the meaning of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970) and the Rafiulla Tea and Industries Pvt. Ltd., the certificate debtor No. 1 and other certificate debtors have filed joint petition for compromising the entire amount recoverable under the certificate issued in the instant matter (hereinafter referred to as the joint compromise petition). The joint compromise petition has been verified and signed by Mr. Sujoy De, Chief Manager of the certificate holder Bank and Mohd. Arfanulla, Managing Director of the certificate debtor No. 1. The resolution of the Rafiulla Tea and Industries Pvt. Ltd., the certificate debtor No. 1 has also been filed in this Tribunal on 9th September, 2005. It is apparent from the resolution that the Managing Director of the Company, Mohd. Arfanulla is authorized by the Board of the certificate debtor No. 1 to represent the company to sign terms of settlement with the certificate holder, United Bank of India and to deal and sign all documents relating to instant case No. R.P. No. 4 of 2001 arising out of T.A. No. 10 of 1997.
The brief facts, relevant for the disposal of the joint compromise petition, are that a certificate, under Sub-section (7) now corresponding Sub-section (22) of Section 19 of the RDDBFI Act, 1993 on the basis of the judgment of this Tribunal on 18th December, 2000 made ex prate in T.A. No. 10 of 1997, was issued on 4th January, 2001 for realization from the certificate debtor jointly and severally the amount of Rs. 3, 00, 69, 358/- only (Rupees three crores sixty-nine thousand three hundred fifty-eight only) with costs of Rs. 10, 000/- (application fee) and Rs. 5, 000/-(Advocate Fee) together with interest thereon @ 12% per annum from 7th November, 1986 till the date of actual realization.
In para 5 of the joint compromise petition it has been specified that during pendency of the recovery proceedings before the learned Tribunal, a proposal for compromise was sent to the Bank by the certificate debtor/company for settlement of the claim of the Bank in the group of accounts namely (1) Rafiulla Tea and Industries and others i.e. the instant proceeding; (2) Rafiulla Brothers; and (3) Assam Solvex Pvt. Ltd. which was referred to the competent authority of the Bank. Upon holding negotiations with the Bank through persons/directors, principal officer of the company a settlement has been arrived at for a consolidated sum of Rs. 165 lacs in full and final settlement of the three group accounts including the matter in issue to be paid by the company within the specified date approved by the Bank. It may be mentioned that Original Application No. 217/97, U.B.I. v. Rafiulla Brothers and Ors. and Original Application No. 218/97. U.B.I. v. Assam Solvex (P) Ltd. and Ors. are pending with D.R.T., Guwahati.
The facts of para 5 of the joint compromise petition as disclosed in the last preceding para exposes a view that the certificate holder Bank has agreed with the certificate debtor No. 1 company to compromise the claim in the certificate in the instant recovery proceeding and the proceedings in two other Original Applications U.B.I. v, Rajiulla Brothers and U.B.I. v. Asam Solvex (P) Ltd. which are pending with D.R.T., Guwahati. It has not been clarified in the joint compromise petition as to for what specific amount the instant recovery proceeding is intended to be compromised.
No doubt the compromise is an agreement. In a proposal which is an offer to compromise, the terms of the offer must be certain. It must not be vague. The vagueness of the offer would not create a contractual relationship. In this matter the settlement for consolidated sum of Rs. 165 lacs of three cases of which two are pending before the learned D.R.T., Guwahati makes the consideration of the settlement for the claim in the instant recovery proceeding a vague consideration. The reason is obvious that the compromise of the Original Applications pending before the learned D.R.T., Guwahati is beyond the jurisdiction of this Tribunal. In such condition the joint compromise petition for the recovery proceeding before this Tribunal should contain the specific consideration. Suppose for a moment the compromise in the Original Applications pending before the learned D.R.T., Guwahati are not accepted or effected by that Tribunal, it would be very difficult and complicated to adjudge the consideration for the compromise proposed in the instant case. It is the settled principal of law that the vagueness of the offer would not create a contractual relationship and make the compromise altogether a vague concept.
This Tribunal vide its Order No. 39 dated 9th September, 2005 observed that the properties of the certificate debtors have not been specified in the joint compromise petition and the learned Recovery Officer was directed to give details regarding all the available properties of the certificate debtors and the present status of the recovery in the instant matter with his view regarding the possible recovery in the matter under the existing circumstances. The learned Recovery Officer vide his Order No. 40 dated 13th September, 2005 has observed in this regard as under:
Learned Advocate for the certificate debtor submits that the movable and immovable properties of the company were duly inventorised by the learned receiver and also valuation was made by the valuer. From the record, it is observed that the movable and immovable properties were evaluated by R.K. Agarwal and from the valuation report dated 11th May, 2005, it is observed that there are six different properties of Rafiulla Tea and Industries Pvt. Limited. It is also observed that total valuation of the movable and immovable properties of the said company comes to Rs. 2, 17, 52, 164/-. Learned Advocate for...
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