Tribune press service
Chandigarh, June 19
The Punjab and Haryana High Court made it clear that the amount deposited by a defaulting corporate borrower to prove its good faith must be returned in the event its Single Settlement Request (OTS) is rejected by a bank.
The decision of Judicial Jaswant Singh and Judge Harinder Singh Sidhu came following a plea against the Appeals Tribunal for the collection of debts of New Delhi and other respondents, by a defaulting borrower through by lawyer Aalok Jagga.
The company had deposited Rs2.4 crore
- A company had deposited Rs 2.4 crore with the bank to show good faith for reaching a one-time settlement.
- The amount could only be adjusted on the loan if the company’s claim was accepted.
- As the bank did not accept the one-time settlement prayer, the amount had to be returned.
Appearing before the bench, Jagga argued that the company had deposited Rs 2.4 crore with a bank just to show good faith for its entry into the OTS. The amount could only be adjusted on the loan if the company’s claim was accepted. As the bank did not accept the OTS prayer, the amount had to be returned.
The judiciary asserted that it was not disputed that the amount had been deposited during the life of the petition only to show good faith to enter the OTS. Referring to the defendants’ arguments that the petitioner had implicitly waived his right to claim reimbursement of the sums deposited, the Court added that the law was well established that the waiver implied an intentional waiver of the right. This could not be assumed in the absence of supporting documents in the file.
The bench added that an intentional and conscious act on the part of a party to give up its legal right was required. Such an act had to be obvious because it involved serious civil consequences which were the abandonment of its legally enforceable right.
The Chamber added: “Where and how the amount was deposited, whether in the court registry or in the form of an FDR with a bank / secured creditor or in any other way would not be material. as long as it is clear that the deposit was made only for the purpose of establishing the good faith of the depositor in reaching a settlement. It may be otherwise if there is a clear and unequivocal consent of the depositor for the amount deposited to be allocated to the unpaid contributions.