Dismissed

State Bank of India v. M/S Nara Technologies Pvt. Ltd.

DRT2 Aug 2023OA/453/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed an interlocutory application filed by a company to recall an order dismissing its default. The court held that since the applicant failed to specifically pray for condonation of a 159-day delay in filing a written statement, such relief could not be granted. The application was further struck down as an abuse of process for suppressing material facts.

What did the court decide?

The Interlocutory Application No. 137 of 2023 was dismissed for want of requisite and proper specific relief prayed for and as an abuse of process of the Tribunal.

State Bank of India versus M/S Nara Technologies… — Contract and Commercial Disputes | DRT (2023)

¶1

IN THE DEBTS RECOVERY TRIBIJNAL - I, KARNATAKA AT BENGALURU

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PRESENT: SRI IMTIAZ ALI PRESIDING OFFICER

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Dated the 02"d day ofeugust. )023

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INTERLOCUTORY APPLICATION NO. I37 OF 2023

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ORIGINAL APPLICATION NO.453 OF 2022

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Between

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IWs NARA Technologies P,1 Ltd^(OPC). No.307, 3'd Floor, 7s Cross, Shivananda Nagar, NT Sandra P.O, Bangalore, Karnataka - 560075, represented by its Director, Rekha Devi. .Petitioner/Defendant

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And

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State Bank of India having its head office in Mumbai and branch among other^places including an SME Centre at No.13, 2A, Munireddy Layout, Horamavu Main Road, Banasawadi, Bangalore, Kamataka -⁵⁶⁰¹ 13. ...^{Respondent/Applicant bank}

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This Interlocutory Application having^{been heard} on^{29.05.2023 in the presence} of Advocates Anupama Bordoloi,^{Vishali Srilakshmi, Nagaraj R and PawanKumarfor} the petitioner/defendant and Advocates^{IWsVachannaG.K and VishwasL for the} respondent/applicant bank, and stood^{overto this day.for consideration,the Tribunal} delivered the following:-

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ORDER

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lA 13712023 was filed on 09.02.2023^{under5'19(25) r/w S.22(2)(h) of the} Recovery of Debts due to^{Banksand Financial InstitutionsAct, 1993 praying to recall the} order dated 05.09.2022.^{The petitioneris noneother than thedefendantprivatelimited} company in the aforementioned^OA.

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lA No.137/2023 in O A 45312022

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The case set out by the petitioner/defendant through its authorised signatory in the notary attested affidavit accompanying the IA in briefis as follows:- The deponent is the authorised signatory of the defendant private limited company, who appeared in person on 04.08.2022 pursuant to the summons received. The case was adjoumed to 05.09.2022. on which day the case was again adjoumed to 25.11.2022. However, this defendant was placed ex-parte or.05.09.2022. The minor delay occurred in filing the wdtten statement is not intentional but due to bonafide reasons only and hence the IA-

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The respondent/applicant bank filed counter styled as 'objection' and contending as follows:- On receipt of the summons the defendant appeared in person on 04.08.2022 and the paper book was served to him on that day. On 05.09.2022, the defendant was not appeared and hence the case was posted to 25.11.2022, on which day the case was again adjoumed to applicant's evidence to 23.02.2023. There is no reason assigred by the defendant for non-appearance or non-engagement of a counsel on 05.09.2022. The written statement was not filed within the prescribed period of time. On the above contentions, the respondenUapplicant bank prayed for dismissal of the IA.

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Heard both sides. Perused records. On the rival contentions, the only point arises for consideration is as to whether the petitioner/defendant is entitled to the relief prayed for?

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The Point:- At the outset, it may be pointgd out that the provision of law quoted in the application is not applicable to the relief prayed for. The IA is filed on 09.02.2023 under S.l9(25) r/w S.22(2)(h) ofthe Recovery of Debts due to Banks and Financial Institutions Act, 1993. This Tribunal, without moving out from the merits of the case, for academic interest, would like to mention that the IA has been filed quoting the name of the Act in its erstwhile name only. However, the Central Govemment in exercise conferred upon it under sub-section (3) of S.1 of the Insolvency and ::-0"*.r.

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lA No.13712023 in O A 45312022

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Bankruptcy Code,2016 (Act 31 of2016) - for short'the Code'^{- appointed} the^{l't day} of December, 2019 as the date on which the^provisions of^{the Code} only in^{so faras relating} to personal guarantors to corporate debtors came into force^vide S.O^No.4126(E) published in the Gazette of India : Extraordinary [Part II - S.3(ii)](Notification F.No.30/21l2018-Insolvency Section dated 15.11.2019]. By^virtue of^{the said} Notilication dated 15.11.2019, while 5.249 rlw the 5s^{Scheduleof theCodecarneinto} force, in sub-section (l) of S.l of the Act, for the^words 'Due^{to Banks andFinancial} lnstitutions' the words 'and Bankruptcy'^{was substitutedandthus the titleofthe Act was} amended as the 'Recovery of^{Debts and Bankruptcy Act,1993'} -^{for short'theAcf with} effect from 01.12.2019.

