Debt Recovery Appellate Tribunal - Delhi
Shiv Ganga Organic Chemicals Ltd. And ... vs State Bank Of Bikaner And Jaipur on 3 October, 2003
Equivalent citations: III(2004)BC123
ORDER
K.S. Kumaran, J. (Chairperson)
1. Respondent-State Bank of Bikaner & Jaipur (hereinafter referred to as 'the respondent-Bank') filed O.A. 200/2001 before the Debts Recovery Tribunal, Delhi-II (hereinafter referred to as 'the DRT) against the appellants herein (who were defendants 1 to 3, 5 and 6, respectively; hereinafter referred to as 'the appellants/defendants') and Anil Kumar Gupta (4th defendant) for the recovery of Rs. 1,38,81,986.66 with interest and costs.
2. The learned Presiding Officer of the DRT passed the final order dated 29.4.2002, directing the appellants/defendants to pay the said amount with interest and costs, but dismissed the O.A. as against the 4th defendant. The learned Presiding Officer of the DRT observed that the defendants, in spite of numerous opportunities, did not file the written statement and, therefore, they are deemed to have admitted the averments in the O.A. and held that the respondent-Bank is entitled to the Recovery Certificate, as indicated above. The appellants/defendants then filed a Miscellaneous Application to set aside the final order, but the learned Presiding Officer of the DRT dismissed their application by the impugned order dated 5.7.2002. Aggrieved, the defendants 1 to 3, 5 and 6 have come forward with this appeal. The respondent-Bank has filed a suitable reply opposing the appeal.
3. I have heard the learned Counsels for both the sides, and perused the records.
4. Before I proceed to consider the rival contentions, I will first set out the details of certain dates and orders passed by the learned Presiding Officer of the DRT, which, ultimately, led to the passing of the final order.
5. On 5.9.2001, the learned Presiding Officer of the DRT directed the issue of show cause notice to the defendants in the O.A. directing them to file the written statement within 30 days, and ordered the case to be listed for 31.10.2001.
6. On 31.10.2001, Mr. Purushottam Singh, Advocate appeared for defendants 1, 2 and 4 to 6, whereas none appeared for the 3rd defendant. It was reported that the 3rd defendant was lodged in Tihar Jail at that time. Fresh notice was ordered to be issued to the 3rd defendant and the Counsel for the respondent-Bank was directed to furnish copies to the other defendants. The O.A. was listed for hearing on 8.11.2001.
7. On 8.11.2001, the Counsel for the respondent-Bank reported that notice could not be served. Frsesh notice was ordered to be issued to the 3rd defendant, who remained lodged in the Tihar Jail at that time, and the matter was ordered to be listed on 10.12.2001. The order dated 8.11.2001 passed by the DRT shows that the documents were received by the other defendants only on that date, and that they were given four weeks' time to file the written statement.
8. On 10.12.2001, the 3rd defendant was produced by the Police from the Tihar Jail after the matter had been adjourned to 18.12.2001 and, therefore, was directed to be produced again on 18.12.2001. On 10.12.2001 also, the Counsel for the respondent-Bank was directed to supply the documents to the defendants within a week.
9. On 18.12.2001, the copies and documents were supplied to the Counsel for the 3rd defendant, who appeared on that date. The other defendants were stated to have received the documents already. The defendants were directed to file the written statement within 30 days' time, and the matter was adjourned to 24.1.2002. The 3rd defendant was produced subsequently by the Police, and the Police was directed not to produce him for the next date of hearing as the Counsel had entered appearance.
10. On 24.1.2002, the Registrar of the DRT granted four weeks' further time to file the written statement, and adjourned the matter to 5.3.2002.
11. On 5.3.2002, since the written statement had not been filed, the Registrar directed that the O.A. be placed before the learned Presiding Officer of the DRT on 29.4.2002 for further orders. As pointed already, on 29.4.2002, the learned Presiding Officer of the DRT passed the final order.
