Debt Recovery Appellate Tribunal - Delhi
Rattan Kumar Jain And Anr. vs Canara Bank on 21 February, 2003
Equivalent citations: III(2003)BC116
ORDER
K.S. Kumaran, J. (Chairman)
1. This is an appeal against the order dated 8.4.2002 passed by the learned Presiding Officer of the DRT-I, Delhi (hereinafter referred to as 'the DRT') dismissing the application filed by the appellants herein to set aside the ex parte final order passed on 22.10.2001 in O.A. 312/98. Aggrieved, the appellants, who are defendants 4 and 5 in the O.A, have filed this appeal. The respondent-Bank has filed a suitable reply opposing this appeal.
2. I have heard the Counsels for both the sides, and perused the records.
3. The respondent/plaintiff-Bank filed O.A. 312/98 against the appellants (who are defendants 4 and 5) and three others, and the learned Presiding Officer of the DRT observed in his final order that the defendants have been served by publication of the notice in the newspaper 'Statesman', but despite service, the defendants did not appear, and, therefore, were proceeded ex parte. Accordingly, he passed the ex parte final order against the appellants and others for Rs. 66,83,928/- with interest and costs.
4. The 1st defendant is a private limited company, and the appellants are said to be its directors. The contention of the appellants is that the 1st appellant/4th defendant was a permanent resident of Guwahati (Assam), and had given his address as Fancy Bazar, T.R. Phookan Road, Guwahati (Assam), that he shifted in the year 1991 to Delhi, and had given his address as E/83, Masjid Moth, Delhi, but in the O.A. the address of the 1 st appellant/4th defendant bar, been wrongly given as E-948. Chittaranjan Park, New Delhi. So far as the 2nd appellant/5th defendant is concerned, the contention of the appellants is that he is the resident of Fancy Bazar, T.R. Phookan Road, Guwahati (Assam), but in the O.A his address was mentioned as Fancy Bazar, Guwahati without mentioning the name of the road. Therefore, the contention of the appellants is that the address given in the O.A. for 2nd appellant/5th defendant is incomplete.
5. The learned Counsel for the appellants points out that when the O.A. was taken up by the Registrar on 3.2.1999, the learned Counsel for the respondent-Bank had filed an affidavit (verified on 18.1.1999) regarding service on defendants, that the Registrar had observed in his order dated 3.2.1999 that the affidavit showed that there is no such person as 1st appellant (4th defendant), and that the notice to the 2nd appellant (5th defendant) had not been received back till date. The copy of the affidavit filed on behalf of the respondent-Bank is also on the file of this appeal, which reads that the registered covers sent to the 2nd appellant (5th defendant) had not been received back till date, and that sent to the 1st appellant (4th defendant) had come back on the ground no such person was at that address.
6. The learned Counsel for the appellants contends that though the affidavit regarding service stated that the returned registered covers were filed along with the affidavit, they had not, in fact, been filed, and that even the Registrar had only stated in his order dated 3.2.1999 that the affidavit along with postal receipts had been filed. He further contends that the learned Counsel for the respondent-Bank had merely sought permission to serve the notice by way of publication, and that request had been allowed without either the learned Counsel for the respondent-Bank stating that the appellants 1 and 2 (defendants 4 and 5) are either avoiding service or they could not be served at any other address and by any other mode, or that the Registrar was satisfied about the same. He, therefore, contends that there was no valid ground for directing the service of notice by publication in the newspaper 'Statesman'. Another contention put forward by the learned Counsel for the appellants is that the publication was made in the Delhi edition of the newspaper only, and the appellants/defendants 4 and 5 being permanent residents of Guwahati, this publication cannot be stated to have served the purpose also.
