Dismissed

M/s Indian Bank v. Ece Industries Ltd. and Ors.

DRAT20 Jul 2022REGULAR APPEAL/427/2013

Case brief

AI extract

What is this about?

The tribunal affirmed that a second review is not maintainable under Order 47 Rule 9 CPC. However, recognizing that the impugned order disallowed the respondent's claim based on a mistake, the court dismissed the appeal but granted liberty to the appellant to prefer an appeal against the earlier order allowing the review.

What did the court decide?

The appeal is dismissed, but liberty is granted to the Appellant to prefer an appeal against the order dated 11th November, 2002 in M.A. 119 of 2002 before the appropriate forum.

M/s Indian Bank versus Ece Industries Ltd. and Ors. — Banking and Recovery | DRAT (2022)

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Appeal No. 427 of 2013 DRAT-Kolkata

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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(Appeal No. 427 of 2013)

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(Arising out of M.A. 119 of 2002 in O.A. 102 of 1995 in DRT, Hyderabad)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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Indian Bank, a Nationalised Bank and a Body Corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act V of 1970, carrying on the business of Banking and having its Head Office at No.66, Rajaji Salai, Chennai – 600 001 and having its Branch at Kakatiya Nagar, Hyderabad and now transferred to the Asset Recovery Management Branch 36365 4^th Floor, Liberty Plaza, Himayat Nagar, Hyderabad-500 029.

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… Appellant

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-Versus-

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M/s. ECE Industries Limited (formerly known as A.P. Electrical Equipment Corporation), Ashok Marg, Sanatnnagar, Hyderabad;

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Blue Shield Packing Private Limited, Registered Office at Plot No. 25, C.I.E.E., Gandhinagar, Balanagar, Hyderabad;

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M.A. Bari, H. No. 13-5-146, Karwan Sahu, Hyderabad;

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Mohd Nayamtullah, H. No. 13-5-146, Karwan Sahu, Hyderabad;

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Mir Quershid Ali, son of Mir Ameer Ali, H. No. 13-5-146, Karwan Sahu, Hyderabad;

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Smt. Ujala Begum (Deceased), W/o Mohd. Ahmatullah Khan, 20-2480, Jawahar Galli, Hyderabad;

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Mrs. Sabina Begum (Deceased) W/o Sajad Khaja Ali, 13-5-146, Karwan Sahu, Hyderabad;

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M.A. Razack (deceased), legal heir MA Bari, 13-5-146, Karwan Sahu, Hyderabad;

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M.A. Quadeer, H. No.13-5-146, Karwan Sahu, Hyderabad;

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M.A. Mannan, H. No. 13-5-146, Karwan Sahu, Hyderabad;

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M. A. Ahmedulla, H. No. 13-5-146, Karwan Sahu, Hyderabad;

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M/s. ECG Park, Opposite Telephone Exchange, 9-35-8, Kothapet, Hyderabad;

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M/s. Bio Vaccines Pvt. Ltd... Survey No.332, Mudimagal Chevella Tq., R.R. District.

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… Respondents

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Appeal No. 427 of 2013 DRAT-Kolkata

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Counsel for the Appellant Bank … Mr. Debasish Chakrabarti with Ms. Sharmistha Pal

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Counsel for Respondents … Mr. Sarathi Dasgupta with Mr. Asoke Basu

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None for Respondent No. 3

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JUDGMENT : 20^th July, 2022

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THE APPELLATE TRIBUNAL :

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The instant appeal is preferred by the Appellant Bank against the judgment and order dated 11^th November, 2002, passed by the Learned Debts Recovery Tribunal, Hyderabad in M.A. 119 of 2002 arising out of O.A. 102 of 1995 whereby the review petition filed by the Appellant was dismissed by the Presiding Officer.

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2. O.A. 102 of 1995 was filed by the Appellant Bank against Blue Shield Packaging Private Limited (presently known as ECE Industries Limited) and 12 Others for recovery of Rs.15,31,940.44p with pende lite interest at the rate of 20.75% per annum with quarterly rests. 3. The appeal was contested by Blue Shield Packaging Private Limited (at present known as M/s. ECE Industries Limited) and its Managing Director, Mr. M.A. Bari. A decree was passed against Defendants No. 1 to 10 to pay an amount of Rs.15,31,940.14p with costs and pendent lite interest at the rate of 20.75% per annum with quarterly rests; out of which Defendant No. 11 was directed to make a payment of Rs.3,22,996.60p, Defendant No. 12 Rs.2.97,953.00 and Defendant No. 13 Rs.5,42,459.00 with costs and pendent lite interest at the rate of 20.75% per annum with quarterly rests.

