A brief history of the case is follows:
My grandfather had borrowed some money from a friend around 40 years ago and in exchange signed an agreement with him giving him our house as a security for a period of 5 years. During this period, the other party had to mortgage it with a specified bank and borrow the same amount which was borrowed from him. And within this period my grandfather would pay off the loan from the bank. A collateral security was also given - 20 prefilled checks of a specified amount in case the bank loan was not possible. The other party neither mortgaged the property anywhere, nor they deposited all the checks within the time period. Out of 20, they encashed 3 checks and they told us the balance 17 had bounced, whereas we have verified that the funds were sufficient in our account for encashing all checks. After the expiry of 5 year period, the other party got the property registered in his name and filed for possession in court. We also filed a dispute based on the agreement. After almost 37 years, the civil court decided our dispute and decreed to pay them the principal amount with 12% simple interest. Subsequently, they appealed in appelate court and got a decree of 15% compound interest with quarterly rests. The decree gave us a period of 3 months to deposit the money (about Rs. 2.5 crores), which was totally unacceptable. We had some delay in filing appeal in high court and almost at the end of the third month, the appeal was filed but on the first date, the stay could not be availed. The next date was beyond the decree period.
So, my father deposited his share out of the total decretal money (total 8 shares), out of his life savings. He had borrowed this money as overdraft against fixed deposits in his name. The OD rate charged by the bank is 11% compounded quarterly. It has been over 1.5 years since that money is lying with treasury and the hgih court had ordered the stay last year but the final decision is still pending. Also, during the appeal, my father passed away last year, leaving us nothing but this disputed property and the FD money which is on lien to the bank for the OD. We have been in a financial crunch after his death until now, as the OD account has become more than the amount of the FD's due to the interest charged over the last 1.5 years and is ever increasing.
My queries are as below:
1. During the pendency of the high court appeal, can the money be withdrawn from the treasury? If yes, then how? Please explain in detail.
2. If not withdrawn till final decision, can we claim the interest paid to the bank on OD for the whole period, to be set off against the amount finally decided by high court, stating the we could not have avoided this interest expense due to the pendency of the appeal?
Please provide any case laws, if possible.
