Debt Recovery Appellate Tribunal - Delhi
Ashok Malhotra vs Syndicate Bank And Ors. on 18 December, 2002
Equivalent citations: III(2003)BC75
ORDER
K.S. Kumaran, J. (Chairman)
1. The 4th defendant Mr. Ashok Malhotra in O.A. No. 210/97 before the Debts Recovery Tribunal-I, Delhi (hereinafter referred to as the DRT) is the appellant herein. He was proceeded ex parte and final order was passed on 7.1.2002. Therefore, the appellant/4defendant filed an application for setting aside the ex parte final order. But, the same was dismissed by the learned Presiding Officer of the DRT by his order dated 25.2.2002 on the ground that there is no reason for setting aside the ex parte final order. Aggrieved, the 4th defendant has come forward with this appeal. Notice was dispensed with for respondents 2 to 11. Though a Counsel wanted to appeal for the 9th respondent, later on even Vakalatnama was not filed for the 9th respondent, and he was proceeded against ex parte. The 1st respondent/plaintiff Bank has filed a suitable reply opposing the appeal.
2. I have heard the Counsel for the appellanl/4th defendant and the 1st respondent/ plaintiff Bank, and have perused the records.
3. The learned Counsel for the appellant/4th defendant contends that the 4th defendant was not served with the copy of the O. A. and other documents, and, therefore, on 9.8.2000 he had moved an application for direction to the plaintiff Bank to supply the copy of the O. A. and other documents so that he can file the written statement, and, accordingly, a direction was given on that date by the learned Presiding Officer of the DRT. He further contends that by mistake he was shown as the 5th defendant, and was directed to file the written statement within four weeks, and the matter was adjourned to 6.10.2000. The learned Counsel for the appellant/4th defendant also points out that even in the summons the name of the 4th defendant was shown at serial No. 5 as if he was the 5th defendant and, therefore, the 4th defendant's Counsel and the Presiding Officer were proceeding on the basis that the 4th defendant's Counsel Mr. V.K. Nanda was appearing for the 5th defendant, and Mr. V.K. Nanda, Advocate has been shown as appearing for the 5the defendant from 9.8.2000 onwards. The learned Counsel for the appellant/4th defendant points out from the day-to-day orders passed by the learned Presiding Officer the following facts:
4. On 6.10.2000 the learned Presiding Officer was on leave and the case was adjourned to 5.1.2001, and that from 5.1.2001 it was adjourned to 15.5.2001 as the Presiding Officer had received orders for transfer. From 15.5.2001 the case was adjourned to 31.7.2001 directing that the written statement be filed in two weeks, but, on 31.7.2001 the Advocates were on strike and the case was once again adjourned to 21.9.2001. On 21.9.2001 the appellant/4th defendant (stating him to be the 5th defendant) was given time to file written statement and the case was adjourned to 17.10.2001.
5. The learned Counsel for the appellant/4th defendant contends that Mr. V.K. Nanda, the Counsel who had been appearing for the 4th defendant mistook the date as 19.10.2001 and, therefore, did not appear on 17.10.2001. He further contends that on 19.10.2001 as also on the subsequent dates viz., 22.11.2001 and 4.1.2002 Mr. V.K. Nanda did not appear before the Tribunal. According to the learned Counsel for the appellant/4th defendant, it was due to Mr. V.K. Nanda's negligence that the 4th defendant has come to suffer the ex parte order in spite of the fact that between 19.10.2001 and 6.2.2002 the appellant/4th defendant had been contacting Mr. V.K. Nanda to know as to what steps he had taken. He contends that the appellant was informed by Mr. V.K. Nanda that he shall be filing an application. According to the learned Counsel for the appellant/4th defendant, on 14.2.2002 Mr. V.K. Nanda told the 4th defendant that he would be filing an application, and wanted some money to meet the expenses which infuriated the 4th defendant who took back the file from Mr. V.K. Nanda. The learned Counsel for the appellant/4th defendant contends that the appellant/4th defendant had not only written a letter to the DRT on 15.2.2002, but also complained against Mr. V.K. Nanda to the Bar Council. Therefore, the learned Counsel for the appellant/4th defendant contends that the appellantAUh defendant should not be made to suffer because of the negligence of his erstwhile Counsel. The appellant/4th defendant has also filed the photostat copy of the original file over maintained by Mr. V.K. Nanda, Advocate to show that the date of hearing was taken wrongly, and copies of the letters written to the DRT by the 4th defendant on 15.2.2002, and of the complaint dated 18.2.2002 sent by him to the Bar Council, in support of his contention. The learned Counsel for the appellant/4th defendant also contends that prior to 5.1.2000 there was no effective hearing before the Tribunal as is also evident from the day-to-day orders passed by the Presiding Officer of the DRT, and in these circumstances the ex parte order passed against the appellant/4th defendant should have been set aside.
