Dismissed

Mitexco and Ors. v. Canara Bank

DRT11 Apr 2023MA/33/2022

Case brief

AI extract

What is this about?

In a miscellaneous application, the Debt Recovery Tribunal examined a request by loan applicants to modify a 2004 final decree based on a 2017 Supreme Court order quantifying dues. The court dismissed the application, noting the 5-year delay lacked plausible justification and citing the principle that law aids the diligent, not the indolent.

What did the court decide?

The miscellaneous application seeking modification of the 2004 decree is dismissed on the ground of limitation.

Mitexco and Ors. versus Canara Bank — Banking and Recovery | DRT (2023)

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IN THE DEBT RECOVERY TRIBUNAL-I AT MUMBAI

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M.A. No. 33 of 2022

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OA no. 1824 of 2000

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M/s Mitexco & Ors. …. Applicants
Versus
Canara Bank …. Respondent
(Final Order)
Introduction

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By way of present Miscellaneous Application (M.A.) the applicants

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are praying that the order dated 29/07/2004 passed by this Tribunal in Original Application (O.A.) No. 1824/2000, whereby directing the applicants to pay a total sum of Rs. 88,06,914.96 be quashed and set aside and modify the same as per order dated 11/10/2017 passed by Hon’ble Supreme Court in Special Leave to Appeal (Civil) Nos. 516-517/2015 and pass appropriate orders

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after giving the credit of the amount deposited by the present

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applicants and prayed other reliefs.

MA No. 33 of 2022

Facts

The facts as briefly stated in the MA are that the Respondent filed an OA No. 1824/2000 and the said was allowed on 29/07/2004 and the decree was passed for a total sum of Rs. 88,06,914.96. Inconsequence of the decree RC was issued on 15/09/2004. It is further stated that the applicants filed a Special Leave to Appeal No. 516-517 of 2005 before the Hon’ble Supreme Court and Hon’ble Supreme Court after considering the facts on record passed the order on 11/10/2017 and directed that the petitioner therein was required to pay the balance of Rs.87,34,962/- within the period of six months. It is stated that after the order of Hon’ble Apex Court the decree passed by the Tribunal in 2004 is no more live and the same has been merged into the order passed by Hon’ble Apex Courts and therefore, now what is inevitable is only a order passed by Hon’ble Apex Court dated 11/10/2017. It is also stated that Respondent herein challenged order of Hon’ble Supreme Court Apex Court by filing Review Petition No. 939940/2018 however the said review petition was dismissed vide order dated 10/04/2018 and thus the order dated 11/10/2017

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passed by Hon’ble Supreme Court attended the finality and the

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amount taken by the Hon’ble Supreme Court has been crystalized.

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It is further stated that on 31/10/2019 the applicants deposited an

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amount of Rs. 1 Crore with the Ld. Recovery Officer, DRT-1, Mumbai and the said amount was appropriated in the loan account of the applicants. It is also stated that being aggrieved by the order dated 30/10/2019 passed by this Tribunal the applicants herein filed an Appeal No. 92/2019 with the Hon’ble DRAT, Mumbai and the Hon’ble DRAT in the Appeal directed to the Applicant to pay 50% of the sum has quantified by the Hon’ble Supreme Court vide order dated 11/10/2017 in the Applicants have deposited the said amount with the Ld. Registrar, DRAT, Mumbai.

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It is also stated that the order passed by the Hon’ble Apex Court

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was in exercise of its plenary and extraordinary powers under Article 142 of the Constitution of India, and thereby quantified the amount to be paid by the Applicants. It is stated that the Applicants despite efforts, were unable to make payment of said amount within the said period due to this serious health condition of the parents of Applicant no.4.

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MA No. 33 of 2022

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In sum and substance, it is stated that after the order dated

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11/10/2017 of the Hon’ble Apex Court the original decree passed on 29/07/2004 by this Tribunal is no more alive and the order passed by Hon’ble Supreme Court is required to be executed.

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It is also stated that since the order passed by Hon’ble Supreme Court was not a conditional order therefore the amount quantified by the Hon’ble Supreme Court was required to be implemented by this Tribunal and thus prayed that the present MA may be allowed.

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On the other hand, the Respondent filed a response to the MA and strongly objected to the present MA on various grounds including limitation. It is stated that an Appeal was already filed by the Applicants herein and challenged the final order / Decree dated 29/07/2004 however, the said Appeal was dismissed by Hon’ble DRAT, Mumbai vide order dated 08/12/2006. The Order dated 08/12/2006 in Appeal was not challenged any further thus, same attained finality, thus, prayer to modify the Final Order / Decree is an unscrupulous attempt of the Applicants.

