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2001 DIGILAW 713 (CAL)

Eureka Forbes Limited v. Debts Recovery Appellate Tribunal, West Bengal and Andaman Nicober Islands

2001-11-28

Bhaskar Bhattacharya

body2001
JUDGMENT Bhaskar Bhattacharya, J.: This revisional application under Article 227 of the Constitution of India is at the instance of one of the defendants in proceedings under section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ('Act') and is directed against order dated June 1, 2001 passed by the Debts Recovery Appellate Tribunal thereby affirming order dated August 9, 1999 passed by the Presiding Officer, Debts Recovery Tribunal in Misc. Case No. 19 of 1998 arising out of T. A. No. 15 of 1994. 2. There is no dispute that the bank filed a suit against the petitioner and other respondents being Title Suit No. 29 of 1988 in the 2nd court of learned Assistant District Judge, Alipore. In the year 1989 the present petitioner entered appearance and filed a separate written statement opposing the prayer of the bank. On coming into operation of the Act the said suit was transferred to the Debts Recovery Tribunal, Calcutta and was re-numbered as T. A. No. 15 of 1994. It is admitted that fresh notice upon the petitioner was served from the Debts Recovery Tribunal and the petitioner engaged an advocate to enter appearance in the said proceedings. 3. Ultimately as nobody contested the said proceedings before the Debts Recovery Tribunal on behalf of the petitioner, the same was decreed ex parte on June 30, 1995. 4. There is also no dispute that notice of demand was served upon the petitioner in the month of August 1995 pursuant to the said decree and after receiving such notice the present petitioner filed a writ application before this Court challenging the vires of the Act and the said writ application is still pending. Subsequently, in execution proceedings some orders having been passed appointing Receiver and authorizing him to break open padlock, the petitioner filed an interlocutory application in the said writ proceedings challenging such interlocutory orders passed in the execution proceedings. Subsequently, the petitioner filed another application under Article 227 of the Constitution of India challenging a further order passed by the Debts Recovery Tribunal dated August 27, 1996 in the execution proceedings and all those applications are pending. Subsequently, the petitioner filed another application under Article 227 of the Constitution of India challenging a further order passed by the Debts Recovery Tribunal dated August 27, 1996 in the execution proceedings and all those applications are pending. In the year 1998 all on a sudden the petitioner notwithstanding pendency of those applications before this court came up with a miscellaneous case thereby praying for setting aside ex parte decree dated June 30, 1995 and for rehearing of the suit on merit. The said application gave rise to Misc. Case No. 19 of 1998. 5. It appears that in paragraph 14 of the said application the petitioner simply stated that it had taken charge from the previous advocate-on-record viz. M/s. Mallick & Pal it and thereafter has been advised to file the said application. According to the petitioner its previous advocate did not advise of file any application for setting aside ex parte order. 6. The petitioner also prayed for condonation of about 3 years delay in filing the said miscellaneous case. 7. The learned Tribunal by order dated August 19, 1999 rejected such application holding that no sufficient cause has been made out explaining the delay in filling the application. 8. Being dissatisfied, the petitioner preferred an appeal before the Debts Recovery Tribunal and by the order impugned in this application the said appellate authority has dismissed the appeal thereby affirming the order passed by the Debts Recovery Tribunal. 9. Being dissatisfied, the petitioner has come up with the instant revisional application under Article 227 of the Constitution of India. 10. Mr. Mitra, the learned senior counsel appearing on behalf of the petitioner tried to convince this court that the learned authorities below acted illegally and with material irregularity in rejecting the application for condonation of delay by not following the well accepted principles laid down by the Apex Court in various decisions. According to Mr. Mitra, the Tribunal lacked inherent jurisdiction to pass any decree against his client as his client was not a 'debtor' within the meaning of the Act. Mr. Mitra contends that if a Tribunal lacks inherent jurisdiction such decree can be challenged at any stage whenever it is sought to be enforced and thus can be challenged even in execution. Mr. Mitra, the Tribunal lacked inherent jurisdiction to pass any decree against