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4. A.P. Electrical Equipment Corporation (Respondent No. 1 in this appeal), who is presently known as ECE Industries Limited, preferred a writ petition, bearing No. W.P. 237 of 1999, against the judgment, passed in O.A. 102 of 1995 dated 24^th February, 1998 before the Hon’ble High Court of Hyderabad, which was decided by a Division Bench on 11^th September, 2000. The Hon’ble Hyderabad High Court

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Appeal No. 427 of 2013 DRAT-Kolkata gave an option to the petitioner to prefer an appeal against the order dated 24^th February, 1998 made by the Debts Recovery Tribunal in O.A. 102 of 1995 before the appropriate authority. Further, benefit of Section 14 of the Limitation Act was also granted to the petitioner for condonation of delay in preferring the appeal.

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5. In compliance of the order of the Hon’ble Hyderabad High Court dated 11^th September, 2000, passed in W.P. 237 of 1999, the petitioner did not prefer the appeal. In the meantime, Applicant Bank initiated a proceedings for recovery which was also confirmed by the Debts Recovery Tribunal, Hyderabad.

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6. Thereafter, the petitioner, ECE Industries Limited -vs- Indian Bank, preferred another writ petition, being W.P. 11885 of 2001 before the Hon’ble Hyderabad High Court wherein the following prayer was made :

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“Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed herein the High Court will be pleased to issue an order, direction or writ particularly one in the nature of writ of mandamus directing the 1^st Respondent to consider the petitioner’s representation dated 1.6.2001 in terms of the Reserve Bank guide lines for One Time Settlement in respect to the petitioner’s due in O.A. No. 103 of 1995 on the file of the Debt Recovery Tribunal, Banagalore.”

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7. The Hon’ble Hyderabad High Court decided the writ petition on 15^th of April, 2002 wherein the Hon’ble Hyderabad High Court passed the following judgment:

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“The defendant No. 11 in O.A. 102 of 1995 on the file of the Debt Recovery Tribunal, Bangalore is the petitioner in this writ petition.

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The controversy is very limited. The petitioner was impleaded a defendant No. 11 only on the allegation that an amount of Rs.3,27,886/- is with it under a bill payable to the original borrower.

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Appeal No. 427 of 2013 DRAT-Kolkata

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On adjudication of the matter, the Tribunal below passed an order against defendants 11 to 10 jointly and severally, since they are the borrowers or guarantors, as the case may be. So far as defendant No. 11i.e. the petitioner herein is concerned, the order directs that it shall pay an amount of Rs.3,27,886/- with interest at 20.75% with quarterly rests. The petitioner is aggrieved by this direction.

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Heard Sri Koka Satynarayana Rao, learned Counsel for the petitioner.

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On the face of it, the order does not appear to be correct in so far as the direction as to interest with quarterly rests is concerned. The question of payment of interest that too at quarterly rests, would arise only against the borrower or the guarantor, that too on the basis of the terms of the contract. The bank does not plead any contract with the petitioner herein. Therefore, the awarding of interest as well as the fixation of intervals against the petitioner on par with the borrowers or the guarantors cannot be sustained in law.

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However, this court cannot undertake the adjudication into that. Howsoever palpable mistake may appear to me, the only course to be open to the petitioner is to approach the concerned Tribunal with an application under Section 152 of C.P.C. or under Order 47 Rule 1 of C.P.C. as the case may be.”

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8. Subsequently, ECE Industries Limited, Respondent No. 1 in this appeal, filed an M.A., being M.A. 119 of 2002, in O.A. 102 of 1995 (ECE Industries Limited -vs- Indian Bank & Others) with a prayer that orders passed in O.A. are contrary to law and there is an apparent error on the face of the record. Accordingly, order dated 24^th February, 1998 should be reviewed.

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9. M.A. 119 of 2002 was allowed by the Learned Presiding Officer, Debts Recovery Tribunal, Hyderabad on 11^th November, 2002 and it was held that the order, passed in O.A. 102 of 1995 dated 24^th February, 1998, was erroneous, accordingly it was reviewed and the

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Appeal No. 427 of 2013 DRAT-Kolkata

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claim against the petitioner, i.e. ECE Industries Limited, was disallowed.