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Further, it is stated that during the execution of the Recovery Certificate No. 538/2004, the mortgaged property was sold and an

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amount of Rs. 96.75 Lakhs was recovered. Since the Recovery

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Certificate was not fully satisfied therefore, Ld. Recovery Officer proceeded to attach the Identified Property and after deciding various applications of the Applicants, a Warrant of Attachment dated 23/10/2012 was issued. Review Application against the said Order of the Applicants herein was dismissed on 04/04/2013 and Applicants challenged the said Order before the Hon’ble High Court of Bombay vide Writ Petition No. 1300/2013 on a issue with regard to interpretation of Rule 68 B of Schedule II of the Income Tax Act. The said Writ Petition was rejected vide order dated 16/04/2014. The Applicants herein against the said order dated 16/04/2014 filed a Special Leave to Appeal bearing Nos. 516-517 / 2015 before the Hon’ble Supreme Court. The said Special Leave to Appeal was disposed off vide Order dated 11/10/2017 and Hon’ble Supreme Court directed the Applicant No. 4 to pay Rs. 87,34,962/- to the Respondent herein within a period of 6 months from the date of order but the order dated 11/10/2017 of Hon’ble Supreme Court was not obeyed by the Applicants. The Applicants neither deposited the said amount within the stipulated time i.e. till 10/04/2018 nor any time thereafter nor sought installments to

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pay the amount as directed by Hon’ble Supreme Court. Further

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the Applicants did not seek extension of time for payment of amount, from the Hon’ble Supreme Court. Even otherwise for the

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purpose of limitation the Applicants are relying on the order passed by the Hon’ble Supreme Court however still the present MA is moved after a lapse of 5 years. Thus, the present MA is a vexatious attempt of the Applicants, therefore, the same may be rejected.

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According to the Respondent, the original Decree passed by this Tribunal was never challenged before the Hon'ble Supreme Court. It is only an order passed by Hon’ble High Court for an issue regarding the interpretation of Rule 68 B of Schedule II of the Income Tax Act, which was under challenge before the Hon’ble Supreme Court. Therefore, the Applicants are wrongly claiming modification of the final Decree dated 29/07/2004, thus, the present MA may be dismissed with heavy cost.

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Consideration

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Considered the rival submissions of the parties and gone through the record.

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Record reveals that the present MA is filed on 12/05/2022 and the

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applicants are seeking modification of the final order / Decree

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dated 29/07/2004 passed by this tribunal, on the basis of Order dated 11/10/2017 passed in Special Leave to Appeal Nos. 516517/2015 by Hon’ble Supreme Court thus admittedly the present MA is filed after more than 4 years of the Order of Hon’ble Supreme Court. According to the applicants vide order dated 11/10/2017 Hon’ble Supreme Court directed the Applicant to pay a sum of Rs. 87,34,962/- within the period of 6 months from the date of order dated 11/10/2017. Thereafter the respondent filed a Review Petition No. 939-940 of 2018 against the said Order and the same was dismissed on 10/04/2018. It is the case of the applicants that thereafter the Respondent deliberately did not move any application for modification of order dated 29/07/2004 thus the Applicants filed the present Application seeking modification.

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10.According to the Ld. Counsel for the applicants vide order dated 11/10/2017 in Special Leave to Appeal Nos. 516-517/2015 Hon’ble Supreme Court directed that the petitioner to pay the balance amount of Rs. 87,23,962/- (2,16,04,718 - 1,28,69,756/-) within the period of six months. He also stated that the Respondent herein challenged the said order dated 11/10/2017, by way of a Review Petition No. 939-940/2018 before the Hon’ble Supreme Court,

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however, the said Review Petition was dismissed vide order dated

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10/04/2018. Further it is stated that the applicant deposited Rs. 1 Crore with the Ld. Recovery Officer, DRT - 1, Mumbai and thereafter the applicant bank has withdrawn the said amount and appropriate in the loan account of the defendants.

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11.To establish that the Hon’ble DRAT, Mumbai, also considered the amount determined by the Hon’ble Supreme Court as the total dues against the Applicants, Ld. Counsel for the Applicants stated that while passing order on the Waiver Application No. 799/2019 in Appeal No. 92/2019 Hon’ble DRAT, Mumbai directed the Applicants to pay Rs. 43,67,681/- being 50% of a sum of Rs. 87,34,962/- as quantified by Hon’ble Supreme Court vide Order dated 11/10/2017. Thus, he stated that the Order dated 11/10/2017 of Hon’ble Supreme Court has attained finality and the Original Decree dated 29/07/2004 is no longer in existence. However, the Respondent is proceeding on the basis of Recovery Certificate (R.C.) dated 15/09/2004 which was issued on the basis of Original Decree / Order dated 29/07/2004 but the said RC is now not enforceable, as same is contrary to the order passed by

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Hon’ble Supreme Court. The second limb of arguments of Ld.