12. The appellants/defendants filed an application to set aside the above-said final order dated 29.4.2002, urging that the 2nd defendant is old, suffering from serious heart problem since January, 2001 and was bed-ridden. They also urged that the 3rd defendant was under detention by virtue of the order dated 10.8.2001, and was still in jail. They further urged that defendants 2, 5 and 6 were busy in taking steps for getting the 3rd defendant released, and that even the Counsel for the defendants was not well on 18.12.2001. Therefore, they urged that they could not file the written statement and requested that the order may be set aside and they may be allowed to participate in the proceedings. But, the teamed Presiding Officer of the DRT observed that the detention of the 3rd defendant in jail for the period from August, 2001 to 4.6.2002, and the alleged illness of the 2nd defendant cannot be grounds for setting aside the final order, and dismissed the said application.
13. The learned Counsel for the appellants/defendants contends that the intentions of the appellants/defendants were not to delay or protract the proceedings, but it was due to these reasons beyond their control, they could not file the written statement. But, the learned Counsel for the respondent-Bank contends that the final order dated 29.4.2002 passed against the defendants was not an ex parte order, but was passed due to the fact that the defendants had not filed the written statement. He contends that the defendants were not set ex parte, but were deemed to have admitted the averments in the O.A. by not choosing to file the written statement. He, therefore, contends that the final order, being not an ex parte order, the application to set aside the same, as if it is an ex parte order, is not maintainable.
14. The learned Counsel for the appellants/defendants, on the other hand, contends that even though the final order was passed by the learned Presiding Officer of the DRT as the defendants had not filed the written statement, the application to set aside the same, as if it was an ex pane order, is maintainable. In support of his contention, he relies upon the decision in Gujarat Co-Op. Oil Seeds Growers Federation v. Ramesh Kanta Jain, AIR 1994 Delhi 367, wherein it was held as follows:
"In our opinion, the provisions of Order IX, Rule 13 of the Civil P.C. are applicable to the order passed under Order VIII, Rule 10, the authorities cited by the learned Counsel for the appellant AIR 1981 Madras 258, AIR 1985 Kant 77, AIR 1988 Kerala 161 and 304, AIR 1987 SC 42 and AIR 1988 SC 1381 are to the point. Learned Counsel for the respondent is unable to dispute the legal proposition of law laid down in the aforesaid judgments. The impugned order is liable to be set aside."
The learned Counsel for the appellants/defendants relies upon the decision in Narendra Patra v. Shiba Narayan Taldi, AIR 1995 Orissa 45, wherein it was held as follows:
"A decree is drawn up in such a case after pronouncement of judgment, under Rule 10 of Order 8. A decree passed under the Rule for defendant's default in filing a written statement is none-the-less an ex parte decree coming within the purview of Order 9, Rule 13 and, therefore, an application to set aside such a decree under Rule 13 of Order 9 is maintainable. In the premises, as aforesaid, I have no hesitation to come to the conclusion that the impugned decree in the case in hand is an ex parte decree and an application to set aside the same under Rule 13 of Order 9, Code of Civil Procedure, is entertainable."
The learned Counsel for the appellants/defendants also relies upon the decisions in M. Manick Peter v. K. Surendranathan, AIR 1988 Kerala 161; A.K.P. Haridas v. V.A. Madhavi Amma, AIR 1988 Kerala 304; Kuvarp Industries, Bangalore v. State Bank of Mysore, AIR 1985 Karnataka 77 and N. Jayaraman v. Glaxo Laboratories Ltd., AIR 1981 Madras 258, also in support of his contention that even a final order, which was passed on account of non-filing of the written statement, should also be considered as an ex parte final order and, therefore, an application to set aside the said ex parte final order is maintainable.
15. I agree with the learned Counsel for the appellants/defendants in this respect. These decisions relied upon by the appellants/defendants support his contention. Therefore, I am of the view that the application filed by the appellants/defendants before the DRT to set aside the final order dated 29.4.2002 as if it is an ex parte final order is maintainable.
