Delhi High Court - Orders
M/S Bestech India Pvt. Ltd vs Idbi Bank Ltd & Ors on 27 September, 2022
Author: Najmi Waziri
Bench: Najmi Waziri
$~15
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 6606/2019 & CM APPL. 27922/2019
M/S BESTECH INDIA PVT. LTD. ..... Petitioner
Through: Ms. Raavi Birbal and Mr. Rishabh
Nigam, Advocates.
versus
IDBI BANK LTD & ORS ..... Respondents
Through: Mr. Deepak Kochhar, Advocate for
IDBI Bank.
CORAM:
HON'BLE MR. JUSTICE NAJMI WAZIRI
HON'BLE MR. JUSTICE VIKAS MAHAJAN
ORDER
% 27.09.2022 The hearing has been conducted through hybrid mode (physical and virtual hearing).
1. This petition impugns the order dated 04.04.2019 passed by the learned Debts Recovery Appellate Tribunal („DRAT‟) in Misc. Appeal Mo. 145/2019, dismissing the petitioner‟s appeal against the order of the learned Debt Recovery Tribunal („DRT‟) in O.A. No. 233 of 2014, whereby the petitioner‟s right to file written statement was closed on account of it not being filed within the statutorily permissible time. The petitioner‟s application for condonation of delay was not considered.
2. On 25.02.2019, the learned DRT observed, inter-alia, as under:
"...Signature Not Verified Digitally Signed By:KAMLESH W.P.(C) 6606/2019 Page 1 of 8 KUMAR Signing Date:06.10.2022 16:29:24
Heard, record has been thoroughly perused. In the present matter Ms. Anshul Bahal and Mr. Dincur Bajai appeared regularly on behalf of defendant and put appearance since, 16.10.2015 but despite, repeated adjournment WS not filed accordingly, Ld. Incharge of this Tribunal, vide, order dated 09.05.2017 closed the right to file WS of the defendants. It is a matter of fact that WS has to be filed within 30 days, inspite of that in the present matter already sufficient opportunity was given to the defendants as there were putting regular appearance since 16.10.2015 therefore there is no ground that the previous counsel of the defendants not informed and it is equal responsibility of the defendants to aware of the proceeding. Therefore, no ground for allowing the present application, accordingly, the present I.A. stand dismissed.
..."
3. The said order was impugned before the learned DRAT, which has upheld the same and recorded, inter-alia, as under:
"...
It is not being disputed by the learned counsel for the appellant that the written statement was not presented before the DRT within the statutory period of 30 days as prescribed under Section 19(5) of the RDDBFI Act. It is also not disputed that no request was made within the 30 days period for extension of time by further 15 days to enable the appellant to file the written statement. Under Section 19(5) of the Act, if request for extension of time for filing written statement is made, the DRT is empowered to extend the time but only by a further period of 15 days and nothing beyond that. In the present case, on the expiry of initial 30 days period for filing written statement, the defence automatically stood struck off and there was nothing for the DRT to pass any separate order and that, too, after many months of expiry of initial period of 30 days. The statute has created a bar against filing of written statement by a defendant in the O.A. once Signature Not Verified Digitally Signed By:KAMLESH W.P.(C) 6606/2019 Page 2 of 8 KUMAR Signing Date:06.10.2022 16:29:24 initial 30 days period expires and no extension is sought. In a recent judgement passed by the Hon'ble Madhya Pradesh High Court in the case of M/s Crest Steel and Power Private Limited & Ors. vs. Punjab National Bank & Ors. (Misc. Petition No.2271/2018, decided on 10.5.2018) also it has been categorically held that the DRT has no power to extend the period for filing of the written statement, therefore, whether or not the appellant's earlier counsel, if at all he was grossly negligent, had caused damage to the interest of the appellant resulting in striking off the defence of the appellant in the O.A., that fact is totally irrelevant. The proceedings under Section 19 of the RDDBFI Act have to be finalised within a period of six months and in case such prayers, as is made in the present case by the appellant, are entertained casually, the entire purpose of prescribing outer time limit for disposal of the O.A. will be defeated.
..."
4. The learned counsel for the petitioner submits that the said order is erroneous insofar as it has construed the law as putting a bar on the extension of time, when infact under the then extant law there was no such bar. She submits that an application for review of order dated 09.05.2017 was filed in September 2017. It is, however, noted that appearance on behalf of the petitioner was put in since 16.10.2015.
5. When the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, was first notified, its section 19(5) provided:
"A defendant shall, at or before the first hearing or within such time as the Tribunal may permit, present a written statement of his defence."Signature Not Verified Digitally Signed By:KAMLESH W.P.(C) 6606/2019 Page 3 of 8 KUMAR Signing Date:06.10.2022 16:29:24
6. This sub-section was amended on 15.01.2013 to read as under:
"...
The defendant shall, within a period of thirty days from the date of service of summons, present a written statement of his defence:
Provided that where the defendant fails to file the written statement within the said period of thirty days, the Presiding Officer may, in exceptional cases and in special circumstances to be recorded in writing, allow not more than two extensions to the defendant to file the written statement. ..."
7. In 2016, the nomenclature of the statute was amended to the Recovery of Debts and Bankruptcy Act, 1993 and s. 19(5) was amended again, to read as under:
"...
(5) (i) the defendant shall within a period of thirty days from the date of service of summons, present a written statement of his defence including claim for set-off under sub-section (6) or a counter-claim under sub-section (8), if any, and such written statement shall be accompanied with original documents or true copies thereof with the leave of the Tribunal, relied on by the defendant in his defence:
Provided that where the defendant fails to file the written statement within the said period of thirty days, the Presiding Officer may, in exceptional cases and in special circumstances to be recorded in writing, extend the said period by such further period not exceeding fifteen days to file the written statement of his defence; ..."
