The Appellate Tribunal dismissed the appeal challenging the setting aside of an ex parte order by the Debt Recovery Tribunal, finding that the appellants failed to prove sufficient cause for their non-appearance during the original recovery proceedings.
The Appeal MA 1/2021 is dismissed as devoid of merits with costs, and all pending IAs are closed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
MA 1/2021
IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI
Dated the 28th of September, 2022
PRESENT: Hon’ble Mr. Justice S. Ravi Kumar CHAIRPERSON
MA 1/2021
[MA 15/2018 in OA 89/2017 on the file of DRT-II, Bengaluru]
Between
Both 1 & 2 are residing at No.536, 16th Main,
Koramangala, Bangalore – 560 034.
Now at:
No.536, 16th Main, 3rd Block, Behind BDA Complex, Koramangala, Bangalore – 560 034.
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And
….. Respondents Counsel for Appellant : Mr. M. A. Rajendra Counsel for R1 Bank : Mr. P. V. Ramachandran Counsel for R2 : Sr. Advocate Mr. E.Omprakash for M/s. Thriyambak J. Kannan
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ORDER
First Respondent Bank herein filed OA 89/2017 for recovery of a sum of Rs.3,41,07,747/- together with interest at 13% p.a. with compounded yearly, from the date of filing of Original Application (OA) till realization. Tribunal below, by Order dated 03.03.2018, allowed OA, and granted Recovery Certificate.
Appellants herein, who are Defendants in OA, filed MA 15/2018 to reopen/ restore OA and recall Recovery Certificate dated 06.04.2018, for the reasons stated in Affidavit filed in support of Petition.
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First Respondent Bank herein opposed said Application mainly contending that Appellants are closely watching OA proceedings, and deliberately not participated in OA proceedings, and present Application is filed only to protract the proceedings.
Tribunal below, on a consideration of contentions and rival contentions of both parties, dismissed Application of Appellants through Order dated 18.03.2019.
Appellants herein filed Writ Petition Nos. 1088110885/2019 challenging Order dated 18.03.2019 of DRT, Bengaluru, and those Writ Petitions are disposed of by Order dated 11.06.2019, giving liberty to Appellants to file an Appeal before DRAT within a period of three weeks, and accordingly, this Appeal is filed within the time granted by Hon’ble High Court.
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During pendency of this Appeal, Auction Purchaser filed IA 724/2019 to implead himself as party to Appeal, and that Application is allowed on 09.10.2019, and as per orders in that IA, Auction Purchaser is impleaded as Respondent No.2 in Appeal.
3. Heard Learned Advocate for Appellants and Learned Advocate for Respondent Nos. 1 and 2.
4. Advocate for Appellants submitted that, Order of DRT-II,
Bengaluru, is against principles of natural justice, and Tribunal below ought to have given an opportunity to Appellants to contest OA. It is submitted, DRT, Bengaluru failed to appreciate circumstances under which Appellants could not appear before DRT to contest the matter, however, they have filed MA 15/2018 within 30 days from the date of passing of Final Order in OA. It is further submitted that claim of 1st Respondent Bank is contrary to RBI guidelines, and when sale of property is contrary to various judgements
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of Hon’ble Supreme Court, and Appellants have got a good case on merits, an opportunity may be given to Appellants to contest OA.
bona fide purchaser for a huge sum of Rs.12.92 Crores, and though entire amount is paid, and Sale Certificate is issued,
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Respondent No.2 is not enjoying the fruits of sale, as property is not delivered till today. He further submitted that, he would adopt the arguments of Advocate for Respondent No.1 Bank.
in OA filed Affidavit on his behalf and on behalf of Defendant Nos. 1 and 2 in support of relief claimed in MA 15/2018. Though Affidavit contains 11 paras, relevant para for the purpose of relief claimed in MA 15/2018 is in para 5. Further, MA 15/2018 is filed under Section 22 (2) (h) of Recovery of Debts and Bankruptcy Act (RDB Act), 1993, according to which, Tribunal and Appellant Tribunal, while discharging their functions, shall have same powers as vested in a Civil Court under the Code of Civil Procedure, 1908. As
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per Section 22 (2) (g) of RDB Act, 1993, for setting aside any order of dismissal of any application for default or any order passed by it ex parte , provisions of CPC can be invoked. For setting aside Decree or Order, relevant provisions of CPC is Order IX Rule 13, according to which, Defendants are given liberty to apply to Court which passed Decree or Order, to set aside and if Defendant satisfies the court that summons were not duly served or that they were prevented by any sufficient cause from appearing when the suit was called on for hearing .
8. Now, it may be relevant to examine para 5 of Affidavit to decide whether requirement of Order IX Rule 13 of CPC is complied with or not. Para 5 of Affidavit (original) reads as follows:-
“5. I state that non appearance on the date of hearing is due to bonafide reasons, since, subsequent to shifting of old aged parents, who are under medication, we could not
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able to engage a counsel to defend our case. Soon after we came to know that we have to appear before the Hon’ble Tribunal on the date of his hearing, which is allowed “Ex – parte”, we have immediately contacted the counsel and brief the facts. Hence, within 30 days from the date of allowing O.A., we have filed our Vakalathnama on 2nd April, 2018 along with requisite Court fees. We hereby undertake to submit all the medical reports of aged parents, who are under medication. Hence, prays to condone the delay and an opportunity may please be given, be exercising the inherent powers of this Hon’ble Tribunal on such other terms and conditions, which this Hon’ble Tribunal deems fit under the facts and circumstance of the case, reopen/restore the O.A. No. 89/2017.
6…………”
From a reading of above para, according to Defendants, they were not able to engage a Counsel to defend their case due to shifting of old aged parents, who are under medication. According to above para, immediately after knowing about ex parte Order, they contacted their Counsel and filed
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Application within 30 days from the date of allowing OA. That is the only reason on which Defendants prayed to set aside Order dated 03.03.2018 in OA 89/2017.
not appear for the reasons stated in para 5 of Affidavit, Tribunal is expected to examine those reasons, and if it is convinced with those reasons, relief can be granted, otherwise, not.
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Defendants were suffering from old age ailment, and that prevented them to appear before Court, to support that contention, medical reports of 1st Defendant were produced before Tribunal below, and Learned Presiding Officer, on examination of those reports, recorded a finding that one report shows that 1st Defendant was treated and discharged, on 18.05.2016, which was not during the course of proceedings of OA. As seen from record, OA is registered on 07.03.2017 and first hearing date is fixed on 17.06.2017. Therefore, as rightly recorded by Tribunal below, medical report, which shows that 1st Defendant was treated and discharged on 18.05.2016, is not during the course of proceedings in OA, thereby in no way relevant for absence of Appellants during OA proceedings.
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also in no way relevant for absence of Appellants during the course of OA proceedings. Tribunal below recorded the details of medical reports and contentions of Appellants, discarded them by giving reasons which are convincing and justifiable.
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[Dictated to Athistamani, PS transcribed by her, corrected, signed and pronounced by me in open court, this 28th of September, 2022]
Sd/- [ Justice S. Ravi Kumar ] CHAIRPERSON
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2 issues framed by the court
Whether the Appellants satisfied the requirement of Order IX Rule 13 of the Code of Civil Procedure to set aside the ex parte order of the DRT.
Whether the medical reports produced by the Appellants sufficiently explained their absence during the original application proceedings.
Sri Fazler Rahman and another
Bank of Baroda, Main Branch, Hassan
Mohammed Idress
S. Ravi Kumar
As recorded by the court registry
9 orders share this CNR
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