16. The learned Counsel for the respondent-Bank relied upon the decisions in Director of Settlements A.P. and Ors. v. M.R. Apparao and Anr., II (2002) SLT 778=(2002) 2 SCR 661; Balraj Taneja and Anr. v. Sunil Madan and Anr., VIII (1999) SLT 65=IV (1999) CLT 362=(1999) Suppl. 2 SCR 258; Union of India and Anr. v. Delhi High Court Bar Association and Ors., II (2002) SLT 556=II (2002) BC 194 (SC)=(2002) 2 SCR 450. But, the learned Counsel for the appellants/defendants rightly points out that these decisions do not support the contention of the respondent-Bank that the final order passed in this O.A. is not an ex parte final order or that an application to set aside that ex parte final order is not maintainable. I agree with the learned Counsel for the appellants/defendants in this respect.
17. The next question is whether the request of the appellants/defendants that they should be given an opportunity to file the written statement and have the case decided on merits can be accepted.
18. The reasons given by the appellants/defendants are that the 2nd defendant is old, has heart problem and was bed-ridden, while the 3rd defendant was in Tihar Jail in view of the detention order dated 10.8.2001, till he was released on 4.6.2002, and that the other defendants were busy taking steps to get him released.
19. In support of the contention that the appellant/2nd defendant was ill and had heart problem, the appellants/defendants have produced the copies of the prescriptions and the doctor's certificate. The copies of the prescription produced show that he had been taking treatment from 13.1.2001. The appellants/defendants have also produced copied of certain ECG and other reports. It is seen that he had been taking treatment in February and March, 2001 also. They have also produced the copy of the prescription dated 25.8.2001, and also the copy of the doctor's certificate dated 6.9.2001 to the effect that the appellant/2nd defendant needed rest for three weeks from 6.9.2001. The appellants have also produced copies of certain prescriptions issued during January, 2002 to February, 2002. By pointing out these documents, the learned Counsel for the appellants/defendants contends that the appellant/2nd defendant, being a sick and old man, was unable to give instructions to file the written statement in time. But, the learned Counsel for the respondent-Bank contends that it is doubtful that some of the documents relate to the 2nd defendant since the name of the patient has been mentioned as Sumer Chand Garg, and since the age has also been given as 65. He further contends that even the documents produced by the appellants/defendants do not show that the appellant/2nd defendant needed bed rest or that he was confined to bed all the time. He contends that even if he was taking treatment, that could not have prevented him from filing the written statement.
20. We find that the 2nd defendant is not only old but is also having some heart problem and, he has undergone certain tests like ECG and Ultrasound also. He had been advised complete rest, of course, for a certain period. But, taking into consideration the fact that he is old and is having heart problem, I am of the view that the contention of the appellants/ defendants that due to these reasons, he could not give instructions to file the written statement in time can be accepted.
21. I am of the view that the respondent-Bank cannot take advantage of the fact that the name given in some of the documents as Sumer Chand Garg instead of Sumer Chand Gupta, and the age as has been given as 65 instead of 75. In the reply filed to the appeal, the respondent-Bank has not specifically stated that the 2nd defendant was not ill or that these documents do not relate to him.
22. So far as the appellant/3rd defendant is concerned, it is evident from what I have pointed out above that he remained lodged in Tihar Jail by order of the Government dated 10.8.2001. He was released on 4.6.2002. Therefore, the learned Counsel for the appellants/ defendants contends that from the jail he could not give proper instructions to the Counsel to file the written statement and, therefore, he had also good reasons for not filing the written statement in time.
23. So far as the other defendants are concerned, it is seen that the 5th defendant is the wife of the appellant/2nd defendant, and the mother of the 3rd defendant. The learned Counsel for the appellants/defendants contends that she is an old illiterate lady and, therefore, the appellants/defendants through her, could not give instructions to file the written statement.
24. The learned Counsel for the appellants/defendants points out that while the ex parte final order has been passed on 29.4.2002 the appellants/defendants had filed the application to set aside the same in May, 2002 itself and, therefore, it cannot be stated that the intentions of the appellants/defendants were mala fide or that they wanted to drag on the proceedings.