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10. Being aggrieved by the impugned order, Appellant, i.e. Indian Bank, filed a review petition, being No. 2 of 2002 in M.A. 119 of 2002 in O.A. 102 of 1995 which was decided by the Learned Presiding Officer, Debts Recovery Tribunal, Hyderabad on 26^th October, 2006 wherein the Review Petition was dismissed on the ground that Debts Recovery Tribunal, Hyderabad cannot review its own order for second time and only remedy left with the petitioner is to prefer an appeal. Against this order, present appeal is preferred by the Appellant.

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I have heard the Learned Counsel for the parties and perused the record.

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11. Learned Counsel for the Appellant submits that the impugned order is bad in law. Learned Counsel submits that Respondent No. 1 has not preferred an appeal as per the directions of the Hon’ble Hyderabad High Court, passed in W.P. 237 of 1999, hence, the order passed by the Tribunal below, on 24^th February, 1998, attains finality. It is further submitted that the judgment of the Hon’ble Hyderabad High Court in W.P. 11885 of 2001 (ECE Industries Limited -vs- Indian Bank) specifically provides that the petitioner, i.e. ECE Industries Limited, may approach the concerned Tribunal with an application under Section 152 of the Code of Civil Procedure and Order 47 Rule 1 of the Code of Civil Procedure. It is submitted that the order, passed by Learned Tribunal in M.A. 119 of 2002 on 11^th November, 2002, is beyond the scope of Order 47 Rule 1 of the Code of Civil Procedure or Rule 5A of the Debts Recovery Tribunal Procedure Rules, 1993. It is further submitted that Learned Tribunal below has exceeded its jurisdiction in entering into the merits of the case in application for review. Learned Tribunal below has overruled its own finding regarding liability of payment by the ECE Industries Limited to the Bank.

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12. It is further submitted that in the order dated 26^th October, 2006 in Review Petition No. 2 of 2004, Learned Presiding Officer, Debts

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Appeal No. 427 of 2013 DRAT-Kolkata Recovery Tribunal, Hyderabad has given an option to the Appellant to prefer an appeal against the order dated 11^th November, 2002 in M.A. 119 of 2002. It is further submitted that Learned Tribunal below had transgressed its jurisdiction in passing the order dated 11^th November, 2002 in the Review Petition, being M.A. 119 of 2002.

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13. Learned Counsel for Respondents submits that the instant appeal is devoid of any merits and liable to be dismissed. Learned DRT was well within its jurisdiction to pass the impugned order under Section 152 read with Order 47 Rule 1 C.P.C. It is further submitted that the impugned order was passed in a Review Petition. Learned Counsel has placed reliance on Order 47 Rule 9 C.P.C. wherein it is provided that no review shall be maintainable against an order passed on review petition.

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14. Learned Counsel submits that the Appellant has challenged the order dated 26^th October, 2006 in the appeal still the initial order of the Learned DRT is not challenged. Hence, the appeal is liable to be dismissed.

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15. Before proceeding further it would be appropriate that the factual aspect should be borne. Respondent No. 1 in the appeal was Defendant No. 1 before the Learned Tribunal. A decree was passed against the Respondent No. 1 apart from the other Respondents wherein Respondent No. 1 was directed to make payment of Rs.3,72,996.60p with costs and pendent lite and future interest at the rate of 20.75% per annum with quarterly rests. Subsequent thereto, Respondent No. 1 filed a writ petition, being W,P, No. 237 of 1999, before the Hon’ble High Court Judicature of Andhra Pradesh at Hyderabad which was decided on 11^th September, 2000 wherein a decree, passed against the Respondent No. 1, was under challenge. The writ petition was dismissed. However, Respondent No. 1 was permitted to prefer an appeal as per law. The Hon’ble High Court was pleased to even accord the benefit of Section 50 of the Limitation Act to the Respondent No. 1. Admittedly, no appeal was preferred by the

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Appeal No. 427 of 2013 DRAT-Kolkata Respondent No. 1. When the Appellant Bank initiated the proceedings for recovery, another writ petition, being W.P. No. 11885 of 2001, (ECE Industries Limited -vs- Indian Standard Bank) was preferred before the Hon’ble High Court Judicature of Andhra Pradesh at Hyderabad wherein it was observed that the question of payment of interest that too at quarterly rests would arise only against the borrower or the Guarantor that too on the basis of the terms of the contract. The Bank does to plead any contract with the petitioner herein, therefore, awarding of interest as well as fixation of intervals against the petitioner at par with the borrowers or the guarantors cannot be sustained in law.

