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2009 DIGILAW 747 (KER)

Summer Sand Hill Resorts v. State Bank Of India

2009-08-11

P.R.RAMACHANDRA MENON

body2009
Judgment :- (C.R.) Whether a Civil court or DRT, while passing orders, accepting the contentions of the defendant to set aside an ex parte decree, is justified in directing the concerned party to effect a portion of the Decretal amount or should it be confined to imposition of Cost, is the main issue involved in this case. Yet another point is also involved, in so far as when the challenge raised by the petitioners against the direction to deposit a portion of the Decretal amount, the Appellate Tribunal has virtually enhanced the liability almost by doubling the amount ordered to be paid by the DRT, correctness of which is also subjected to challenge. 2. The petitioners herein are the defendants No.1 to 3 in O.A. NO. 244 of 2007 before the DRT, Ernakulam. But since the Managing Director of the first petitioner, was stated as abroad, the matter could not be pursued with proper vigil and attention. In the said circumstances, the O.A. was not properly contested, leading to an ex parte decree followed by issuance of recovery certificate and the consequential proceedings initiated at the instance of the recovery officer as well. Met with the said circumstances, the petitioners filed three different I.As. before the Tribunal, viz., I.A. 1648 of 2008 to condone the delay in filing the application to set aside the ex parte verdict , I.A. 1649 of 2008 to set aside the ex parte verdict itself and I.A. 1650 of 2008 to stay the recovery proceedings. After considering the facts and figures, the DRT passed Ext.P1 common order, whereby the I.A.s were allowed, subject to the condition that the petitioners deposited 10% of the O.A. claim amount, i.e. Rs. 2,55,37,270.82/-within the time specified. Contending that the Tribunal was not justified in directing the petitioners to remit a portion of the Decretal amount, as a condition to set aside the ex parte decree, the petitioners approached the Appellate Tribunal, which led to Ext.P2 order, whereby the Appellate Tribunal, while sustaining the reasoning given by the DRT for imposing the condition, observed that the petitioners/appellants were liable to deposit "20%" of the O.A. claim amount, i.e. virtually by doubling the amount ordered by the DRT. The petitioners have approached this Court challenging the orders passed by the DRT as well as the Appellate Tribunal, on many a ground, legal as well as factual. 3. Mr. The petitioners have approached this Court challenging the orders passed by the DRT as well as the Appellate Tribunal, on many a ground, legal as well as factual. 3. Mr. K.P. Dandapani, the learned Senior Counsel appearing for the petitioners submits that there is absolutely no power for the DRT or the Appellate Tribunal to direct the defendants to deposit a portion of the claim amount, as a condition to allow the I.As filed to set aside the ex parte decree. The power in this regard could not have been anything more than to have imposed Cost, if necessary. In any view of the matter, the power exercised by the Tribunal, directing to deposit a portion of the decretal amount is totally alien to the known principles of the law, submits the learned Sr. Counsel. The learned Senior Counsel also places reliance on the decisions rendered by the Apex Court in V.K. Industries vs. M.P. Electricity Board, Rampur [AIR 2002 SC 1151] and in Vijay Kumar Madan vs, R.N. Gupta Technical Education Society [(2002)5 SCC 30] in support of the above contention. 4. The learned Counsel for the respondent Bank submits, that the contention of the petitioners that there is no power to impose the condition as in the instant case, is wrong and misconceived. Placing reliance on the decisions rendered by the Apex Court in V.K. Industries vs. M.P. Electricity Board, Rampur [AIR 2002 SC 1151] = [(2002) 3 SCC 159], the learned Counsel submits that the law has been declared by a 'Three Members Bench' of the Apex Court and as discernible from paragraph '5' of the said verdict, it has been specifically held that the Court may impose condition to deposit Costs or the Decretal amount or some portion thereof or to ask the defendant to furnish Security, but such condition should be reasonable and not harshly excessive. The learned Counsel also places reliance on the subsequent decision rendered by a 'Two Members Bench' of the Apex Court in Ramesh vs. Ratnakar Bank Ltd [(2006)12 SCC 111], wherein a portion of the Decretal amount was ordered to be deposited and the party concerned was permitted to withdraw the said amount. 