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Indian Bank v. Basheer M. Picha and Another

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 8223 of 2015)Decided 18 Sept 2015
Civil Appeal No. 8223 of 2015
Justice Anil R. Dave · Justice Adarsh Kumar Goel

Background

Indian Bank had a long-pending recovery dispute against borrowers and their guarantors who had not repaid an admittedly due amount. During proceedings before the Debt Recovery Tribunal and the High Court, the guarantors had offered in February 2013 to settle by paying an additional Rs. 2 crores, an offer the Bank had almost accepted in principle, but the matter remained unresolved by the time it reached the Supreme Court on appeal.

Decision Breakdown

Given the considerable time that had passed since the settlement offer and wanting to bring finality to prolonged litigation, the Supreme Court directed the respondent-guarantors to pay an enhanced sum of Rs. 2.5 crores, with 50% payable by 31 December 2015 and the balance by 31 March 2016. The Court ruled that if this amount was paid on schedule, the High Court's order would stand modified accordingly; if not paid, the Bank would be free to recover the amount through ordinary legal process. The appeal was disposed of as allowed to this extent, with no order as to costs.

Lesson Learnt

The Supreme Court can use its powers to convert a stalled settlement offer into a firm, time-bound payment order to finally end long-pending recovery litigation, while preserving the creditor's right to pursue normal recovery if the debtor defaults on the court-fixed schedule.

Official source (sci.gov.in)View Judgment (PDF)

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