7. In these circumstances, the learned Counsel for the appellants (defendants 4 and 5) contends that since the appellants had not been served with notices in accordance with law, the ex parte final order should have been set aside. We find from the O.A. that the address of the 1st appellant (4th defendant) has been given as E-948, Chittaranjan Park, New Delhi, but the learned Counsel for the appellants contends that the 1st appellant (4th defendant) never resided at this address. According to him, the said appellant is a permanent resident of Guwahati (Assam), and had shifted in the year 1991 to E-83, Masjid Moth, New Delhi. He further contends that though subsequently the 1 st appellant (4th defendant) had shifted to E-947, Chittaranjan Park, New Delhi, this appellant did not furnish this changed address to the Bank inasmuch as the matter had been settled between the 2nd defendant in the O.A. and the Bank. Of course, the settlement, as pleaded by this appellant, is disputed by the respondent-Bank. But, the appellants have produced the copies of two guarantee deeds executed by the 1st appellant (4th defendant) in favour of the respondent-Bank, one dated 25.8.1989 and the other dated 3.6.1991. In the former guarantee deed dated 25.8.1989, the 1st appellant (4th defendant) had given his address as Fancy Bazar, Guwahati, Assam and in the latter dated 3.6.1991, he had given his address as E-83, Masjid Moth, New Delhi-48. Therefore, we find that the 1st appellant/4th defendant had given these two addresses to the respondent-Bank, but, yet, in the O.A., his address has been mentioned as E-948, Chjttaranjan Park, New Delhi, which the 1st appellant (4th defendant) claims that he did not furnish to the respondent-Bank. He claims that he was not a resident of door No. E-948 though the learned Counsel for the appellants concedes that the 1st appellant was a resident of door No. E-94 7. The 1st appellant/ 4th defendant has also produced the copy of the Photo Identity Card issued to him by the Election Commission of India, wherein his address has been given as E-947, C.R. Park, New Delhi. Pointing out these aspects, the learned Counsel for the appellants contends that in spite of the respondent-Bank having with them the permanent address as also the Masjid Moth address, notice was taken to a wrong address, namely, door No. E-948, Chittaranjan Park, New Delhi, and naturally, the same was not served upon the 1st appellant (4th defendant) on the ground that there was no such person. The affidavit regarding service filed before the DRT (verified on 18.1.1999) reads as if the Registered covers containing the notice, addressed to the 1st appellant (4th defendant), had returned with the endorsement "no such person at the address". We find from the order dated 3.2.1999 passed by the Registrar of the DRT that the Registrar had perused the affidavit regarding service and found that notice to the 4th defendant had not been served on this ground, that the learned Counsel for the respondent-Bank had requested permission to serve the 4th defendant (1st appellant) by publication, and that his request had been accepted. The learned Counsel for the appellants contends that without making all attempt to serve the 1st appellant (4th defendant) at the two other addresses mentioned above, the request of the learned Counsel for the respondent-Bank for effecting substituted service by publication was granted for the mere asking without even an application in this regard from the respondent-Bank, and without even the learned Counsel for the respondent-Bank stating that the 1st appellant (4th defendant) was avoiding service or that he could not be served at any other address or by ally other mode. The learned Counsel for the appellants also contends that the Registrar of the DRT had also not recorded his satisfaction that the 4th defendant was avoiding service, and that he could not be served by any other mode. Therefore, the learned Counsel for the appellants contends that there was no valid ground for directing the publication of notice in the newspaper, and, therefore, there has been no valid service on the 1st appellant (4th defendant) in accordance with law. In support of his contention, the learned Counsel for the appellants relies upon the decision of Hon'ble Punjab & Haryana High Court in Kuldip Rai v. Sharan Singh, AIR 1989 Punjab and Haryana 319, where it has been held as follows:
"Before ordering substituted service the Court should be satisfied that the conditions on which alone it can be ordered exist, namely, that the defendant is keeping out of the way to avoid service or that for any other reason service cannot be effected in the ordinary way. The interim orders reproduced supra do not indicate that there was any material before the Court on the basis of which it could record its satisfaction that the respondents were keeping out of the way to avoid service or that for any other reason service cannot be effected in the ordinary way. Before resolving to the provision of Order 5 Rule 20 of the Code of Civil Procedure (for short "the Code"), it is obligatory for the Court to record its satisfaction as enjoined under the statute. The substituted service cannot be ordered in the routine manner. The perusal of the interim orders does not justify issuance of order for substituted service. It indicates lack of applicability of judicial mind to the fact of the case. Moreover, it was obligatory for the respondent landlord to prove that the newspaper through which substituted service was ordered was in daily circulation in the locality in which the petitioner was last known to have actually and voluntarily resided, carried on business or personally worked for a gain. Once it is disputed that there was no valid service, it is for the respondent to establish that the petitioner was validly served and valid service presupposes service in accordance with the procedure prescribed by law."