6. A perusal of the day-to-day orders passed by the learned Presiding Officer of the DRT shows that prior to 5.1.2000 there was no effective hearing after 10.12.1998, and the case was being adjourned for various reasons like the Presiding Officer being on leave, that the number of cases posted on a day was large, or that the Presiding Officer was transferred, etc. Apart from that, on 9.8.2000 Mr. V.K. Nanda, the Counsel for the appellant/4th defendant had filed an application seeking a direction to the plaintiff Bank to supply the copy of the O.A. and other documents. But, Mr. V.K. Nanda was shown to be appearing for the 5th defendant. This mistake, as it is seen from the day-to-day orders of the learned Presiding Officer, continued till the end. But on 9.8.2000 the plaintiff Bank was given a direction by the Presiding Officer to supply copy of the O.A. and other documents to the appellant and the latter was directed to file the written statement within four weeks. Thereafter the case was adjourned to 6.10.2000. On 6.10.2000, the Presiding Officer was on leave and the case was adjourned to 5.1.2001, and from 5.1.2001 it was adjourned to 15.5.2001 on the ground that the Presiding Officer had received transfer orders. On 15.5.2001 the case was adjourned for the written statement and evidence to 31.7.2001, on which date the Advocates were on strike, and the matter was adjourned to 21.9.2001. On 21.9.2001 the matter was placed before the Registrar before whom two weeks' time was sought to file the written statement. The Registrar adjourned the matter to 17.10.2001 with a direction to the appellant to file the written statement. As pointed out already, the learned Counsel for the appellant/4th defendant contends that Mr. V.K. Nanda, the then Counsel for the appellant mistook the date as 19.10.2001 and did not appear on 17.10.2001 or even on the subsequent dates. The case was adjourned from 17.10.2001 to 22.11.2001 by the Assistant Registrar of the DRT, taking note of the fact that no written statement had been filed by the 5th defendant (mistake for 4th defendant). He directed the file to be put up before the Presiding Officer on 22.11.2001 for orders. On 22.11.2001, there was none appearing for the 4th defendant, and he was proceeded ex parte (once again wrongly showing him as 5th defendant). The matter was adjourned to 4.1.2002 and ultimately the ex parte final order was passed on 7.1.2002. Some misunderstanding appears to have developed between the 4th defendant and Mr. V.K. Nanda, Advocate as is apparent from the letters written by the appellant/4th defendant to the Debts Recovery Tribunal as also Bar Council. According to the appellant/4th defendant, he has been contacting the erstwhile Counsel, who had been promising to do the needful but had not done so, though he demanded more money.
7. Therefore, we find that though a duty is cast upon the appellant/4th defendant to see that the written statement is filed, he cannot be blamed in entirety for the failure to file the written statement. Several circumstances pointed out above had led to the adjournments. The erstwhile Counsel Mr. V.K. Nanda appeared lastly on 21.9.2001, and, thereafter, did not appeal before the Tribunal till the ex parte final order was passed. The appellant/4th defendant claims that he has been contacting his erstwhile Counsel from 19.10.2001, but his Counsel was telling him that some application will be filed, and had also demanded money. According to the appellant/4th defendant, he became infuriated, and had even taken back his file from the erstwhile Counsel, and lodged a complaint with the Bar Council against his Counsel. In the circumstances pointed about, I am of the view that the appellant/4th defendant requires to be given an opportunity to file his written statement and contest the case on merits, in the interests of justice.
8. Of course, the learned Counsel for the 1st respondent Bank contends that the appellant has been negligent for a long time in not fifing his written statement, that he cannot sit back and relax merely because he had engaged a Counsel, and throw the blame on the Counsel that he was negligent. He even points out that in the copy of the file cover of his erstwhile Counsel the array of the appellant, which was shown as No. 5, has been corrected as No. 4, and, therefore, the mistake that the appellant was being shown as the 5th defendant in the day-today orders of the Tribunal cannot be taken advantage of by the appellant.
9. The learned Counsel for the 1st respondent relies upon the decisions in Anant Raj Agencies v. Delhi Development Authority, 86 (2000) Delhi Law Times 834; Mrs. Naimat Kaur v. Decon Company, 82 (1999) Delhi Law Times 389; New Bank of India v. Marvels (India), 93 (2001) Delhi Law Times 558, in support of his contentions. But, these are the cases where the applicants were found to be negligent in defending their case, or that their non-action and want of bona fide were apparent. The learned Counsel for the 1st respondent also relies upon the decision in National Small Industries Corporation Ltd. v. Thermo Setting Industrial Products, 2000 II A.D. (Delhi) 857. That was a case where the application for setting aside the ex parte decree was filed almost 18 years after the decree, and that the said application was not even accompanied by an application to condone the delay. The learned Counsel for the 1st respondent also relies upon the decision in M. Paul Babuta v. Union of India and Anr., 75 (1998) Delhi Law Times 634, in support of his contention that by merely engaging a lawyer the party is not relieved of his duties, and if he did not contact his Counsel, the negligence of the Counsel cannot come to his aid in an application under Order IX Rule 13 to set aside the ex parte order.