25. I also find that the application to set aside the ex parte final order is dated 13.5.2002. Therefore, it is evident that the appellants/defendants have approached the DRT without any undue delay for setting aside the ex parte final order. As pointed out already, it is evident that the 2nd defendant is old and is also a sick man, while the 3rd defendant remained lodged in jail. The contention of the appellants/defendants that the other defendants were also anxious and busy in getting the 3rd defendant released from the jail and, in these circumstances, the written statement could not be filed.
26. I agree with the learned Counsel for the appellants/defendants in this respect, and I am of the view that though there is nothing to show that the appellant/2nd defendant was throughout bed-ridden, it is evident that he is sick and having some heart problem. He is also an old man. Considering the fact that the 3rd defendant was in jail, the contention of the learned Counsel for the appellants/defendants that the other defendants were anxious and busy in taking steps for getting him released, cannot be said to be unreasonable or unacceptable. The 5th defendant is an old lady. Therefore, in these circumstances, I am of the view that the action or inaction on the part of the appellants/defendants does not indicate that they intended to drag on the proceedings or that they were acting mala fide. Therefore, I am of the view that the appellants/defendants should be given an opportunity to contest the O.A. on merits by setting aside the ex parte final order and allowing them to file the written statement.
27. Of course, the learned Counsel for the respondent-Bank contends that the appellants/ defendants have not paid the proper Court fee on this appeal. He contends that the payment of Rs. 10/- as Court fee on the appeal is not proper. He contends that as per Rule 8 of the Debts Recovery Appellate Tribunal (Procedure) Rules, 1994 (hereinafter referred to as 'the Appellate Rules'), the appellants/defendants have to pay the fee on the basis of the amount involved in the O.A. and, therefore, should have paid a Court fee of Rs. 30,000/- on the appeal. He states that, the appellants/defendants should have at least paid the minimum Court fee of Rs. 12,000/-. But, the learned Counsel for the appellants/defendants, on the other hand, contends that this is not an appeal against the final order challenging the amount decreed in the O.A., but is only an appeal against an order declining the request of the appellants/defendants to set aside the ex parte final order and, therefore, Court fee need not be paid on the value of the O.A. or on the basis of the amount for which the Recovery Certificate has been issued. He contends that there is no specific provision regarding the Court fee payable on such appeals in the said Appellate Rules and, therefore, the Court fee paid on the application for an interlocutory order filed before the DRT has to be paid for the appeal against the said order. He points out that Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993 (hereinafter referred to as the 'DRT Rules') prescribes only a fee of Rs. 10/- on an application for an interlocutory order and, therefore, the same Court fee has to be paid on an appeal against the said order also, in the absence of any specific provision in this behalf in the Appellate Rules.
28. I agree with the learned Counsel for the appellants/defendants in this regard. This is not an appeal against the final order/Recovery Certificate. Therefore, the appellants/ defendants cannot be asked to pay Court fee on the basis of the amount ordered to be recovered as per the final order/Recovery Certificate. So, the contention that the appellants/ defendants have to pay a Court fee of Rs. 30,000/- or the minimum of Rs. 12,000/- cannot be accepted. There is no specific provision in Rule 8 of the Appellate Rules prescribing the fee payable for an appeal against an interlocutory order. Therefore, as rightly contended by the learned Counsel for the appellants/defendants, the same Court fee prescribed by DRT Rules for an application for an interlocutory order, namely, Rs. 10/- has to be paid on the appeal also. Therefore, the contention that the appellants have not paid the proper Court fee cannot be accepted.
