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1983 DIGILAW 221 (DEL)

QUALITY POLY VINYLS PRIVATE LIMITED v. DELHI FINANCE CORPORATION

1983-08-02

M.L.JAIN

body1983
M. L. Jain, J. ( 1 ) THIS order will dispose of F. A. O. 243 of 1982, F. A O. 244 of 1982 and G. M. 235 of 1982. ( 2 ) THE Delhi Financial Corporation filed an application on 26-10-1978under Section 31 read with Section 32 of the State Financial Corporation Act,1951 (the Act) against M/s Quality Poly Vinyls (P) Ltd. for recovery of asum of Rs. 4,56,811. 59. The learned Additional District Judge issued an adinterim injunction restraining the firm from transferring the assets and an adinterim order of attachment of security. A show cause notice was issuedunder Sub-section (4) of Section 32 of the Act as to why the interim order ofattachment should not be made absolute and injunction confirmed. Thecompany showed cause and filed a written statement on 6-2-1980. Replicationwas filed in March, 1980 on behalf of the Corporation. Issues were framed. The evidence of the Corporation was closed on 8-9-1980. Case was adjournedfor the evidence of the company. On 27-10-1980 the company moved twoapplications, one under Order 1 Rule 10 and the other under Order 6 Rule17, Code of Civil Procedure, 1908. Replies were filed on 28-11-80. The casewas fixed for arguments on the aforesaid two applications and after someadjournments it ultimately stood adjourned to 17-3-1981 for the same purpose. On that date nobody appeared for the company. The learned Additionaldistrict Judge rejected the two applications, proceeded ex-parte, heardarguments and delivered judgment on the same date. The learned Additionaldistrict Judge decreed the aforesaid amount in favour of the Corporationand directed that the Corporation shall be entitled to realise the decretalamount by sale of the mortgaged property. ( 3 ) THE company filed an application on 18-3-1981 under Order 9 Rule13, C. P. G. for setting aside the ex-parte order. That application was dismissedin default on 14-7-1981. Application for restoration thereof was filed on20-7-1981. It was accepted on 7-7-1982. The application was restored andrejected by the learned Additional District Judge by his order of 4-8-1982. The company filed an appeal FAO 244 of 1982 on 30-8-1982. Simultaneously,the company also filed an appeal against the decretal order of 17-3-1981 on30-8-1982. Alongwith this appeal an application under Section 5of the Limitation Act, 1963 was also filed. The company also filed on31-8-1982 a G. M (M) 235 of 1982 under Article 227 of the Constitutionagainst the order of the Additional District Judge dated 4-8-1982. Simultaneously,the company also filed an appeal against the decretal order of 17-3-1981 on30-8-1982. Alongwith this appeal an application under Section 5of the Limitation Act, 1963 was also filed. The company also filed on31-8-1982 a G. M (M) 235 of 1982 under Article 227 of the Constitutionagainst the order of the Additional District Judge dated 4-8-1982. ( 4 ) THE cause shown for nonappearance on 17-3-1981 was that thecounsel for the company got busy in the High Court and while coming toattend the court his car went out of order on way and he got delayed. Thedirector of the company could not attend the court due to the sudden deathof a close relative of his. Counsel for the respondent appeared at 12-30 p. m. By then the order of 17-3-1981 had been passed. Counsel made the application on 18-3-1981 for setting aside the ex-parte order. The learned Judgedid not go into the merits of the application. The ground for rejecting thelaid application under Order 9 Rule 13 Civil Procedure Code was that it was not maintainablebecause the special law, namely, the Act provides for an appeal against theorder made under Sub-section (7) of Section 32 of the Act. For this view,he relied upon M/s Rajdhani Enterprises v. Haryana Financial Corporationand others, 1970 0 PLR 491. In this case, it was held that Order 9 Rule 13applies to a decree and an order under Sub-section (7) of Section 32 of theact was not a decree. The only remedy available to the aggrieved party wasto file an appeal under Section 32 (9) of the Act against the ex-parte orderwithin 30 days of the order. The learned counsel for the Corporation submitted before me that the view adopted by the Punjab and Haryana Highcourt was supported by the Gujarat State Financial Corporation v. M/snatson Manufacturing (P)Ltd. and others, AIR 1978 S. C. 1765 and M/sparkash Playing Cards Manufacturing Co. v. Delhi Financial Corporation, AIR198u Delhi 48. These decisions have held that an application under Section31 of the Act was not a suit. The learned counsel urged that since it is not asuit, the adjudication under the Act cannot be called a decree. A decree asdefined in Section 2 (2), C. P. G. can be made only with regard to matters incontroversy in a suit. It was further contended that the scope of investigationunder the Act is very narrow and limited. The learned counsel urged that since it is not asuit, the adjudication under the Act cannot be called a decree. A decree asdefined in Section 2 (2), C. P. G. can be made only with regard to matters incontroversy in a suit. It was further contended that the scope of investigationunder the Act is very narrow and limited. It does not contemplate theinvestigation of each and every plea that might be raised before the Districtjudge by either party: Bhawani Parshad Kapur v. Himachal