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The petitioner/defendant in the application^{has prayedfor recalling} the order dated 05.09.2022 so as to^enable it^{to contest the case.Whatrecorded in} the proceedings date d 05.09.2022 is as follows:-

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"Wrilten stdtement of defendanl not filed. Applicant bank to file applicant's^{ettidence by} 25.11.2022."

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It goes without say that what^{recordedon 05.09.2022in the proceedings} was only the minutes of^{what transpired between the Bar andthe Bench on that day. The} petitioner/defendant private limited company^{throughits authorisedsignatory in the} allidavit accompanying^{the IA haspleadedthat it was placed ex-parte on 05.09.2022.The} petitioner/defendant was neither placed ex-parte^{nor was any adverseremarks passed} against it. The^{petitioner/defendanthas no casethat there was someerror apparenton the} face of the record occurred^{in recordingthe minutes or there were some procedural} irregularities in conducting^{the case.The questionof settingaside an order whichhasnot} been passed doesn't^{arise. Thepetitioner/defendantwas not placedex-parteon}

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05.0g.2022. None of^{its application was dismissed for default nor was any ex-parte order} passed by this Tribunal in^{its absence. Therefore, there is no need to recall such order and} the remedy of the^{petitioner/defendant lies elsewhere.}

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IA No.137,2023 in O A 451D022

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The afore-cited OA was filed on 27.01.2022 wder S.19(l) of the Act [The respondent/applicant bank has also in its blunderbuss way used the name ofthe Act in its erstwhile name only] for recovery of the sum of 124,28,3281- due under the cash credit account with interest thereon @9.650/o per annum with monthly rests from the defendants and by sale of the hypothecated schedule movables.

¶29

Summons in this case was sent to the defendant private limited company by registered post on 30.05.2022, which was not returned despite the lapse of thirty days from the date of despatch. Hence, it was deemed to be served. However, bearing in mind the volume and weight of the OA filed on 27.01.2022, a perusal of the postal receipt produced by the applicant bank vide memo filed on 09.06.2022 shows that what sent by registered post on that day was only the summons without any enclosure attached. The petitioner/defendant private limited company appeared in person through its authorised sigrratory on 04.08.2022. However, it is recorded in the proceedings dated 04.08.2022 that the paper book was served on the defendant. The authorised signatory received the same vide endorsement in the proceedings sheet on 04.08.2022. The respondenVapplicant bank also consented to the same in its counter affidavit. Therefore, tle petitioner/ defendant was duly served with summons in terms of 5.19(4) of the Act r/w R.l1 of the Debts Recovery Tribunal (Procedure) Rules, 1993 (as amended from time to time) - for short'the Rules' - only on 04.08.2022. As per the statutory stricture given under 5.19(5) of the Act r/w R.l2(l) of the Rules, the petitioner/defendant ought to have filed its written statement of defence on or before 03.09.2022. In fact, the petitioner/defendant filed its wriuen statement of defence along with this petition on 09.02.2023 only, with a delay of 159 days.

¶30

According to the petitioner/defendant, the minor delay in filing the written statement is not intentional but due to the bonafide reasons. It has not specifically been disclosed as to what amounts to 'minor delay'. The quantum of delay occurred in filing

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lA No.137/2023 inOA 453D022

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the written statement has not been mentioned in the affidavit. The reasons for the same have not been explained. The 'bonafide reasons' are to the knowledge of the deponent only. Nowhere in the affidavit accompanying the IA, has the petitioner/defendant mentioned about the length ofdelay and each day's delay has not been explained therein. Relief depends upon pleading. If no delay is pleaded no relief on that aspect can be prayed for. If defendants are allowed to remain absent after receipt of summons issued by the Tribunal and prolong the proceedings by filing petitions like this, it will defeat the very object of the Act. In the above circumstance, its case on that aspect cannot be believed.

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Also, there is no relief prayed for to condone the delay of 159 days occurred in filing the written statement. The prayer is confined only to recall the order dated 05.09.2022, which has already been dealt with elsewhere in this order. It is trite law that this Tribunal in the absence of a specific relief prayed for cannot condone the delay. For the purpose of condonation of delay, in the absence of such a specific prayeq this Tribunal cannot exercise its inherent power conferred upon it under sub-section (25) of s.19 of the Act r/w s.24 of the Act and s.5 of the Limitation Act, 1963 and to pass orders to secue the ends ofjustice.