29. The learned Counsel for the respondent-Bank next contends that the appellants/ defendants have not complied with the provisions of Section 21 of the Act by depositing 75% of the amount determined by the DRT in the final order. He also points out that the appellants/defendants have not filed any application seeking waiver of such deposit. He, therefore, contends that the appeal cannot be entertained. But, the learned Counsel for the appellants/defendants, on the other hand, contends that this being not an appeal against the final order/Recovery Certificate, but being an appeal against the order declining the request of the appellants/defendants to set aside the ex parte final order, there is no need to comply with the provisions of Section 21 of the Act. In this regard, he relies upon the decision of this Tribunal in Almania Foods and Ors. v. Catholic Syrian Bank, Miscellaneous Appeal 256/ 2001 etc., dated 26.6.2002. This decision clearly supports the contention of the learned Counsel for the appellants/defendants. This Tribunal, after elaborately considering the provisions of this Act and also the contentions advanced by the parties, held that in appeals of this kind, the question that is being considered is not the determination of the debt. This Tribunal also held that an application seeking setting aside of the ex parte decree does not challenge the merits of the final order and that while considering such an application, the Tribunal does not go into the merits of the application for recovery whereas it only considers whether the ex parte decree was made without service or whether the defendants were absent due to just reasons. This Tribunal also held that in an appeal against that order, this Tribunal would also consider only that question, and that the merits of the application for recovery or determination of the debt is not under consideration of the Tribunal. After considering all these aspects, this Tribunal held that the provisions of Section 21 of the Act are not attracted to an appeal of this kind.
30. This decision supports the contention of the appellants/defendants that there is no need to comply with the provisions of Section 21 of the Act in an appeal of this sort.
31. In these circumstances, I am of the view that the impugned order dated 5.7.2002 passed by the DRT concerned has to be set aside and the application filed by the appellants/ defendants before the DRT to set aside the ex parte final order dated 29.4.2002 will have to be allowed, thereby giving them an opportunity to file the written statement so that they may have the O.A. decided on merits.
32. But, the O.A. is of the year2001 and the claim made therein is for Rs. 1,38,81,986.66. The appellants/defendants had not filed the written statement though opportunities were given to them. Therefore, in my view, the ex parte final order should be set aside on the condition that the appellants/defendants deposit a sum of Rs. 20 (twenty) lakhs with the respondent-Bank, and also pay a sum of Rs. 10,000/- as costs to the respondent-Bank inasmuch as the respondent-Bank has been put to unnecessary inconvenience and expenses.
33. The sum of Rs. 20 lakhs shall be deposited by the appellants/defendants with the respondent-Bank within ten weeks from the date of this order. The cost of Rs. 10,000/-should also be paid within the said period.
34. Accordingly, the appeal is allowed, setting aside the impugned order dated 5.7.2002. Consequently, the application filed by the appellants/defendants before the DRT to set aside the ex pane final order dated 29.4.2002 will stand allowed.
35. This is subject to the condition that the appellants/defendants should deposit a sum of Rs. 20 (twenty) lakhs into the respondent-Bank within 10 weeks from today and also pay the cost of Rs. 10,000/- to the respondent-Bank within the said period. The said sum of Rs. 20 lakhs shall be kept by the respondent-Bank in a separate interest-bearing account. The learned Presiding Officer of the DRT shall pass appropriate orders with regard to the disbursement of this amount, subject to the result of the O.A. and in accordance with law. If the sum of Rs. 20 lakhs is not deposited and if the cost of Rs. 10,000/-is not paid as directed within the time specified above, the appeal shall be deemed to have been dismissed.
36. If the deposit and the payment of the cost, as directed above, are made within the specified time, the learned Presiding Officer of the concerned DRT shall take back the O.A. 200/2001 to file, give an opportunity to the appellants/defendants to file their written statement. The learned Presiding Officer of the DRT may also give an opportunity to the respondent-Bank to file the replication, if any, and then dispose off the O.A. in accordance with law, after giving both the sides an opportunity to put forward their case, in accordance with law.
37. The parties, through their Counsel, are directed to appear before the concerned DRT on 8.1.2004 for taking further directions in this matter from the said DRT.
Miscellaneous Applications 533/2002, 144 and 197/2003
38. These are applications for stay of further proceedings/recovery proceedings in pursuance of the final order. In view of the order passed in the appeal, the proceedings in execution will stand stayed for a period of ten weeks from today. If deposit of the amount and payment of the costs, as directed in the appeal, are made within ten weeks from today, then the execution proceedings shall cease (subject to the final order that may be passed in the O.A.) If the deposit and the payment of the costs are not made within the period as specified in the appeal, then the stay shall stand vacated. These applications are ordered accordingly.
39. Copy of this order be furnished to the appellants/defendants, the respondent-Bank and also be forwarded to the concerned DRT and the Recovery Officer.