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16. However, this care and the undertaking adjudication into that how so ever palpable mistake may be, the only course to be open to the petitioner is to approach the concerned Tribunal with an application under Section 152 C.P.C. or under Order 47 Rule 1 C.P.C. as the case may be. Thereafter, Respondent No. 1 filed M.A. 119 of 2002 in O.A. 102 of 1995 for reviews which was allowed by the Learned DRT on 11^th November, 2002. Learned DRT framed two issued; viz., (i) Whether there is an error apparent on the fact of the record? (ii) If so, to what relief is the petitioner entitled to?

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17. In the issue No. (i), Learned DRT reverted the finding in the order dated 24^th February, 1998 in the O.A. directing the petitioner for payment of Rs.3,27,886.10p to the Applicant Bank cannot survive and the order dated 24^th February, 1998 is erroneous. Accordingly, the review petition was allowed. Feeling aggrieved with the order Applicant Bank filed a Misc. Application No. 2 of 2004 in M.A. 119 of 2002 fo review of the order which was decided by the Learned DRT on 26^th October, 2002 holding that the DRT cannot review its own order for the second time.

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18. In this backdrop, now it is to be seen what is the scope of the review under Order 47 Rule 1 C.P.C. read with Section 114 of C.P.C. and Rule 5A of the Debts Recovery Tribunal Procedure Rules, 1993

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Appeal No. 427 of 2013 DRAT-Kolkata

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where the order dated 11^th November, 2002, passed by the Learned DRT in M.A. 119 of 2002, allowing the review petition and disallowing the claim and the Appellant was within its jurisdiction.

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19. Learned Counsel for Respondents submits that Order 47 Rule 9 of the C.P.C. provides that no review shall be maintainable against order of review. Order 47 Rule 9 of the C.P.C. reads as under:

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“No application to review an order made on an application for a review or a decree or order passed or made on a review shall be entertained.”

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20. This is a peculiar case wherein the Appellant in the review petitioner filed by the Appellant was allowed by the Learned DRT. It is also borne out from the record that finding of facts which were even upheld by the Hon’ble High Court in writ petition, were reopened and reconsidered by the Learned DRT by considering the application under Order 47 Rule 1 C.P.C. The Hon’ble High Court held that as far as the question of payment of interest is concerned, it can be looked into by the Learned DRT or by preferring an appeal but finding regarding dues of Respondent No.1 against the Applicant Bank were not disturbed even by the Hon’ble High Court.

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21. In these circumstances, when the Appellant preferred an application for review, being Application No. 2 of 2004 in O.A. 102 of 1995 it was dismissed by the Learned DRT on the ground that whether the previous review order is valid or not cannot be decided by the Learned DRT once again and only option left is to prefer the appeal before the appropriate authority. This order, dated 26^th October, 2006 is under challenge in this appeal.

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22. As far as scope of Order 47 Rule 9 of the C.P.C. is concerned, the Respondents have placed reliance on a judgment of the Hon’ble Apex Court in the matter of Lakshmi Traders -vs- Election Commission of India, passed on 3^rd February, 2020 wherein it was held that there can be no review of an order passed in review petition. The fact that the applicant petitioner was not heard before the order was passed in

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Appeal No. 427 of 2013 DRAT-Kolkata the review petition cannot be the basis to file an application for recall. The facts of the present case are completely on a different footing. In Akshar Corporation -vs- O.L. of Vivekananda Mills Limited, reported in (2005) 2 GCD 1482, it was held:

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“94. The power to review is the creation of a statue. It must be conferred by law either specifically or by necessary implication. Review is not an appeal in disguise. It cannot be denied that justice is a virtue which transcends all barriers and the rules or procedures or technicalities of law cannot stand in the way of administration of justice. Law has to bend before justice. If the Court finds that the error pointed out in the review petition was under mistake and the earlier judgment would not have been passed but for erroneous assumption which in fact did not exist and its perpetration had resulted in miscarriage of justice,nothing would preclude the Court from rectifying the error. The mere fact that different views on the same subject are possible, is no ground to review the earlier judgment passed by a bench of the same strength.