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Counsel for the Applicants was that the Final Order dated 29/07/2004 of this Tribunal has merged with Order dated 11/10/2017 of the Hon’ble Supreme Court, thus, he prayed that the Order dated 29/07/2004 in OA No. 1824/2000 may be modified.

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12.On the other hand Ld. Counsel for the Respondent strongly objected to the present MA and submitted that the order dated 29/07/2004 in OA No. 1824/2000 was not changed or disturbed by any Court. He also submitted that the present MA is filed after a lapse of 5 years and thus the same liable to be dismissed on this ground alone.

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13.It is reveals from the MA that the prayer of the present MA is completely based on the Order dated 11/10/2017 passed by Hon’ble Supreme Court in Special Leave to Appeal Nos. 516517/2015. The relevant part of the said order is reproduced herein under:

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“ In the present case, against a loan amount of Rs. 60,00,000/- (Rupees Sixty lakh) made available by the respondent bank to the petitioner (s) in the year 1997, till

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date the respondent bank has received a total sum of Rs.

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MA No. 33 of 2022

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1,28,69,756/- ( Rupees One crore Twenty Eight lakh Sixty Nine thousand Seven hundred and Fifty six). The aforesaid amounts were received by the respondent bank in the year 2008-2009. If the year 2009 is to be taken into account for the purposes of computation of the outstanding dues of the respondent Bank the figure that has been worked out is Rs. 2,16,04,718/- (Rupees Two crore Sixteen lakh Four thousand Seven hundred and Eighteen). This is approximately four times the loan amount.

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Having considered the matter we are of the view that the ends of justice would be met if the petitioner (s) is required to pay the balance amount i.e. Rs. 87,34,962/(Rupees Eighty Seven Lakh Thirty Four thousand Nine hundred and Sixty Two) [Rs. 2,16,04,718 /- minus (-) Rs.1,28,69,756/-] within a period of six months from today, if required, by installments.

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The Special Leave Petitions are disposed of in the above terms.”

(emphasis provided)

MA No. 33 of 2022

14.A bare reading of the above said order of Hon’ble Supreme Court

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reveals that the Final Order dated 29/07/2004 of this Tribunal was

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not under challenge and thus final Decree was not changed. Rather in view of the ends of justice the applicants were provided an opportunity to deposit the amount within six months but admittedly the Applicants failed to do so.

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15.It is very surprising that at the one hand the applicants herein dare not to comply the order passed by the Hon’ble Supreme Court and not deposited a sum of Rs. 87,34,962/- within the period of 6 months from the date of order dated 11/10/2017 and never sought any extension of time for the same, however now on the other hand on the basis of same Order dated 11/10/2017 the applicants seeking modification of the final Decree dated 29/07/2004 passed by this Tribunal that too after more than 4 years. The said conduct of the Applicants is highly deplorable.

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16.Even otherwise the failed to reason Applicants give any

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irrespective of cogent reason for delay of more than 4 years. vigilantibus non dormientibus, jura subveniunt the law aids the diligent and not the indolent; that a man who has negligently slept

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over his right for an undue length of time will not be allowed to litigate in respect of the same.

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17.Hon’ble Apex Court in the case of Pundalik Jalam Patil (Dead) by LRs Vs. Executive Engineer, Jalgaon Medium Project and Anr. while considering the law of limitation has observed as under :-

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“ 23. Statutes of limitation are sometimes described as statutes of peace. An unlimited and perpetual threat of limitation creates insecurity and uncertainty; some kind of limitation is essential for public order. This court in Rajender Singh and others vs. Santa Singh and others [(1973) 2 SCC 705] has observed : the object of law of Limitation is to prevent disturbance and deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or laches. In Motichand vs. Munshi [(1969) 2 SCR 824], this court observed that this principle is based on the maxim interest republicaeut sit finis litum, that is, the interest of the State requires that there should be end to litigation but at the same time law of Limitation are a

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means to ensuring private justice suppressing fraud and

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perjury, quickening diligence and preventing oppression.

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(emphasis provided)

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18.Further Hon’ble High Court of Madras in M/s Digivision

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Electronics Limited Vs. Indian Bank 2005 (3) Law Weekly 269 page 44 held that:

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“ Banks and financial institutions are badly affected by non recovery of dues. After availing the facility of financial assistance quite often the borrowers hardly show interest in re-payment of the loans show interest in re-payment of the loans which keep on accumulating as a result of which it becomes difficult for the Financial Institutions to give financial assistance to deserving parties due to heavy blockade of money stuck in with erring borrowers.”

MA No. 33 of 2022

Conclusion

19.In view of above, since the Applicants failed to give any plausible

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ground for condonation of delay therefore, the present MA is

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hereby dismissed on limitation.

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