8. What is to be noted from the above is that in the first section 19(5) no time limit was fixed under this special statute. Then the 2013 amendment provided for two extensions beyond the statutory 30 days Signature Not Verified Digitally Signed By:KAMLESH W.P.(C) 6606/2019 Page 4 of 8 KUMAR Signing Date:06.10.2022 16:29:24 for filing of written submissions. It was left to the discretion of the Presiding Officer to grant such extension of time in exceptional cases and special circumstances, to be recorded in writing. The limit for either extension was not prescribed. However, by the 2016 amendment that discretion has been taken away and a time limit has been specified, i.e. 30 days extendable by another 15 days.
9. It is in view of the latter amendments that the impugned order of the learned DRAT held that the learned DRT had no discretion to extend the time.
10.The learned counsel for the petitioner submits that the law has to be seen from the date when the right to file a written statement arose i.e. on 16.10.2015. On that day, there was no curtailment of discretion upto two extensions; that the 2016 amendment do not apply retrospectively. In this regard, she relies upon the dicta of the Supreme Court in the following cases:
i) Garikapatti Veeraya vs. Subbiah Choudhury, (1957) SCR 488, which inter-alia, held as under:
"...
25. In construing the Articles of the Constitution we must bear in mind certain cardinal rules of construction. It has been said in Hough v. Windus [(1884) 12 QBD 224 at 237] that "statutes should be interpreted, if possible, so as to respect vested right". The golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed [Leeds and County Bank Ltd. v. Walker, (1883) 11 QBD 84 at p. 91 : Moon Signature Not Verified Digitally Signed By:KAMLESH W.P.(C) 6606/2019 Page 5 of 8 KUMAR Signing Date:06.10.2022 16:29:24 v. Durden, (1848) 2 Ex. 22 : 76 RR 479 at p. 495] . The following observation of Rankin, C.J. in Sadar Ali v. Dalimuddin at p. 520 is also apposite and helpful:"Unless the contrary can be shown the provision which takes away the jurisdiction is itself subject to the implied saving of the litigant's right". In Janardan Reddy v. State [(1950) SCR 940 at pp. 946-47] Kania, C.J. in delivering the judgment of the Court observed that our Constitution is generally speaking prospective in its operation and is not to have retroactive operation in the absence of any express provision to that effect. The same principle was reiterated in Keshavan Madhava Menon v. State of Bombay [(1951) SCR 228] and finally in Dajisaheb Mane v. Shankar Rao Vithal Rao [(1955) 2 SCR 872 at pp. 876-77] to which reference will be made in greater detail hereafter.
..."
ii) Katta Sujatha Reddy and Ors Vs. Siddamsetty Infra Projects Pvt. Ltd and Ors. and connected matters, 2022 SCC OnLine SC 1079 dated 25.08.2022, held inter-alia as under:
"...
55. From the aforesaid decision, it is clear that when a substantive law is brought about by amendment, there is no assumption that the same ought to be given retrospective effect. Rather, there is a requirement for the legislature to expressly clarify whether the aforesaid amendments ought to be retrospective or not. ..."
11.This court too in a case relating to the aforesaid Act in Vishal Hira Merchant Pvt Ltd and Ors. Vs. HDFC Bank, AIR 2017 Del 49, has held inter-alia as under:
Signature Not Verified Digitally Signed By:KAMLESH W.P.(C) 6606/2019 Page 6 of 8 KUMAR Signing Date:06.10.2022 16:29:24"...
20. A counter claim is in the nature of a cross suit. Under Section 19(8) and (9) of the DRT Act read with Order 8 Rule 6A(1) of the Civil Procedure Code, a counter claim can be raised in respect of a cause of action that has arisen before or after the filing of the suit/application for recovery, but before the defence is delivered, or before the time for delivering the defence has expired. A counter claim being in the nature of a cross suit as provided in Order 6A(2) of the Code, Article 113 of the Limitation Act would apply to a counter claim.
..."
12.What emanates from above is that the law, as it existed on the date when the cause of action arose, is to hold sway regarding the proceedings till the law was amended. The statute has to be interpreted "if possible, so as to respect vested rights"1. The amendment of 2016 is clearly not retrospective. Discretion was available to the DRT to consider granting two extensions after the expiry of 30 days, in terms of the 15.01.2013 amendment of s. 19(5). The issue could have been considered on the merits of the application for condonation of delay.
13.Accordingly, the order of the learned DRAT dated 04.04.2019 is set aside. The case is remanded to the learned DRT to consider the matter afresh on the merits of the application for condonation of delay.
14.This court has not expressed any opinion on the merits of the condonation application itself.
15.The learned counsel for the parties submit that they will request the learned DRT to dispose-off the petitioner‟s application for 1 Hough v. Windus [(1884) 12 QBD 224 at 237] Signature Not Verified Digitally Signed By:KAMLESH W.P.(C) 6606/2019 Page 7 of 8 KUMAR Signing Date:06.10.2022 16:29:24 condonation of delay within a period of eight weeks from the receipt of a copy of this order.
16.The petition stands disposed-off.
NAJMI WAZIRI, J VIKAS MAHAJAN, J SEPTEMBER 27, 2022 SS At this stage, it is noticed that application for condonation of delay, if any, filed before the learned DRT is not on record. It would need to be ascertained whether such application was filed in the first place. List for further proceedings on 10.10.2022.
NAJMI WAZIRI, J VIKAS MAHAJAN, J SEPTEMBER 27, 2022 SS Signature Not Verified Digitally Signed By:KAMLESH W.P.(C) 6606/2019 Page 8 of 8 KUMAR Signing Date:06.10.2022 16:29:24