9. In my view, this decision squarely covers the case on our hand. As pointed out already, it is evident from the two guarantee deeds executed by the 1st appellant (4th defendant) referred to above that the 4th defendant had given two addresses--one of the Guwahati and the other of Masjid Moth, New Delhi. Still notice was not taken to either of these two addresses, but had been taken to an address with a wrong door number as pointed out already. The notice sent could not be naturally served, and was returned on the ground that there was no such person at that address. The normal effort of the respondent-Bank should have been to seek an order from the DRT for issuance of fresh notice to either or both of the two other addresses mentioned above. Without doing so, and without even stating that the 1st appellant (4th defendant) could not be served by any other means or that he is avoiding service deliberately, the learned Counsel for the respondent-Bank had merely made a request for publishing the notice in the newspaper, and that was granted for the mere asking without the Registrar recording his satisfaction that the 4th defendant was avoiding service deliberately, and could not be served at any other address or by any other mode.
10. Though the provisions of Order 5 Rule 20 CPC may not strictly apply to the proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the Act), the underlying principle of that provision of the CPC, namely, natural justice that a defendant should be given an opportunity of being heard before he is condemned, will certainly apply to proceedings under this Act also.
11. Even on principles of natural justice, the respondent-Bank should have attempted to serve the 1st appellant (4th defendant) at the two addresses mentioned in the guarantee deeds referred to above, and should have established that the 1st appellant (4th defendant) was avoiding service, and could not be served by any other mode except substituted service. The Registrar of the ORT must not only be satisfied about this aspect, but he should have also recorded his satisfaction. Therefore, when nothing in this regard has been done either by the learned Counsel for the respondent-Bank or by the Registrar of the DRT, I am of the view that the Registrar of the DRT was not right in directing substituted service by publication of the notice, nor was the learned Presiding Officer of the DRT right in accepting the service by publication of notice in the newspaper as valid service, and proceeding against the 1st appellant (4th defendant) ex parte.
12. So far as the 2nd appellant (5th defendant) is concerned, we find that while his address has been given in the O.A. filed before the DRT as Fancy Bazar, Guwahati, Assam, the affidavit regarding service (verified on 18.1.1999) is to the effect that the notice intended for the 5th defendant had not been received back till that date. As pointed out already, on 3.2.1999, for the mere asking and with nothing more, the request for serving 5th defendant/ 2nd appellant by publication in the newspaper, was allowed by the Registrar of the DRT. Whatever has been stated above with regard to the validity of service of notice by publication on the 1st appellant (4th defendant), applies with equal force to the case of the 2nd appellant (5th defendant) also. Therefore, 5th defendant also cannot be stated to have been validly served by publication of the notice in the newspaper.
13. One more additional contention put-forward by the learned Counsel for the appellants with regard to the 5th defendant is that the publication was made in the Delhi Edition of the newspaper 'Statesman1 whereas the 5th defendant is a permanent resident of Guwahati, Assam, and, therefore, also, it cannot be held that there was a valid service on the 5th defendant by this publication. The learned Counsel for the appellants relies upon the decision of Hon'ble Delhi High Court in N.C. Coel v. O.P, Sharaf, 27 (1985) Delhi Law Times 267, wherein it was held as follows :
"Order 5 Rule 20, CPC specifically lays down that there the Court acting under Sub-rule (1) orders service by an advertisement in a newspaper, the newspaper shall be a daily newspaper circulating in the locality in which the defendant is last known to have actually and voluntarily resided, carried on business or personally worked for gain. There is no finding by the learned Addl. Rent Controller that this newspaper 'Jan Yug' satisfied the requirements of Order 5 Rule 20(1A) of the Code."
