Ultra Scientific Animal Healthcare Ltd. v. The Nedumgadi Bank Ltd.
2002-07-11
R.BHASKARAN
body2002
DigiLaw.ai
Judgment :- R.Bhaskaran, J. This original petition is filed under Articles 226 and 227 of the Constitution to quash Ext.P3 order passed by the Debt Recovery Tribunal, Ernakulam. The petitioner is the first respondent before the Debt Recovery Tribunal. The Original Application was for realization of amounts due to the first respondent bank on cash credit account. On 22-6-2001, an ex parte order was passed against the respondents therein. The petitioner submitted I.A.No.971 of 2001 for setting aside the exparte order. The grounds stated in the petition was that the petitioner had not received any notice or summons in the O.A. No. registered cover was tendered to the petitioner by the postal authorities at Vannamada Post Office where the office of the petitioner is situated. Petitioner also did not come across any newspaper publication regarding the notice of filing of the O.A. The 5th respondent, Kerala Financial Corporation, a Government of Kerala Undertaking, also is understood to have not received any notice and all the defendants were set ex parte. The Tribunal by Ext.P3 order dismissed the applications in the following words: "Heard both sides. The order was passed on 22-6-2001; the defendants had not raised any contest in the O.A. and so was the case disposed of on hearing the counsel for the applicant considering the merits of the O.A. The petitioners ought have taken up the matter in appeal, in view of the order dated 22-6-2001. I.A. therefore stands dismissed." 2. The learned counsel for the petitioner submitted that the above order is patently illegal and there is failure to exercise jurisdiction. It was quite unreasonable to hold in an application to set aside the ex parte order that the order was passed as the defendants had not raised any contest. The question to be considered by the Tribunal was whether there was reasonable ground to set aside the ex parte order. If only the defendants were served with notice or had knowledge of the pendency of the O.A. and they have not raised any contest, there was justification for the Tribunal to pass the order. But without a finding that the notice was really served on the defendants and they refused to contest the matter, the present order is unsustainable.
If only the defendants were served with notice or had knowledge of the pendency of the O.A. and they have not raised any contest, there was justification for the Tribunal to pass the order. But without a finding that the notice was really served on the defendants and they refused to contest the matter, the present order is unsustainable. It is also argued that equally erroneous is the further observation of the Tribunal that the petitioners ought to have taken up the matter in appeal in view of the order dated 22.6.2001. It is submitted that the Tribunal has not taken note of the provisions contained in Sec. 22(2)(g) of the Recovery of Debts due to Financial Institutions Act which specially provides for power to the Tribunal to set aside an order passed by it ex parte. Therefore, the observations that the ex parte order should have been taken up in appeal as if the Tribunal has no power to set aside the ex parte decree is also vitiated by errors apparent on the face of the record. When large amounts are claimed in the O.A. and the petitioner contends that he had objection to several items of claims, the Tribunal should have considered whether it was not a proper and fit case to give an opportunity to the defendants to contest the case on merits rather than disposing of the matter ex parte. 3. The learned counsel appearing for the 1st respondent submitted that a Divisional Bench of this court in O.P.No.20397 of 2000 has dismissed a similar O.P. and therefore this O.P. has also to be dismissed. In view of the above submission, I called for the judgment and copy of the O.P. and it is found that in that O.A. when the application to set aside the exparte order came up for hearing, the petitioner or his counsel was absent and therefore the application was dismissed. In such circumstances, this court refused to interfere stating that there is an effective alternate remedy under the provisions of the Act.
In such circumstances, this court refused to interfere stating that there is an effective alternate remedy under the provisions of the Act. The case on hand is not a similar case as the Tribunal has assumed that even if the defendants are ex-parte they should have contested the case and the further observation that the petitioner ought to have taken up the matter in appeal proceeds on the basis that there is no power with the Tribunal to set aside the ex parte order. Both these assumptions are unwarranted. Therefore, I do not think that the Division Bench decision is of any help to the first respondent. 4. The learned counsel appearing for the petitioner on the other hand brought to my notice a decision of the Constitution Bench of the Supreme Court reported in A.V.Venkataeswaran v. R.S. Wadhwani (AIR 1961 SC 1506) where a similar contention raised by the counsel for the Collector of Customs was rejected. The Supreme Court stated in paragraph 9 of the judgment as follows: "9. We see considerable force in the argument of the learned Solicitor-General. We must, however, point out that the rule that the party who applies for the issue of a high prerogative writ should, before he approaches the court, have exhausted other remedies open to him under the law, is not one which bars the jurisdiction of the High Court to entertain the petition or to deal with it, but is rather a rule which courts have laid down for the executive of their discretion." It is also stated in the same judgment in paragraph 10 as follows: "10. The passages in the judgments of this Court we have extracted would indicate (1) that the two exceptions which the learned Solicitor-General formulated to the normal rule as to the effect of the existence of an adequate alternative remedy were by no means exhaustive, and (2) that even beyond them a discretion vested in the High court to have entertained the petition and granted the petitioner relief notwithstanding the existence of an alternative remedy.