¶34

It was held by the Hon'ble Supreme Court in State of Orissa v Mamata Mohanu freported in 2011 (1) KLT sN 76 (c.No.t\il sct that relief not claimed cannot be granted, and it reads so:-

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"PleadiW and Parliculars are required to enable the court to decide the righB of the porties in the trial. Thus, the pleadings c,re more to help the court in nmrowing the controvirsy itwolv2d and to inform the Parties concerned to the question in issue, so thot the parties may adduce appropriate e-vidence on the said issue. It is a settled legal proposition thqt "as a rule relief not fiunded oniie pieadings should not be granled. " Therefore, a decision of a cose cannot be based oit groinds outside thi pteadiigs of the parlies. The pleadings and issues are lo ascertain the real dbpute beieen the panies to niuo. thZ iea o7 conflict and to seejust where the two sides difer. "

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The same view was taken by the Hon,ble Supreme Cowt in State of M.p v Narmada Bachao Andolan [reoorted in (20] t ) 7 scc 6391 wherein it was held that relief not sought by party cannot be granted by court, and the relevant portion reads as below:-

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IA No.13?/2023 in O A 453D022

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"In the instant cases, the R&R Policy or amendment therelo in 200i, has not been under challenge. There was no prcyer by the respondents to^quash the soid amendmenl. Relief nol sought by lhe party cannol be granted by the Court. More so, the direction has been issued by the High Court to grant relief in the impugned^judgement and order taking inlo account the sqid amendment. The sqme is not under challenge at the behesl of the respondents before us. In such an eventualily, it was not desirable for the High Court ,o make attl comment on lhe compelence ofthe State to amend the^poliqt and thelinding so recorded in para i8 of the^judgement cannot be sustqined in the eye of the law, and thus is set aside.^"

¶40

As stated above, the petitioner/defendant ought to have presented a written statement of its defence on or before 03.09.2022 but^presented it on 09.02.2023 with a delay of 159 days. The petitioneridefendant cannot be allowed to present a written statement of its defence as if it is its right according to its whims and fancies. No leave of the Tribunal is sought for in the instant IA to condone the delay of 159 days in presenting the written statement. The written statement can be accepted and the petitioner/defendant be permitted to contest the case only on condoning the delay. Otherwise, there is no written statement filed by the petitioner/defendant in the eye of law. Therefore, the merits of the case stated in the affidavit accompanying the IA cannot even be looked into. Suffice it to say that the IA fails on this score alone.

¶41

In the above circumstances, the IA is liable to be dismissed for want of requisite and proper specific relief prayed for. Thus, viewed in any angle the petitioner/ defendant is not entitled to get the reliefprayed for in this IA, and there is no merit in the IA. In view of what is borne out by the records and discussed earlier, this Tribunal is of the view that the petitioner/defendant filed the IA suppressing material facts and putting forth falsehood, which amounts to.nothing but an abuse of the process of the Tribunal unnecessarily wasting its valuable time. Therefore, this lA is only to be dismissed

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In the result, IA dismissed. No costs.

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[Dicrated^{to my PA, transcribed by hin,correctedand pronouncedby me in theopen Tributul on lhis ltTe lZdday of} Augusr,20231

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¶45

Y I^IMTIAZALI ] PRESIDING OFFICER

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IN THE DEBTS RECOVERY^TRIBI]NAL.1, KARNATAKA AT^BANGALORE

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PRESENT:^{SRI IMTIAZ ALI} PRESIDING OFFICER

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Dated the 02no^{daY of August,2023}

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INTERLOCUTORY^{APPLICATIONNO. I37 OF2023}

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ORIGINAL APPLICATION^{NO.453OF 2022}

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Between

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lWs NARA Technologies^{Pvt Ltd (OPC)'} No.307, 3'd Floor,^{76 Cross,} Shivananda^{Nagar, NT SandraP'O,} Bangalore,^Kamataka -^560075, represented by^{its Director,} Rikha Devi.

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......'.Petitioner/Defendant

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And

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State Bank of India having its head office^{in Mumbai} and branch^{among other} Places including^an SME^{Centre at No.13, 2A,} Munireddy Layout, Horamavu Main^Road, Banasawadi,^Bangalore, Kamataka - 5601l3' ... Respondent/Applicant^bank

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ORDER

State Bank of India v. M/S Nara Technologies Pvt. Ltd.

Case brief

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State Bank of India v. M/S Nara Technologies Pvt. Ltd.

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