5. It is true, as submitted by the learned Sr. 5. It is true, as submitted by the learned Sr. Counsel for the petitioners, that the circumstances when the Apex Court directed the concerned party, who preferred the Appeal before the Apex Court, to deposit the amount was specifically on the basis of the 'admission' made by the learned Counsel for the appellants therein, as referred to in paragraph 6 of the said verdict. But what prompted the learned counsel for the appellants to seek to effect such deposit is very discernible from the 'previous paragraph', where the position has been explained, holding that the Court is very much empowered to impose such conditions either by way of cost, or entire decree or any portion of the same or even by providing sufficient security. In view of the dictum laid down by the 'Three Members Bench' of the Apex Court, as reflected in paragraph No.5 of the judgment reported in V.K. Industries vs. M.P. Electricity Board, Rampur [AIR 2002 SC 1151], this Court cannot take a different turn. This being the position, the order passed by the DRT directing the petitioners to satisfy the condition by depositing 10% of the claim amount, is well within the four wall of the law. 6. The reliance sought to be placed on the decision rendered by the 'Two Members Bench' of the Apex Court in Vijay Kumar Madan vs, R.N. Gupta Technical Education Society [(2002)5 SCC 30] is out of context, as it stands entirely on a different footing . It is true that the Court had chosen to impose only a 'Cost' of Rs. Fifty thousand and no direction was given to deposit any portion of the Decretal amount in the said case. This is obviously for the reason that the issue involved therein had not crystallised into a 'Decree' and the party had approached the concerned Court by filing a petition to set aside the "ex parte order" under Order IX Rule 7 of the C.P.C., which in turn has been considered by the Apex Court. It was in the said circumstances that the Court observed that appropriate Cost could be ordered, subject to the condition that it shall not be exorbitant in any manner (so as to avoid a situation of placing the defendant in a more worse condition). 7. It was in the said circumstances that the Court observed that appropriate Cost could be ordered, subject to the condition that it shall not be exorbitant in any manner (so as to avoid a situation of placing the defendant in a more worse condition). 7. The position considered by the Apex Court in V.K. Industries vs. M.P. Electricity Board, Rampur [AIR 2002 SC 1151] was in respect of a situation covered by Order IX Rule 13 i.e., setting aside an 'ex parte Decree' and not a situation of setting aside an 'ex parte order'. It was after considering the factual situation that the issue had crystallised into a Decree, the Apex Court observed that the Court was very much having power to impose 'Cost', the entire Decretal amount/some portion thereof or to ask the defendant to furnish security. This being the position, the reliance placed on Vijay Kumar Madan vs, R.N. Gupta Technical Education Society [(2002)5 SCC 30] is not of any significance. 8. Coming to the sustainability of Ext. P2 order passed by the Appellate Tribunal, where the liability cast upon the petitioner to deposit 10% of the claim amount was doubled, directing to deposit 20%. this Court finds absolutely no justification for such an exercise. The challenge raised by the petitioner before the Appellate Tribunal was only as to the sustainability of the condition to impose 10% of the claim amount. There was no case for the respondent Bank that the condition imposed by the Tribunal was quite inadequate; and there was no Appeal or Cross Appeal preferred by the respondent Bank in this regard. The observation made by the Appellate Tribunal with the direction to deposit 20% of the claim amount was quite unwarranted and not at all correct or sustainable, either on facts or in law. As such, the direction given by the Appellate Tribunal vide Ext. P2 is hereby set aside, while sustaining the direction given by the DRT vide Ext. P1. In the above circumstances, the prayers raised by the petitioners are granted to the limited extent, as aforesaid. But since the time stipulated by the DRT to effect the payment is already over, the petitioners are given one months' time to effect the deposit. P2 is hereby set aside, while sustaining the direction given by the DRT vide Ext. P1. In the above circumstances, the prayers raised by the petitioners are granted to the limited extent, as aforesaid. But since the time stipulated by the DRT to effect the payment is already over, the petitioners are given one months' time to effect the deposit. If the said amount is paid by the petitioners within one month as above, the same shall be treated as done within the time and the matter shall be considered and disposed of on merits. The Writ Petition is disposed of as above.