his client as his client was not a 'debtor' within the meaning of the Act. Mr. Mitra contends that if a Tribunal lacks inherent jurisdiction such decree can be challenged at any stage whenever it is sought to be enforced and thus can be challenged even in execution. Mr. Mitra contends that his client has a strong case on merit and in such a case the Tribunal below ought to have liberally considered the application for condonation of delay. According to Mr. Mitra, his client was bona fide proceeding in other forums and as the previous learned advocate did not advise the petitioner to file the instant proceedings for setting aside ex parte decree, it could not file the application earlier. Mr. Mitra submits that his dient can get the full remedy only by filing an application for setting aside ex parte decree as advised by its present lawyer. 11. After hearing Mr. Mitra appearing on behalf of the petitioner and after going through the materials on record I fully agree with the Tribunals below that the present proceedings have been initiated by the petitioner mala fide with the sole object of delaying the execution of a decree passed in the year 1995. It has been rightly pointed out by those Tribunals that after filing written statement in the suit in 1989 till the decree was passed in 1995 by the Tribunal below, the petitioner took no step in the original proceedings. There is no scope of doubt that notice of the proceedings was served though the Tribunal and the petitioner entered appearance through a lawyer. No reason has been assigned in the application what prevented the learned advocate-on-record of the petitioner from contesting the proceedings before the Tribunal. In paragraph 5 of the application before the Tribunal it has simply been stated that "although the petitioner engaged Mr. H. P. Basu of M/s. Mallick & Palit, solicitors to look after the petitioner's interest in the said matter, the said advocates chose not to appear in the proceedings for and on behalf of the petitioner and consequently the certificate was passed by the Tribunal in favour of the plaintiff'. H. P. Basu of M/s. Mallick & Palit, solicitors to look after the petitioner's interest in the said matter, the said advocates chose not to appear in the proceedings for and on behalf of the petitioner and consequently the certificate was passed by the Tribunal in favour of the plaintiff'. It appears that the very same advocate-on-record has preferred writ application before this court challenging the vires of the Act and had also filed subsequent application under Article 227 of the Constitution of India impugning order passed in execution proceedings and the petitioner has obtained interim orders in those proceedings before this court. It is not the case of the petitioner that it has abandoned those proceedings and by the advice of the new lawyer has confined itself to the present proceedings. It appears that although those matters are still pending, the petitioner by filing instant proceedings has tried to find out an additional avenue for stalling the execution proceedings. 12. I am unable to accept the contention of Mr. Mitra that in proceedings of the nature of Order 9 Rule 13 of the Code of Civil Procedure, a court notwithstanding service of summons or absence of sufficient cause, can allow such application if the defendant shows strong case in the merit. In my view, in such proceedings, the investigation of the court is limited to the point whether summons was duly served and if served, whether the defendant was prevented by sufficient cause from appearing when the suit was decree ex parte. In such proceedings, the court cannot enter into the question whether the defendant has a strong case on merit of the suit. In the instant case there is no dispute that summons has been served upon the petitioner. Therefore, only question is whether the petitioner was prevented by sufficient cause when ex parte decree was passed. I have already pointed out that from 1989 till 1995 apart from filing written statement no step has been taken. Although in paragraph 5 of the application the petitioner has simply alleged that his learned advocate chose not to appear, at the time of hearing Mr. I have already pointed out that from 1989 till 1995 apart from filing written statement no step has been taken. Although in paragraph 5 of the application the petitioner has simply alleged that his learned advocate chose not to appear, at the time of hearing Mr. Mitra relied upon a letter sent by the said lawyer to the Tribunal by a Registered Post keeping on record that on the date of appearance the Tribunal did not sit and as such a request was made that no decree should be passed ex parte in future. In my view, by writing such a letter, the petitioner cannot evade its liability to