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2008 DIGILAW 520 (MAD)

Kamaldheep Synthetic Limited, rep. by its Managing Director, Chennai and Another v. Chairman, Debt Recovery Appellate Tribunal, Chennai and Another

2008-02-12

M.VENUGOPAL, SUDHANSU JYOTI MUKHOPADHAYA

body2008
Judgment : M. VENUGOPAL, J. The writ petitioners/appellants have filed W.P. Nos. 27987 of 2007 and 30483 of 2007 as against the orders passed by the first respondent/Debt Recovery Appellate Tribunal, Chennai (DRAT) dated 7.8.2007 and 21.8.2007 in 352 of 2006 respectively. 2. The first respondent/DRAT in 352 of 2006 has passed the following order on 7.8.2007: “Since the Bank of Madura Ltd. had been amalgamated with the ICICI Bank Ltd., the petitioners/appellants are directed to implead the ICICI Bank Ltd., as necessary respondent in this Appeal by 20.8.2007, failing which, the Appeal shall stand dismissed for non-compliance, without any further reference to this Tribunal. Post on 21.8.2007.” 3. On 21.8.2007, the first respondent/DRAT has passed the order in 352 of 2006, which runs as follows: “No representation for the petitioners. Even though the Tribunal directed the petitioners to implead the ICICI Bank Ltd as the Bank of Madura Ltd. 1st respondent has been amalgamated with the ICICI Bank Limited, no steps had been taken so far. Since there is no representation for the petitioners today also, the unnumbered Appeal shall stand dismissed.” 4. The learned counsel for the writ petitioners/appellants urges that when the waiver application came up for, hearing on 7.8.2007 the first respondent/DRAT without hearing the counsel for the writ petitioners/appellants and without even looking into the merits of the case simply passed an order directing the writ petitioners/appellants to implead ICICI Bank as respondent in the appeal and further observed that the appeal will get dismissed if ICICI Bank is not impleaded on or before 20.8.2007 and finally passed orders on 21.8.2007, dismissing the unnumbered appeal among other things observing that “no steps had been taken so far‘. 5. The learned counsel for the writ petitioners relied on decision Naba Kumar Hazra and Another v. Radhashyam Mahish and Others Naba Kumar Hazra and Another v. Radhashyam Mahish and Others Naba Kumar Hazra and Another v. Radhashyam Mahish and Others AIR 1931 PC 229, : (1931) 2 MLJ 294 wherein it is laid down as follows: “A request to be allowed an opportunity of joining some necessary parties to the suit where such a course would necessitate a commencement of the proceedings de novo was disallowed by the Board.” In the aforesaid decision at Pg. No. 230, the learned counsel for the writ petitioners/appellants pressed into service the following observation: ‘Their Lordships also think that the suit must fail upon another ground, viz., that the necessary parties were not before the Court‘. Also on the side of the writ petitioners observation at pg. No. 231 in the decision mentioned supra to the effect that ‘the respondents did not think fit to join their comortgagors as parties to the suit, and issues were raised as to whether the suit was maintainable in this form and whether the respondents could claim accounts in respect of the properties belonging to the comortgagors.‘ is pressed into service before this Court to put forward a plea that the decree is a nullity as the same is in favour of a non existing Bank. 6. The learned counsel for the writ petitioners cited decision Chithuri Rammohana Rao v. Peteti Raghavamma and Others Chithuri Rammohana Rao v. Peteti Raghavamma and Others Chithuri Rammohana Rao v. Peteti Raghavamma and Others , (1941) 1 MLJ 471 , where under it is laid down as follows: “A suit was brought by two daughters to declare that two alienations made by the third defendant their mother in favour of the second defendant (the husband of the plaintiffs‘ sister who was also impleaded as the fourth defendant) were not binding on the plaintiffs and the fourth defendant. The suit was dismissed and in the appeal therefrom by the plaintiffs, the second and third defendants were not impleaded as respondents. The first defendant contended that the appeal was liable to be dismissed in liminein view of the omission to implead the second defendant. It was found that the omission was deliberate and wilful and not due to any mistake. On an application to implead the second defendant after the objection was raised, Held, that there was no jurisdiction to pass an order directing the impleading of the second defendant as a party respondent to the appeal.” 7. Further, the writ petitioners placed reliance on decision (2005) 1 SCC 536 at Pg. No. 537, whereby it is held as under: “ B. Civil Procedure Code, 1908-Section 146, Order 22Rule 10, Order 6Rule 7 and17 andOrder 8Rule 9 -Pleadings that may be taken by successors-in-interest/assignees - Held, cannot be inconsistent with those taken by predecessors-in-interest/assignor.” 