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95. In view of this, the application made by the present applicant does not fall strictly within Order 47 of the Code of Civil Procedure, i.e. review of the order. In view of the same, the contention of the opponent No. 3 that, in view of the Rule 9 of Order 47 of the CPC, the present application is not maintainable, cannot be accepted by this Court. However, still the application made by the applicant is maintainable in view of the inherent provisions contained in Rule 9 of the Companies [Court] Rules. Rule 9 is analogous to Section 151 of the C.P.C., which also provides for inherent powers. What is meant by inherent? According to the dictionary meaning. "inherent means "natural", existing and inseparable from something, a permanent attribute or quality an essential element, something intrinsic, essential, vested in or attached to a person or office as a right or privilege. Inherent powers are thus powers which may be

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Appeal No. 427 of 2013 DRAT-Kolkata

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exercised by a Court to do full and complete justice between the parties before it.

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96. The section (i.e. Section 151 of C.P.C.) is thus declaratory in nature. It does not confer inherent powers in a Court but declares that such powers have been vested in every Court of civil jurisdiction. It further states that no provision of the Code should be taken or deemed to limit or otherwise affect these inherent powers. These powers are inherent in the Court by virtue of its duty to do full and complete justice between the parties before it.

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97. The Code of Civil Procedure is not exhaustive (Durga Dihal Das v. Anoraj, 1895 (17) All 29, 31; Jogendra Chandra Sen -vsWazidunnisa Khatun, 1907 (34) Cal 860, the simple reason being that the legislature is incapable of contemplating all the possible circumstances, which may arise, in future litigation, and consequently for providing the procedure for them (Jai Rani Pun -vs- Vinod Kumar Pari, AIR 1998 Del 212), The Court has, therefore, in many cases, where the circumstances so require, acted upon the assumption of the possession of an inherent power to act ex debito justitios, and to do real and substantial justice for the administration for which alone, it exists (Hukum Chand -vs- Kamalanand, 1906 (33) Cal 927; Shankar Hari -vs- Damodar Vyankaj, 1945 ILR Bom 463: AIR 1945 Bom 380 47 Bom LR 104, Vrajlal -vs- Jadhav, 1972 (13) Gu) LR 555: AIR 1972 Guj 148, Multivakaji -vs- Kalindivakaji, AIR 1994 Guj 42). However, the power, under this section, relates to matters of procedure. If the ordinary rules of procedure result in Injustice, and there is no remedy, they can be broken in order to achieve the ends of justice (Atul Chandra Vora -vs- Assam Tea Brokers Private Limited, AIR 1995 Gou 73). The law cannot make express provisions against all inconveniences such that their dispositions express all the cases that may possibly be covered. It is, therefore, the duty of a Judge to apply them, not only to what appears to be regulated by their express provisions of the law or within the consequences that may be gathered

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Appeal No. 427 of 2013 DRAT-Kolkata from it (Shankar Hari -vs- Damodar Vyankaj Supra; Hurro Chunder Roy -vs- Shoorodhone Debia, 1868 (9) WR 402, 406.”

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23. Provisions of Order 47 Rule 9 C.P.C. are mandatory. Definitely, no second review is maintainable against an order of review passed in an application for review of the order. However, without going into the merits of the order dated 11^th November, 2022 passed in M.A. 119 of 2002 arising out of O.A. 102 of 1995, keeping in view the special features of this case, I find it necessary to observe that in the review earlier order passed by Learned DRT was reversed. Under the provisions of Order 47 Rule 9 C.P.C. the aggrieved party, that is Bank, has no option to file a second review although that order could have been challenged by filing an appeal instead an application for review was filed. In such circumstances, although the appeal is liable to be dismissed, however, liberty is granted to the Appellant to prefer an appeal against the order dated 11^th November, 2002 passed in M.A. 119 of 2002 arising out of O.A. 102 of 1995.

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O R D E R

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Appeal is dismissed. However, Appellant would be at liberty to prefer an appeal against order dated 11^th November, 2002 in M.A. 119 of 2002 arising out of O.A. 102 of 1995 passed by Learned DRT, Hyderabad before appropriate forum.

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Copy of the order be supplied to Appellant and the Respondents and a copy be also forwarded to the concerned DRT.

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No order as to costs.

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File be consigned to Record room.

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Copy of the Judgment/Final Order be uploaded in the Tribunal’s Website.

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Order pronounced by me in the open Court on this the 20^th day of July, 2022.

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(Anil Kumar Srivastava,J) Chairperson