appear on the next date. If on the date fixed for appearance in a suit, a court for some reasons does not sit, that does not vest a defendant who has entered appearance in the proceedings with a right not to ascertain the next date or not to appear on the subsequent dates. Even after knowing that an ex parte decree has been passed, the said learned advocate initiated writ application and further an application under Article 227 of the Constitution before this court and those proceedings are still being proceeded with by the petitioner with the benefit of interim order passed therein. Even if I accept the contention of Mr. Mitra that his client has got strong case on merit and that the decree passed by the Tribunal lacked inherent jurisdiction, in such a case, the petitioner can successfully challenge such order even in execution proceedings and it has actually challenged orders passed in execution proceedings before this court by filing the application under Article 227 of the Constitution of India. But a strong case on merit cannot be a ground for setting aside ex parte decree when summons has been served and the petitioner entered appearance through a lawyer but took no step from 1994 till 1995 and even earlier after filing written statement in 1989. 13. I now propose to deal with the cases cited by Mr. Mitra. In the case of State of West Bengal vs. The Administrator, Howrah Municipal Corporation and Ors., reported in 1972(1) SCC 366 , it was held by the Apex Court that the word 'sufficient cause' should receive a-liberal construction so as to advance substantial justice when no negligence or inaction or want of bona fide is imputable to a party. Mitra. In the case of State of West Bengal vs. The Administrator, Howrah Municipal Corporation and Ors., reported in 1972(1) SCC 366 , it was held by the Apex Court that the word 'sufficient cause' should receive a-liberal construction so as to advance substantial justice when no negligence or inaction or want of bona fide is imputable to a party. If a party had acted in a particular manner on a wrong advice given by his Legal Adviser, the Apex Court continued, he cannot be held guilty of negligence so as to disentitle the party to plead sufficient cause under section 5 of the Limitation Act. In my view, the said principle cannot have any application to the fact of the present case. In the present case, even in this application for setting aside ex parte decree the petitioner has strongly relied upon the merit of the defence that Tribunal lacked inherent jurisdiction to pass the decree. Therefore, such defence can be taken even in execution proceedings and as such its learned advocate rightly advised to file application under Article 227 of the Constitution of India against orders passed by the Executing Court and if the petitioner succeeds in its contention that the Tribunal really lacked inherent jurisdiction, the petitioner can have his remedy against order passed in execution proceedings. But in the proceedings akin to Order 9 Rule 13 of the Code of Civil Procedure, there is no scope of advancing a point that the Tribunal lacked inherent jurisdiction. Therefore in this case it cannot be said that the learned lawyer misadvised him to proceed with the revisional application under Article 227 of the Constitution of India against orders passed by the Executing Court. The petitioner in the present proceedings has not made out any case what prevented him from contesting the proceedings from 1989 till 1995. Since the petitioner had no answer, its previous lawyer rightly did not advise to file the instant application. 14. In the case of N. Balakrishnan vs. M. Krishnamurthy, reported in 1998 (7) SCC page 123, it has been held that the primary function of the Court is to adjudicate the dispute between the parties and to advance substantial justice. Since the petitioner had no answer, its previous lawyer rightly did not advise to file the instant application. 14. In the case of N. Balakrishnan vs. M. Krishnamurthy, reported in 1998 (7) SCC page 123, it has been held that the primary function of the Court is to adjudicate the dispute between the parties and to advance substantial justice. The condonation of delay according to the Supreme Court is a matter of discretion of the Court and section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay, the Apex Court held, is no matter but acceptability of the explanation is the only criterion. The aforesaid proposition of law is beyond any controversy. I have already pointed out that in the instant case no sufficient cause has been shown what prevented the petitioner from contesting the proceedings and at the same even after knowledge of ex parte decree the petitioner rightly approached the other forum as his defense is that the Tribunal lacked inherent jurisdiction to entertain the proceedings. Thus, the said decision does not help the petitioner. 