8. Further, the writ petitioners placed reliance on decision (2005) 1 SCC 536 at Pg. No. 537, whereby it is held as under: “ B. Civil Procedure Code, 1908-Section 146, Order 22Rule 10, Order 6Rule 7 and17 andOrder 8Rule 9 -Pleadings that may be taken by successors-in-interest/assignees - Held, cannot be inconsistent with those taken by predecessors-in-interest/assignor.” 8. The categorical stand of the writ petitioners/appellants is that the first respondent/ DRAT has no powers to order impleading of ICICI Bank, without hearing the writ petitioners/appellants. 9. The stand taken in the counter filed on behalf of R2 is inter aliato the effect that original application was properly laid by Bank of Madura Limited, who was the lender and the scheme of amalgamation provides for continuation and enforcement of the suits, actions and proceedings of whatsoever nature by or against the Bank of Madura Ltd by ICICI Bank Ltd, as if the same had been filed or arising against ICICI Bank Limited and further that as per the arrangement between the Bank of Madura Ltd and ICICI Bank Ltd, the assets and liabilities of Bank of Madura Limited will get vested with ICICI Bank Ltd end that the ICICI Bank alone will be entitled to enforce the decrees passed in favour of Bank of Madura Ltd, so to honour the decrees passed against Bank of Madura Ltdetc. 10. In our opinion, the main question that falls for our determination is whether the first respondent/DRAT, Chennai has suo motupowers to order for impleading of ICICI Bank as necessary respondent in the appeal before it as per order dated 7.8.2007 and to pass the consequential orders on 21.8.2007e 11. Admittedly, to bring an individual as party is not a substantive right but one of procedure in our considered view. It is pertinent to point out that necessary party is one without whom no order can be effectively passed. Equally a proper party is one who is necessary for final decision of issues involved in the proceedings. 12. In this connection, it is useful to point out that P.W.1 in C.A. No. 1734 of 2001 in his evidence before the DRT-II, Chennai has deposed that ‘now there is no Bank of Madura and till now no steps were taken to amend the cause title of the application‘. 13. 12. In this connection, it is useful to point out that P.W.1 in C.A. No. 1734 of 2001 in his evidence before the DRT-II, Chennai has deposed that ‘now there is no Bank of Madura and till now no steps were taken to amend the cause title of the application‘. 13. According to the learned counsel for the second respondent, Section 44 A of the Banking Regulation Act 1949 enjoins procedure for amalgamation of Banking Companies and that the Reserve Bank of India has sanctioned the scheme of amalgamation of Bank of Madura Ltd (Transferor Bank) with ICICI Bank Ltd and the scheme of amalgamation has come into force from 10.3.2001, as per RBI Central Office order dated 26th February. 14. A reading of the entire Act of the Recovery Of Debts Due to Banks and Financial Institutions Act 1993 shows that the act confers no suo motupowers on the Debts Recovery Tribunal/Debts Recovery Appellate Tribunal nor semblance of such powers can be gathered. As a matter of fact, Section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 cannot be construed to mean that the Tribunals have suo motupowers, notwithstanding the fact that the Tribunal/Appellate Tribunal is not bound by procedure as per the Civil Procedure Code and it may be guided by the principles of natural justice and subject to other provisions of the Act and Rules. 15. The petitioner challenged the order passed by Tribunal en the ground that the said order was passed against a non-existent party. In the appeal, the Appellate Tribunal is supposed to decide such issue. Without deciding such issue, if the Tribunal directs the petitioner to implead ICICI as party respondent to the appeal, such order will frustrate the question raised in the appeal. If one or other necessary party is not impleaded, it is always open to a Court to pass such order after determination of the issue while deciding the issue on merits. 16. If one or other necessary party is not impleaded, it is always open to a Court to pass such order after determination of the issue while deciding the issue on merits. 16. Inasmuch as the first respondent/ DRAT has no suo motupowers to direct the impleading of ICICI Bank Ltd as necessary respondent in the appeal before it as per Section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 and the impugned order will frustrate the issue as raised by the petitioner before the Appellate Tribunal, we are of the opinion that the orders passed by the first respondent/DRAT on 7.8.2007 in 352 of 2006 and the consequential order passed on 21.8.2007 thereto in dismissing the unnumbered appeal are not correct and accordingly, we are inclined to interfere with the said orders passed by the first respondent/DRAT and accordingly, set aside both the orders passed in 352 of 2006 and consequently, allow both the writ petitions to prevent aberration of justice. Bearing in mind the facts and circumstances of the case, there shall be no order as to costs.