14. This decision, though rendered in relation to a case to which CPC is applicable, also goes to support the contention of the learned Counsel for the appellants that there has been no proper and valid service on the 2nd appellant (5th defendant), since the principles of natural justice require that a party should be put on notice before any adverse order is passed against him.
15. Of course, the learned Presiding Officer of the DRT has observed in the impugned order dated 8.4.2002 that the 5th defendant is deemed to have been served in the ordinary manner, since, neither the undelivered registered envelope nor the AD card was received back within a month from the date of despatch, and, therefore, under the General Clauses Act, he is deemed to have been served. But, the learned Counsel for the appellants points out that the address of the 2nd appellant (5th defendant) given in the O.A. is incomplete because the address is given merely as Fancy Bazar, Guwahati, Assam, without mentioning the name of the road. The learned Counsel for the appellants contends that the name of the road is T.R. Phooken Road. The learned Counsel for the appellants also points out that the name of the road has also been given in the guarantee letter executed by the 2nd appellant (5th defendant) dated 3.6.1991 in favour of the respondent-Bank. A copy of this guarantee letter is also on the file of the appeal wherein the name of the road has also been given. That means the address given in the O.A. is incomplete. Therefore, the learned Counsel for the appellants rightly contends that if the notice had been sent to the correct and complete address, then at least the Tribunal would be in a position to presume that this defendant has been served with notice in view of the fact that the postal envelope had not returned within a reasonable time.
16. In these circumstances, I an of the view that it cannot be held that the 5th defendant should be deemed to have been served, as has been held by the learned Presiding Officer of the DRT.
17. The discussions made above clearly go to show that it cannot be stated that there was any valid ground for directing service on the appellants/defendants by publication, and, consequently, these appellants/defendants cannot be stated to have been validly served. The 5th defendant cannot also be deemed to have been served in the ordinary manner also. Therefore, when there is no valid service of notice on the appellants herein the ex parte final order has to be set aside as against them.
18. Though in the Index filed with this appeal, it has been mentioned as if an application under Section 5 of the Limitation Act was also filed before the DRT for condoning the delay in filing the application to set aside the ex parte order, Mr. Anand Aggarwal, learned Counsel for the appellants (defendants 4 and 5) points out that there was no delay in filing the application for setting aside the ex parte final order. He points out that the appellants (defendants 4 and 5) came to know of the ex parte final order on 20.3.2002, filed the above said application on 26.3.2002 for setting aside the exparte final order, and the said application was disposed of on 8.4.2002 by the learned Presiding Officer of the DRT. Therefore, according to him, it has been mistakenly mentioned in the Index that there was an application for condonation of delay whereas it was only an application for stay. The learned Counsel appearing on behalf of the respondent did not dispute the statements made by the learned Counsel for the appellants (defendants 4 and 5) in this regard.
19. Therefore, the appeal has to be allowed, and, accordingly, the appeal is allowed setting aside the impugned order dated 8.4.2002 passed by the learned Presiding Officer of the DRT-I, Delhi. The application for setting aside the ex parte final order stands allowed. The ex parte final order passed in this matter is set aside as against the appellants (defendants 4 and 5).
20. The learned Presiding Officer will take up the O.A. 312/98 back to file with regard to these appellants (defendants 4 and 5), and then dispose of the same in accordance with law after affording an opportunity of putting forward their case to the appellants (defendants 4 and 5) and the respondent-plaintiff.
The appellants (defendants 4 and 5) and the respondent-Bank shall appear before the DRT-I, Delhi on 21.4.2003 without awaiting for any further notice from the DRT-I, and take further directions from the DRT-I, Delhi.
Copy of this order be furnished to the learned Counsels for both the sides.