We need only add that the broad lines of the general principles on which the Court should act having been clearly laid down, their application to the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper exercise of the discretion of the Court, and that in a matter which is thus pre-eminently one of discretion, it is not possible or even if it were, it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case which comes up before the Court." The learned counsel for the petitioner relied on the decision in Ram and Shyam Co. v. State of Haryana (AIR 1985 SC 1147), the Supreme Court has held as follows: "Before we deal with the larger issue, let me put out of the way the contention that found favour with the high Court in rejecting the writ petition. The learned single Judge as well as the Division Bench recalling the observations of this court in Assistant Collector of Central Excise v. Jainson Hosierty Industries (1979)4 SCC 22: (AIR 1979 SC 1889) rejected the writ petition observing that the petitioner who invokes the extraordinary jurisdiction of the court under Article 226 of the Constitution must have exhausted the normal statutory remedies available to him. We remain unimpressed. Ordinarily it is true that the court has imposed a restraint in its own wisdom on its exercise of jurisdiction under Article 226 where the party invoking the jurisdiction has an effective, adequate alternative remedy. More often, it has been expressly stated that the rule which requires the exhaustion of alternative remedies is a rule of convenience and discretion rather than rule of law. At any rate it does not oust the jurisdiction of the Court. In fact in the very decision relied upon by the High Court in the State of U.P v. Mohammed Nooh 1958 SCR 595: (AIR 1958 SC 86) it is observed - that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy.
In fact in the very decision relied upon by the High Court in the State of U.P v. Mohammed Nooh 1958 SCR 595: (AIR 1958 SC 86) it is observed - that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It should be made specifically clear that where the order complained against is alleged to be illegal or invalid as being contrary to law, a petition at the instance of person adversely affected by it, would lie to the High Court under Art. 226 and such a petition cannot be rejected on the ground that an appeal lies to the higher officer or the State Government. An appeal in all cases cannot be said to provide in all situations an alternative effective remedy keeping aside the nice distinction between jurisdiction and merits." In Shama Prashant Raje v. Ganapathrao (2000)7 SCC 522), the Supreme Court held as follows: "The jurisdiction of the High Court, therefore, is supervisory and not appellate. Consequently, Article 226 is not intended to enable the High Court to convert itself into a court of appeal and examine for itself the correctness of the decision impugned and decide impugned and decide what is the proper view to be taken or order to be made. But notwithstanding same, on a mere perusal of the order of an inferior tribunal if the High Court comes to a conclusion that such tribunal has committed manifest error by misconstruing certain documents, are the High Court comes to the conclusions that are on the materials it is not possible for a reasonable man to come to a conclusion arrived at by the inferior tribunal or the inferior tribunal has ignored to take into consideration certain materials which are nor admissible, then the High Court will be fully justified in interfering with the findings of the inferior tribunal. In Sugarbai M. Siddiq v. Ramesh S. Hankare (2001) 8 SCC 477), the Supreme Court has held that under Article 227 of the Constitution, the High Court has to see whether the lower court/tribunal has jurisdiction to deal with the matter and if so, whether the impugned order is vitiated by procedural irregularity; in other words, the Court is concerned not with the decision but with the decision-making process.
A Division Bench of this court in Sreekanta Bhasi v. University of Kerala (1996 (1) KLT 626) has held that whenever there is an alternative remedy, the High Court should refuse to exercise its jurisdiction under Article 226 of the Constitution and in the case of patent illegalities and on account of lack of jurisdiction this Court would exercise jurisdiction under Article 226 of the Constitution of India and will not relegate the parties to the alternate remedies. 5. Learned counsel appearing for the 1st respondent relied on the following passage at paragraph 6 of the decision in Punjab National Bank v. O.C. Krishnan (2001) 6 SCC 569) which reads: "6. It is no doubt true that the scope of interference under Article 226 of the Constitution is very limited, but that is only in the nature of a judicial review of the proceedings and not by way of appeal or revision where the scope of interference is much wider. In cases of the present nature where several methods are available for finding out the value of the property and if one or the other method is adopted by the Department and that may be reasonable, it may not call for any interference. However, if there are loopholes or lacunae in the process of reasoning adopted by that authority in reaching the conclusion as in the present case that the tenanted property would be vacated soon or that the property is close to the vicinity of the situation of the subject property if compared, adopting different methods of valuation, then the parties who appear before the authorities will definitely have a reason to have heartburn. If one method of valuation is adopted and benefit is given to one party then why that method is not adopted in the other case to reach the conclusion the other way is not clear and in our opinion it is unjustifiable. If in this background the High Court examined the matter and arrived at a conclusion one way or the other, we do not think it is necessary for us to interfere with that finding in a proceeding arising under Article 136 of the Constitution. In that case the Supreme Court was dealing with quashing of a final judgment of the Tribunal by the High Court in exercise of the powers under Art. 227 of the Constitution of India.
In that case the Supreme Court was dealing with quashing of a final judgment of the Tribunal by the High Court in exercise of the powers under Art. 227 of the Constitution of India. In this case, it is only an application to set aside the ex parte order that was not considered on merits but an order passed rejecting the same. If the petition was considered on merits but an order passed rejecting the same. If the petition was considered on merits and a finding entered into, perhaps it would be open to the respondent to contend that an appeal has to be finding against that finding. Since no finding is entered into on merit, the order under challenge has to be set aside. The Supreme Court in I.C.I.C.I Ltd. v. Grapco Industries Ltd. (AIR 1999 SC 1975) was also dealing with a case under the Recovery of Debts Due to Banks and Financial Institutions Act and taking note of the provisions in the Act it is held that the High Court has jurisdiction to interfere under Article 227 with interim orders. 6. It is unnecessary to multiply authorities on the scope of interference under Article 226 or 227 of the Constitution. Suffice it to notice that the Tribunal has not considered the question whether there was sufficient reason for the petitioner to be absent when the case was called. Since the Tribunal has not considered that aspect this Court has no other alternative except to quash Ext.P3 and direct the Tribunal to consider whether there is any willful negligence on the part of the petitioner in not appearing before the Tribunal and to take a decision on merits. In view of the above discussion, this O.P. is allowed and Ext.P3 is quashed and the Tribunal is directed to reconsider I.A.No. 971 of 2001 in O.A.No.313 of 2000 after hearing both sides. Parties have agreed to appear before the Tribunal on 6-8-2002.