Dismissed

Mr Shivkumar Chaudhary v. State Bank of India

DRAT21 Oct 2022MISC APPEAL/28/2022

Case brief

AI extract

What is this about?

In Misc. Appeal No. 28/2022, the Tribunal dismissed the appeal against the order closing the defense stage due to late filing of written statement. The court relied on statutory intent and precedent to refuse extension beyond the prescribed limit, upholding the strict timeline.

What did the court decide?

The appeal was dismissed, and the impugned order of the Ld. Presiding Officer was upheld.

Mr Shivkumar Chaudhary versus State Bank of India — Banking and Recovery | DRAT (2022)

¶1

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson

¶2

Misc. Appeal No. 28/2022

¶3

Between

¶4

Mr Shivkumar Chaudhary & Ors.

¶5

… Appellant/s

¶6

V/s.

¶7

State Bank of India & Ors.

¶8

…Respondent/s

¶9

Ms. Hema Desai, i/b M/s. Singhi & Co., Advocate for the Appellants.

¶10

-: Order dated: 21/10/2022:-

¶11

The Appeal impugned order dated 19.01.2018 passed by the Ld. Presiding Officer D.R.T.-I, Ahmedabad in O.A. No. 431 of 2016.

¶12

The Appellants are Defendants No. 6, 7 and 8 in the aforesaid Original Application filed by the first Respondent State Bank of India. Respondents Nos. 2 to 12 are Defendants Nos. 1 to 5 and 9 to 14 in the aforesaid I.A. The second Respondent is the principal debtor company which had borrowed money from the first Respondent and other consortiums of the Banks. The Appellants were the guarantors for the loan. The contention of the Appellants is that they were discharged from their guarantee and substituted by Respondents Nos. 7 and 8. The first Appellant appeared in the proceedings before the D.R.T.-I, on 21.08.2016 and Appellants Nos. 2 and 3 had appeared on 07.12.2016 on receipt of summons. They did not file written statements on time as stipulated under Sec. 19(5) (i) of the Recovery

¶13

of Debts and Bankruptcy Act, 1993 (‘RDB Act’, for short). On 21.09.2017 the learned Presiding Officer closed the stage of filing a written statement by the Appellants. On 19.01.2018 the Appellants filed exhibit R-27 to R-29 requesting their written statements to be received after condonation of delay. The said prayer was declined by the learned Presiding Officer vide the impugned order. The Appellants are aggrieved and hence in Appeal.

¶14

None appeared for the Respondents. The learned counsel for the Appellants Ms Hema Desai was heard, and records were perused.

¶15

The only question arising for consideration in this Appeal is whether the delay in filing the written statement could be condoned by the D.R.T. It would be helpful to go through the provisions of the RDB Act. Section 19(5) (i) read thus-

¶16

“(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:

¶17

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 extending fifteen days to file the written statement of his defence;”

¶18

The section was amended in 2016 and prior to the substitution subsection (5) to Section19 read as under:-

¶19

“Provided that where the defendant fails to file the written statement within the said period of thirty days, the Presiding Officer

¶20

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.”

¶21

It would be also worthwhile to have a look at the relevant provisions of Rules 12 (1), (2), and (3) of Debts Recovery Tribunal (Procedure) Rules, 1993 (‘DRT Rules’, for short) which read thus-

¶22

“ 12. Filing of written statement and other documents by the defendants and by the applicant as a reply to the written statement -(1) The defendant may, within a period of thirty days from the date of service of summons, file two complete sets of written statement including claim for set-off or counter claim, if any, along with documents in a paper book form.

¶23

(2) A copy of the written statement filed under sub-rule (1) shall be served to the applicant.

¶24

(3) If the defendant fails to file the written statement of his defence, including claim for set-off or counter-claim under sub-rule (1), if any, within the period of thirty days, the Presiding Officer may in exceptional cases and special circumstances to be recorded in writing, extend the period, by such further period not exceeding fifteen days.”

¶25

This Rule was also amended and substituted in 2016 which prior

¶26

to the amendment read thus-

¶27

“12. Filing of reply and other documents by the defendant .—(1) The defendant may file two complete sets containing the reply to the application along with documents in a paper book form with the registry within one month of the service of the notice of the filing of the application on him.

¶28

(2) The defendant shall also endorse one copy of the reply along with documents as mentioned in sub-rule (1) to the applicant.

¶29

(3) The Tribunal may, in its discretion on application by the defendant, allow the filing of reply referred to in sub-rule (1), after the expiry of the period referred to therein.”

¶30

From the reading of the relevant section and rule, it is adequately

¶31

clear that the intention of the legislation was not to grant an extension

¶32

of time beyond 15 days from the original thirty days stipulated for filing of the written statement. The amendment in 2016 has made these provisions more stringent. The Hon’ble Apex Court has in Standard Chartered Bank V/s MSTC Ltd (2020) 13 SCC 618 held that the D.R.T. cannot invoke the provision of Section 5 of the Limitation Act to extend the time fixed by statute. The Hon’ble Apex Court was considering the extension of time sought in filing an application for review under Rule 5-A of the DRT Rules. When the statute leaves no room for ambiguity regarding the power of the D.R.T. in granting an extension of time to file a written statement. The intention of this special statute is to expedite the disposal of recovery cases concerning financial institutions and banks. I am therefore of the opinion that the impugned order cannot be interfered with. The learned counsel for the Appellant relief upon the decision Kailash V/s Nankhu & Ors (2005) 4 SCC 480 wherein the Hon’ble Apex Court has observed that all rules of procedures are the handmaid of justice and that in an adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. But it is also observed that unless compelled by the express or specific language of the statute, the provision of C.P.C. or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice.

¶33

The aforesaid decision of the Hon’ble Apex Court can only be construed against the Appellant since the intention of the legislature

¶34

in the RDB Act and DRT Rules is explicitly against granting an extension of time in filing a written statement beyond time.

¶35

Sd/Chairperson

¶36

mks-01

Mr Shivkumar Chaudhary v. State Bank of India

Case brief

What is this about?

What did the court decide?

Mr Shivkumar Chaudhary v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

All orders in this case

Similar cases

Pravin P Banavalikar versus State Bank of India

Pravin Padmakar Banavilikar versus State Bank of India

Axis Bank Ltd. and Anr. versus Messr Jay Textiles and Ors.

Dena Bank versus Shri Shashi Ramakrishnan Nair & Ors.

Mrs Kanchanmala Raju Joshi versus Gif Housing Finance Ltd.

Shri Premkumar Devandas Kishnani versus Canara Bank