ROCKLINE CONSTRUCTION COMPANY vs. DOHA BANK QSC

1 Non­Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION MISCELLANEOUS APPLICATION NO.460 OF 2023 IN SPECIAL LEAVE PETITION (C)NO.16537 OF 2021 ROCKLINE CONSTRUCTION COMPANY  …APPELLANT VERSUS DOHA BANK QSC & ORS. ..RESPONDENTS J U D G M E N T SANJAY KAROL J. 1. The   present   Miscellaneous   Application   is   filed   seeking clarification   of   the   order   dated   12.05.2022   passed   by   this Signature Not Verified Digitally signed by Deepak Singh Date: 2023.04.24 18:01:55 IST Reason: Court in Special Leave Petition No.16537/2021 titled Rockline Construction Company v. Doha Bank QSC & Ors., whereby a 2 Judgement and Order of the High Court of Bombay upholding the   setting   aside   sale   of   a   property   by   the   Debt   Recovery Appellate   Tribunal,   Mumbai   was   not   interfered   with.   The applicant has prayed for the following relief: “a. Clarify the Order dated 12.05.2022 passed by this Hon’ble Court to the extent of fixing the rate of interest   at   which   the   amount   deposited   by   the applicant   in   2007   is   to   be   refunded,   and   also mesne profit, if any to be deducted from the said amount to be refunded to the applicant.” 2. The auction sale confirmed in favour of the applicant M/s. th Rockline Construction Company on 16   May 2007 was set aside with the applicant entitled to a refund of the entire sale amount along with the accrued interest, if any, after deducting the mesne profits and/or losses. There has been long­standing litigation  inter se  the parties regarding this transaction. At this juncture, it is observed that the present case has a chequered history, but for brevity, only relevant orders are being referred to.   3. The   order   dated   07.07.2014   passed   by   the   Debt   Recovery Appellate Tribunal, Mumbai, in Miscellaneous Appeal bearing No. 303/2010 titled as   “Oman International Bank S.A.O.G. v. 3 M/s Rockline Construction Co. & Anr.” , holding the applicant entitled to a refund of the amount, is extracted as under: “(1)   The   appeal   is   allowed   with   no   orders   as   to costs. The order of the DRT is set aside and order of the Recovery Officer has been restored so far the Original Application is concerned. (2) The Recovery Officer is directed to return Rs.1 nd Crore   deposited   by   2   Respondent   Mahendra Kumar Kawad with accrued interest within 7 days from the copy or receipt of the order. st (3)  The  Original  Applicant/1         respondent  is  also entitled to withdraw the entire sale amount with accrued   interest,   if   any,   (after   deducting   mesne profits   or   loss)   for   his   wrongful   purpose   on surrendering the entire possession of the property to the Bank. (4)   The   mesne   profits   can   be   ascertained   by appointing the Advocate/Counsel before the DRT on the application filed by the respective parties. (5) The Bank is directed to take appropriate steps to recover the amount as per the procedure known to law.”  (Emphasis supplied) 4. It is not in dispute that the said order attained finality with the passing   of   the   order   dated   12.05.2022   by   this   Court   in   a Special Leave Petition filed by Rockline Construction Company (supra). It is a matter of record that much prior thereto, the 4 applicant had already moved an application seeking a refund of the amount in terms of the order dated 07.07.2014 passed by the Debt Recovery Appellate Tribunal, Mumbai, in which vide order dated 13.07.2021, the subject matter of the present application, passed by the Recovery Officer­I, Mumbai Debt Recovery   Tribunal   No.1,   the   applicant   was   held   entitled   to simple   interest   @   9%   per   annum.   This   is   against   the applicant's   claim   for   interest   on   such   rate   and   terms   as normally govern business transactions.   The relevant portion of the order reads as under: “7. Observations : 7.1 From the records it is observed that CH Bank has taken/charged   interest   @15%   in   the   said   loan account.   It   appears   that   similarly   bank   earns interest on the money by lending and it may have also   used   that   money   Rs.9.56   crore   in   further lending that would have been fetched interest over and above 6 percent ranging between 9% to 15% or above.  Hence, it would be in the interest of the equity and justice to allow 9% simple interest on the sale consideration given/deposit made by the erstwhile auction purchaser. 7.2 From 2007 the Amount Rs.9.56 core @ 9% for 14 years   would   become   216056000.00   (Twenty­One Crores Sixty Lacs Fifty Six Thousand only).   7.3 5 In   view   of   the   above   Rs.58580859.00 (Rs.216056000.00   –   Rs.157475141.00)   (Rupees Five Crore Eighty Five Lacs Eighty Thousand Eight Hundred Fifty Nine only) is quantified as amount of which erstwhile auction purchaser/ M/s. Rockline Constructions   is   entitled   to   withdraw   on surrendering the entire possession of the property to the Bank. xxxxx xxxxx xxxxx xxxx 1. xxx 2. xxx 3. Erstwhile   auction   purchaser   M/s   Rockline   is entitled for Rs.58580859.00 (Rupees Five Crore Eighty   Five   Lacs   Eighty   Thousand   Eight Hundred   Fifty   Nine   only)   after   deducting   the mesne   profit/loss   as   per   order   of   the   Hon’ble DRAT and Hon’ble Bombay High Court.” (Emphasis supplied) 5. It is also borne from the record that assailing the same, the appellant   preferred   an   appeal   that   is   clear   from   the   bare reading of the instant application.   6. In   support   of   its   claim,   the   applicant   has   placed contemporaneous material indicating the market practice at which   the   rate   of   interest   is   charged   about   commercial transactions;   it   is   @14.5%   with   monthly   rests,   subject   to change from time to time.   7. There is no dispute that the applicant deposited huge amounts as part of the auction bid in the year 2007.   6 8. In   the   backdrop   above,   it   cannot   be   disputed   that   the applicant   is   entitled   to   interest.   The   only   two   contentious issues that survive, requiring adjudication, are (i) the rate and terms of interest to which the applicant would be entitled and (ii) the determination of mesne profits. In normal course, we would have ourselves decided the same; however, considering the fact that the appeal in relation to it is pending before the adjudicatory   authority,   being   Appeal   No.8   of   2022,   Debt Recovery Appellate Tribunal, Mumbai, we refrain from doing so,   enabling   the   said   fact­finding   authority   to   do   so, expeditiously and in accordance with the law.   9. Before us, it is argued that the appeal is perhaps barred with the efflux of time. We find this objection, in the attending facts and circumstances, to be untenable given the long­standing pending litigation  inter se  the parties to the  lis.    As such, the plea of limitation cannot be allowed to stand in the way of the determination   of   the   applicant's   right   and   entitlement   of monetary claims on merits.   10. Hence, having considered the arguments put forth in the application as also the written submissions filed on behalf of 7 the respondent, we dispose of the instant application in the following terms: A) The parties shall appear before the appellate authority st on 1  May 2023 and place on record a copy of the order; B) The   appellate   authority   shall   decide   the   appeal preferred by the applicant strictly on merits, in accordance with the law, expeditiously and because each day’s delay would only entail loss by way of the addition of amount payable as interest, shall decide the same within a period of two months. All parties shall fully cooperate. The issue of limitation shall be deemed to have been closed. C) Liberty   reserved   to   the   applicant   to   approach   this Court should the need so arise specifically.   11. The miscellaneous application stands disposed of. ..........................................J. (KRISHNA MURARI) .........................................J. (SANJAY KAROL) 8 th Dated : 24  April, 2023; Place  : New Delhi.