Allowed

Dr Binod More v. Indian Overseas Bank and Ors.

DRAT5 Feb 2025REGULAR APPEAL/125/2023

Case brief

AI extract

What is this about?

In an appeal against a DRT order allowing a bank's recovery application, the tribunal held that the retrospective application of Section 19 RDDB Act provisions to bar counter-evidence was erroneous. The order was set aside and remanded for fresh hearing.

What did the court decide?

Impugned order dated 28.10.2020 set aside; matter remanded to DRT to decide afresh considering the written statement filed by the appellant.

Dr Binod More versus Indian Overseas Bank and Ors. — Banking and Recovery | DRAT (2025)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Appl. No. 125 of 2023

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(Arising out of T.A. 228 of 2013 in O.A. 03 of 2007 - DRT-3 Kolkata)

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THE HON’BLE JUSTICE SHRI ANIL KUMAR SRIVASTAVA, CHAIRPERSON

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Order No. 41 05.02.2025

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Dr Binod More residing at 6, Sura East Road, Flat NO. AD, Beliaghata, Kolkata – 700010.

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... Appellant

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--Vs--

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Indian Overseas Bank having office at 3B Lal Bazar Street PS Hare Street Kolkata 700001

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2.Hilton Trade Links Private Limited offiice at 19/2B, Narayan Chand Dutta Street, P.S. Burtala, Kolkata - 700006

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3.Satyanarayan Jalan residing at 19/2B, Narayan Chand Dutta Street, P.S. Burtala, Kolkata - 700006

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4.Pawan Singhania residing at Prop. of Sri Venkatesh Udyog, Gurdwara Road, Rourkela, Odisha-769001

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... Respondents

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For Appellant : Mr. Nemani Srinivas, ld. adv. For Respondent :

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THE APPELLATE TRIBUNAL :

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Heard learned counsel for the appellant and perused the

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records. Despite issuance of repeated notices even by way of

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publication in the newspapers, none appeared for the respondent

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bank.

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Instant appeal is preferred against the judgement and order

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dated 28.10.2020 passed by learned DRT-III Kolkata in T.A. No. 228 of 2013 arising out of O.A. No. 03 of 2007 [Indian Overseas Bank Vs. Hilton Trade Links Pvt. Ltd. & 3 others] whereby T.A. 228 of 2013 was allowed against the defendant no. 1 to 3 for an amount of Rs.10,51,161.00 with pendentelite and future interest at the rate of 14.75 per annum simple on the amount due from

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the date of filing of the O.A. i.e. 12.01.2007 till realization. Consequential reliefs were also granted. Feeling aggrieved, appellant preferred the appeal.

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Learned counsel for the appellant would submit that O.A.

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was filed by the bank against the defendants for issuance of recovery certificate for an amount of Rs.10,51,161.00. Learned counsel submits that defendant no.1 company was represented by its Directors, respondent no.2 and 3. Financial assistance was granted in favour of respondent no.1 company to the tune of Rs.7.50 lakhs. Subsequent thereto, defendant no.1, 2 and 3 had agreed to purchase a cheque of Rs.7.50 lakh drawn in their favour by proforma defendant no.4. The cheque was dishonoured

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and criminal proceeding was initiated u/s 138 of the Negotiable

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Instrument Act. On 23.03.2024 defendant no.1 executed a

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document giving consent to disclose their name by the bank to Credit Information Bureau (India) Ltd. On the same day, on request of defendant no.1, applicant purchased the cheque which was dishonoured. Legal notices were issued to defendant no.1.

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Thereafter O.A. was filed.

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Pending O.A. proceeding defendant no. 3 had filed written statement on 21.01.2016, but no counter evidence was filed. However, written statement was not taken into consideration by the learned DRT in view of the provision of sub-section 10(A) and 10(B) of Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as Act). Right to file counter evidence was closed. Impugned judgement and order was passed.

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Learned counsel for the appellant would submit that appellant herein, who is defendant no.3 in the O.A., has no privity of contract with the respondent bank. Appellant has no concern with the loan amount. Learned counsel further submits that written statement was filed on 21.01.2016 while the mandates of

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sub-section 10(A) and 10(B) of Section 19 of the Act came into

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force on 04.11.2016. Accordingly, provisions of the Act are not applicable.

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At the very outset without entering into the merit of the case, I find that mandates of sub-section 10(A) and 10(B) of Section 19 of the Act were incorporated in the Act w.e.f. 04.11.2016 which could not be considered as retrospective in nature. Learned DRT erroneously considered the mandates of sub-section 10(A) and 10(B) of Section 19 of the Act as retrospective in nature and closed the right of hearing of defendant no.3, who is appellant before this tribunal. A plain reading of the two sub-sections of the Act reveal that those provisions are prospective in nature. Accordingly, finding recorded by the learned DRT was erroneous and is liable to be set

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aside.

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Appeal is allowed. Impugned judgement and order dated

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28.10.2020 passed by learned DRT-III Kolkata is set aside.

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Matter is remanded back to the learned DRT to decide afresh after considering the written statement filed by defendant no.3.

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Learned DRT would decide the matter afresh after affording

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opportunity of hearing to the parties, i.e. the bank as well as

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defendant no.3. Since it is an old matter learned DRT should

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decide the matter expeditiously. Costs easy.

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File be consigned to record room.

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Copy of the order be supplied to the appellant and the respondents and a copy be also forwarded to the concerned DRT.

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Copy of the judgement/Final Order be uploaded in the Tribunal’s website.

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Order dictated, signed and pronounced by me in the open Court on this the 5th day of February, 2025.

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(Anil Kumar Srivastava, J) Chairperson

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Dated : 05.02.2025 18/pkb

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Dr Binod More v. Indian Overseas Bank and Ors.

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Dr Binod More v. Indian Overseas Bank and Ors.

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