Settlement Reached in Loan Dispute Between Amarjeet Jolly and Corporation Bank

The Supreme Court of India, in the case of Amarjeet Jolly & Another vs. Corporation Bank, resolved a long-standing loan dispute through a mutually agreed settlement. The ruling, delivered by Justices Kurian Joseph and Rohinton Fali Nariman, brought an end to the litigation with a structured repayment plan.

Background of the Case

The dispute arose when Corporation Bank filed a suit against the appellants, Amarjeet Jolly and another, for the recovery of a loan amounting to US $18,576.91 with an interest rate of 16.5% per annum. The suit was filed on July 17, 1989, and the Delhi High Court, in its judgment dated February 13, 2012, ruled in favor of the Bank, directing the appellants to pay the decreed amount along with interest and a cost of Rs. 25,000.

The appellants, aggrieved by the High Court’s decision, approached the Supreme Court challenging the imposed liabilities and seeking a reduction in the interest rate.

Key Legal Issues

• Was the interest rate of 16.5% per annum justified for the loan repayment?
• Could a settlement be reached to reduce the financial burden on the appellants?
• Did the Bank have the authority to accept a reduced interest rate in the settlement?

Arguments of the Parties

Petitioner’s Arguments (Amarjeet Jolly & Another)

The appellants argued that the interest rate of 16.5% per annum was excessive and should be reduced to a fairer amount. On February 1, 2016, they proposed a settlement by offering to pay US $12,000 at the applicable exchange rate as on January 1, 1988, along with an interest rate of 9% per annum.

Respondent’s Arguments (Corporation Bank)

The Bank initially rejected the appellants’ offer but later, on February 19, 2016, made a counteroffer. The Bank agreed to settle the entire dispute by accepting the decreed amount of US $18,576.91 with an interest rate of 9% per annum from the date of the suit (July 17, 1989). The appellants accepted this counteroffer.

Supreme Court’s Observations

Justice Kurian Joseph, delivering the judgment, stated:

“The appeal is disposed of, as agreed to by both the sides, as per the following terms: The appellants shall pay US $18,576.91 at the conversion rate of Rs. 15.60 per Dollar with 9% interest from 17.07.1989.”

The Court acknowledged the mutually agreed settlement and provided a clear repayment schedule.

Final Verdict

The Supreme Court ruled that:

• The appellants must pay US $18,576.91 at the conversion rate of Rs. 15.60 per Dollar with 9% interest from July 17, 1989.
• The amount must be deposited with the respondent Bank within a period of 9 months from the date of judgment (March 3, 2016).
• If the amount is not deposited within the specified timeframe, the judgment shall stand automatically recalled, and the appeal will be dismissed.

The case was disposed of as per the mutually agreed terms, bringing an end to the litigation.

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Download Judgment: Amarjeet Jolly & Ano vs Corporation Bank Supreme Court of India Judgment Dated 03-03-2016-1741853913300.pdf