15. In the case of Collector, Land Acquisition, Anantnag & Ors. vs. Mst. Katiji & Ors., reported in 1987 (2) SCC page 107, all that was held by the Apex Court was that the court should adopt liberal and justice oriented approach in the matter of condonation of delay. By relying upon the aforesaid decision Mr. Mitra contends that in the said decision the Supreme Court considered that the petitioner therein had a very strong case in merit and that is why set aside the order passed by the High Court and delay was condoned. I have already pointed out that so far application for setting aside ex parte decree is concerned, if this court is asked to enter into merit, I am of the view that petitioner has no merit in the proceedings because inspite of service of notice, for reason best known to petitioner nobody contested the proceedings. Inaction from 1989 till 1995 has not at all been explained. Therefore on merit of the miscellaneous proceedings for setting aside ex parte decree, petitioner has no case. The said decision thus cannot have any application to the fact of the present case. Inaction from 1989 till 1995 has not at all been explained. Therefore on merit of the miscellaneous proceedings for setting aside ex parte decree, petitioner has no case. The said decision thus cannot have any application to the fact of the present case. I have already pointed out that merit of the case means merit of the proceedings which have been initiated along with the application for condonation of delay. Thus, we are concerned not with the merit of the suit but the merit of the miscellaneous proceedings for setting aside ex parte decree. The said decision thus cannot help Mr. Mitra's client in any way. 16. In the case of G. Ramegowda vs. Special Land Acquisition Officer, Bangalore, reported in 1988(2) SCC 142 , the Supreme Court was considering whether some privilege should be given when Government files appeal. In such a case, it was held that where delay occurred due to fraud and unusual conduct of the Government Pleader the Court may condone the delay in the facts and circumstances of the case in the interest of justice. In my opinion, the principle laid down in the aforesaid decision cannot benefit the petitioner inasmuch as here no fraud has been alleged. Moreover, I have already indicated that having regard to the defense taken in this application there was no scope of filing proceedings of the nature of Order 9 Rule 13 of the Code and as such the learned lawyer rightly advised to challenge orders passed in execution proceedings under Article 227 of the Constitution of India. Moreover, there being no positive defense for non-appearance before Tribunal after receipt of summons, the learned lawyer rightly did not advise the petitioner to file any proceedings of this nature. The aforesaid decision is thus of no avail to Mr. Mitra's client. 17. In the case of State of Haryana vs. Chandra Mani and Ors., reported in 1996(3) SCC page 132, the Apex Court held that certain amount of latitude within reasonable limit is permissible in case of State's delay in filing appeal having regard to impersonal bureaucratic set up involving red tapism. Such fact is absent in our case and thus the said decision cannot help the petitioner in any way. 18. Thus, the decisions cited by Mr. Mitra cannot help his client in the instant proceedings. 19. Such fact is absent in our case and thus the said decision cannot help the petitioner in any way. 18. Thus, the decisions cited by Mr. Mitra cannot help his client in the instant proceedings. 19. I have already indicated that in the facts of the present case the learned Tribunals-below rightly refused to exercise discretion in favour of the petitioner and thus this court sitting in a jurisdiction under Article 227 of the Constitution of India does not find any reason to upset the concurrent findings. We must bear in mind that the proceedings were initiated in the year 1988, the decree was passed in 1995 and long three years thereafter the petitioner has come up with this additional approach notwithstanding pendency of the other two proceedings before this court. I am at one with the learned Tribunals below that the sole object of the petitioner is to delay the execution of the decree of the year 1995 and the petitioner inspite of having full opportunity did not care to contest the proceedings after filing of written statement in the year 1989. No leniency should be shown to such a petitioner by re-opening a decree passed six years back. I thus find no reason to interfere with the orders passed by the learned Tribunals below. 20. The revisional application is thus dismissed. 21. No costs. Revisional application dismissed.