PUNJAB NATIONAL BANK v. M/S. SHREE JYOTI EDUCATION AND MANAGEMENT TRUST WORLD & ORS
In the Court's own words
Paragraph 9PNB accepted the DRAT’s order, but the Trust and Tara Prasad Satpathy, its managing trustee, approached the High Court challenging the said order by way of WP (C) No. 32036 of 2023. Dealing with the said writ petition, the Division Bench relied heavily upon the certificate dated 24.12.2020 issued by PNB confirming that the outstanding loan amount, as on 13.10.2020, stood at ₹31,99,000/-. The Bench then noted that after the said date, the Trust had deposited ₹59,321.98 paisa on 28.12.2020 and ₹1,84,000/- on 11.02.2021, in all, a sum of ₹2,43,321.98 paisa and accepted the plea of the Trust that, after deduction of such amount, the dues stood reduced to ₹29,55,678.02 paisa. The Division Bench, accordingly, directed the Trust and Tara Prasad Satpathy, its managing trustee, to pay the said amount within four weeks in full and final settlement of their dues and for closure of their loan account. Thereupon, PNB filed I.A. No. 2279 of 2024 in WP (C) No. 32036 of 2023 seeking recall/modification of the order dated 11.01.2024. However, by its later order dated 14.05.2024, the Division Bench opined that there was no error apparent in its earlier order and dismissed the I.A. Hence, these appeals.
Paragraph 10The Chief Manager of PNB, Circle SASTRA Centre, Cuttack, filed affidavit dated 03.12.2024 along with a statement of account of the Trust with United Bank of India from 22.02.2012 onwards. Therein, we find that, as on the date of classification of the Trust’s loan account as a non-performing asset, i.e., on 30.06.2017, the principal loan amount due, along with interest payable thereon calculated upto the said date, stood at ₹1,25,30,842/-. We may also note that as per the affidavit dated 03.12.2024, interest was to be applied only till the date the account was classified as a non-performing asset, i.e., 30.06.2017. This is in accordance with the accounting system followed by banks, as per applicable guidelines. After such date, i.e., from 01.07.2017, the bank maintained a separate suspense account for the interest due on the outstanding loan amount. Therefore, the interest component no longer found reflection in the loan account statement. In keeping with this system, as on the date of filing of the O.A. before the DRT, i.e., 04.05.2018, the dues in the loan account stood at ₹64,25,915 and the interest payable, in the suspense account, stood at ₹11,30,765/-, adding upto ₹75,56,680/-, as claimed by the United Bank of India. The certificate dated 24.12.2020, therefore, had to be understood in the light of the accounting system as the figure of ₹31,99,000/- mentioned therein did not take into account the interest component, reflected in the suspense account.
Paragraph 11Oversimplification of calculation by the High Court with respect to the amount payable, ignoring the existence of the suspense account for the interest component since the date of classification of the loan account as a non-performing asset, and giving effect only to the figure mentioned in the PNB’s certificate dated 24.12.2020, viz., ₹31,99,000/-, thereby accepting the plea of the Trust that the sum of ₹2,43,321.98 paisa paid by it needed to be deducted therefrom reducing its dues to ₹29,55,678.02 paisa, is therefore clearly unsustainable. The Trust and its trustees cannot blithely ignore the accounting system followed by banks and come up with different calculations at different points of time to suit their own interests. The statement of account filed by them before us, claiming that the principal amount due as on 29.06.2017 was ₹64.25,915/-, is contrary to their running account statement, produced by the bank, which shows that the principal amount along with interest calculated upto that date, stood at ₹1,25,30,842/-. We may also note that, before the DRT, their stand, as reflected in their written arguments, was that the rate of interest charged was on the higher side and that they were due and liable to pay ₹32,63,899.65 paisa and not the claimed amount of ₹57,01,917.32 paisa. However, in WP (C) No. 32036 of 2023, they ignored their earlier stand and relied upon the certificate dated 24.12.2020 to claim that only a sum of ₹29,55,678.02 paisa was payable by them!