10. But, in my view, and in view of the circumstances pointed out by me already, it cannot be stated that the appellant/4th defendant was completely negligent or that he did not even contact his Counsel, but is throwing the blame on his Counsel. The circumstances pointed out above show that some misunderstanding had arisen between the appellant/4th defendant and his Counsel also with regard to the action taken by the Counsel in defending the case, and even a complaint had been given by the appellant to the Bar Council. Therefore, these decisions relied upon by the learned Counsel for the 1st respondent Bank will not be of any help to the 1st respondent in the circumstances of the case.
11. The learned Counsel for the appellant relies upon the decision in M.K. Prasad v. P. Arumugam, AIR 2001 Supreme Court 2497, wherein the Hon'ble Supreme Court held that even though the appellant before them appeared to be not as vigilant as he ought to have been, yet, his conduct did not, on the whole, warrant him to be castigated as an irresponsible litigant, and that his failure to adopt extra vigilance should not have been made a ground for ousting him from the litigation with respect to the valuable property. This decision to support the case of the appellant.
12. The learned Counsel for the 1st respondent contends that the application to set aside the order was filed out of time, and, therefore, is barred. But the contention of the learned Counsel for the appellant is that the appellant came to know of the final order on 22.1.2002 only when a received a copy of the order from the DRT. But the learned Counsel for the 1st respondent contends that in a case like this where the defendant had already entered appearance through Counsel, the defendant cannot say that he carne to know about the final order only on 22.1.2002 though the order was passed on 7.1.2002. But, this contention of the learned Counsel for the 1st respondent cannot be accepted. I have already pointed out that the erstwhile Counsel of the appellant/4th defendant had been appearing before the Tribunal till 21.9.2001. Thereafter he had not appeared till the final order was passed. I have also pointed out that the appellant had been contacting his Counsel to find out as to what was happening, and his erstwhile Counsel had merely informed him that some application was to be filed. Therefore, the appellant could not have known about the passing of the final order on 7.1.2002 in the circumstances of the case. Even otherwise the DRT has to send a free copy of the parties as per Sub-section (21) of Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and Rule 16 of the Debts Recovery Tribunal (Procedure) Rules, 1993, the DRT had sent a free copy of the impugned order passed by it to the appellant, and such a copy was received by the appellant/4th defendant only on 22.1.2002. The date of receipt of the copy of the order is not disputed by the learned Counsel for the 1st respondent. I have called for the file of the DRT concerned and have perused it, which shows that the application to set aside the ex parte order was filed on 20.2.2002, within 30 days from the date of receipt of copy of the order. Therefore, it cannot be stated that this application is barred by time. Therefore, this contention put forth by the 1st respondent cannot be accepted.
13. The learned Counsel for the 1st respondent put forward an alternative plea also without prejudice to the other contentions raised by him. He contends that if this Tribunal agrees with the appellant that he should be given an opportunity to put forth his case then, the appellant should be directed to deposit at least a portion of the suit claim since, according to him, about Rs. 8 crores and odd remain due. But the learned Counsel for the appellant/4th defendant contends that there is no need for such a direction inasmuch as three properties, one belonging to the company and two belonging to the directors, have been attached. But the learned Counsel for the 1st respondent contends that those properties do not belong to the appellant, and even otherwise the value of those properties will not be more than 50 lakhs. But, in the circumstances pointed out by me and in view of the fact that certain properties have been attached, I am of the view that it would not be in the interests of justice to direct the appellant to deposit a portion of the suit claim, and that it would be sufficient if costs are imposed upon the appellant.
14. Taking into consideration all the factors I hold that the ex parte final order passed on 7.1.2002 has to be set aside insofar as the appellant/4th defendant is concerned. However, in view of the inconvenience and the unnecessary expenses to which the 1st respondent has been put to, the appellant/4th defendant shall pay the 1st respondent a cost of Rs. 15,000/-.
15. Resultantly, the appeal is allowed setting aside the impugned order dated 25.2.2002 declining the prayer of the appellant/4th defendant to set aside the final order dated 7.1.2002. The said application will stand allowed and the ex parte final order dated 7.1.2002 will stand set aside insofar as the appellant/4th defendant is concerned. However, the appellant/4th defendant is directed to pay Rs. 15,000/- as costs to the 1st respondent Bank. The Presiding Officer of the concerned DRT will afford an opportunity to the appellant/4th defendant to file his written statement, and then dispose of the O.A. in accordance with law, after giving the plaintiff and the 4th defendant an opportunity to put forth their case.
Copy of the order be furnished to the appellant and to the 1st respondent.