Pradesh Financialcorporation, AIR 1983 H. P. 43. On the other hand in Industrial Financialcorporation of India v. Thakur Paper Mills, AIR 1973 M. P. 175, while dealing with an analogous provision of the Industrial Financial Corporation Act,1948, it was held that such proceedings are of the kind contemplated bysection 141, Civil Procedure Code This view was followed in Durlabh Kumar v. The Districtjudge and another, AIR 1973 M. P- 175. Section 32 (6) of the Act requires thatthe District Judge shall proceed to investigate the claim of the Corporation inaccordance with the provisions contained in Code of Civil Procedure 1908, in80 far as such provision may be applied thereto. Now, I see no difficulty whythe provisions of Order 9 and Rule 13 thereof in particular cannot be appliedto an order made ex-parte under Section 32 of the Act, as if it were a decreeex-parte. In In Agnew Drums (Pvl.) Ltd. and others v. Maharashtra Statefinancial Corporation and others, AIR 1972 SC. 801 , the District Judgedirected sale of the property and passed an order for issue of sale proclamation under Order 21 Rule 66, G. P. G. According to Section 32 (8) of theact, an order of attachment and sale shall be carried into effect as far aspracticable in the manner provided in Civil Procedure Code for the attachment and sale asof the Corporation was a decree holder. The sale took place but the borrowercompany challenged the sale. The District Judge dismissed the Company sapplication. The company appealed under Order 43 Rule 1 (5 ). The Highcourt dismissed the appeal on the ground that no appeal lay. The Supremecourt held that the District Judge was not a persona designata, and it isdifficult to understand why the scope of the language should be cut down bynot including appeals provided under Civil Procedure Code within the ambit of the words"in the manner provided in the Code of Civil Procedure". The Supremecourt held that the District Judge was not a persona designata, and it isdifficult to understand why the scope of the language should be cut down bynot including appeals provided under Civil Procedure Code within the ambit of the words"in the manner provided in the Code of Civil Procedure". Thus, it was clearthat the order of attachment or sale is like a decree and the Code of Civilprocedure applies to it. The order of 17-3-1981 was an order for sale ifmoneys were not paid. Indeed, it was correctly described as a decree andthe application was correctly registered as a suit. It has all the elements of adecree. Therefore, Order 9 Rule 13 is attracted and the order of 4-8-1982deserves to be set aside. As to merits it proved that counsel could not reachin time and the application was moved next day. There is sufficient cause fordefault and the application deserves to be accepted. ( 5 ) WITH great respect, for the reasons aforesaid I am not inclined toaccept fully the view taken in Rajdhani Enterprises (supra ). In case of an exparte decree, two remedies are available to the defendant. He can file anappeal, or can file an application under Order 9 Rule 13. Same is the case inrespect of an order made under Sub-section (7) of Sec. 32 of the Act. Theparty could do one or both. He has done both but his appeal was timebarred. The learned counsel for the appellant submitted that (1) the periodapent in Order 9 Rule 13 proceedings be excluded and in that case the appealwill be in time and (2) the appellant has moved an application C. M. No. 2982 of 1982 under Section 5 of the Limitation Act to condone the delay. ( 6 ) THE learned counsel for the respondent opposed these requests onthe ground that they are not bona-fide. He pointed out that the companyhad obtained a copy of the decree but the appeal was filed on 30-8-1982. Even otherwise the appellant has been delaying the proceedings. In thecircumstances of the case, it seems to me that there was no need to file theappeal against the order of 17-3-1981. It was done by way of caution andthe time consumed in Order 9 Rule 13 proceedings deserve to be excluded. If the time is not excluded, it is otherwise a fit case for condonation of delayas well. In thecircumstances of the case, it seems to me that there was no need to file theappeal against the order of 17-3-1981. It was done by way of caution andthe time consumed in Order 9 Rule 13 proceedings deserve to be excluded. If the time is not excluded, it is otherwise a fit case for condonation of delayas well. ( 7 ) THE learned counsel for the appellants submitted that the impugnedorder of 17-3-1981 has been passed without hearing the debtor. On 17-3-1981,the case was fixed for arguments on the two applications. The court at themost could have dismissed those applications and adjourned the case for theevidence and arguments of the appellant. The learned Judge has passed theorder without giving proper and effective hearing to the appellant and hasthus committed breach of the principles of natural justice. If it is held thatthe appeal is not maintainable, it WJS a fit case in which supervisory jurisdiction should be exercised. I agree. ( 8 ) CONSEQUENTLY, I set aside the impugned order of 17-3-1981 and4-8-1982, accept the application under Order 9 Rule 13 and direct thelearned Additional District Judge to hear the said two applications and dispose of them and then proceed to deal with the main claim. There shall beno order as to costs,the two appeals and the miscellaneous petition hall stand disposed ofaccordingly.