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2019 DIGILAW 152 (AP)

Kolla Sambaiah v. State Bank of India

2019-07-25

J.UMA DEVI, M.SEETHARAMA MURTI

body2019
ORDER : M. Seetharama Murti, J. 1. This writ petition is filed, under Article 226 of the Constitution of India, by the petitioner assailing the order, dated 13.3.2018, of the Debt Recovery Tribunal, Visakhapatnam, passed in I.A. No. 1673 of 2017 in O.A. No. 427 of 2015. 2. We have heard the submissions of the learned counsel for the petitioner and of learned Standing Counsel for the bank appearing for the 1st respondent. We have perused the material record including the impugned order. 3. The parties in this writ petition shall herein after be referred to as arraigned in this writ petition. 4. To begin with, it is to be noted that the bank instituted the OA before the Tribunal for recovery of the debt due to it from the petitioner herein and the guarantor. The said OA is being resisted by the petitioner by filing a written statement. It appears that both parties filed the affidavits of the witnesses in proof of the respective cases, as required under the Debt Recovery Tribunal Rules. Later, the petitioner filed the subject application before the Tribunal seeking permission to cross-examine the deponent/s of the affidavit/s filed on behalf of the bank in proof of its claim in the OA. The 1st respondent bank resisted the said application by filing a counter. On merits and by the order impugned in this writ petition, the said petition was dismissed by the Tribunal. Therefore, the petitioner is before this Court. 5. The respective cases of the parties and the facts, which are relevant for consideration, shorn of unnecessary details, may be stated as follows: 5.1. "According to the case of the petitioner, he is an agriculturist; he has stored his agricultural produce in the warehouse of the 2nd respondent; he had approached the bank for agricultural loan against the security of 'Warehouse Receipts' and executed necessary documents; he waited for sanction of the loan; however, the bank has not disbursed the loan amount to him; he did not thereafter pursue the matter." 5.2. Per contra, the case of the 1st respondent/bank is that after the loan documents are duly executed, the loan amount was disbursed and that the above said fact is evident from the statement of the account filed before the Tribunal. 5.3. Per contra, the case of the 1st respondent/bank is that after the loan documents are duly executed, the loan amount was disbursed and that the above said fact is evident from the statement of the account filed before the Tribunal. 5.3. Whereas, one of the specific defences of the petitioner in his written statement filed before the Tribunal is as under:- "This defendant never received any amount from the applicant bank towards loan referred to in the OA." 5.4. The petitioner's further case is as follows: 'The Bank did not file any form of withdrawal or cheque and/or any voucher to prove withdrawal or disbursement of the loan amount allegedly sanctioned. Mere filing of the account copy by the Bank in the absence of any other evidence showing disbursement of the loan amount to the petitioner is of no avail. The facts and circumstances of the case reveal the fact that this petitioner has not withdrawn the loan amount from the bank on the alleged dates. In the alleged statement of account, there was no entry evidencing withdrawal of the amount by the petitioner that too by means of cheques or vouchers or withdrawal forms. Mere oral assertion or entries in the bank account are not sufficient proof of disbursement of the loan amount to the petitioner, in view of the guidelines of the Reserve Bank of India, which lay down that any loan amount exceeding Rs.20,000/-, has to be transferred to the loanee's savings account." 6. In this backdrop, learned counsel for the petitioner submitted as follows: "In view of the contention of the petitioner in the written statement filed in the OA that the loan amount was not disbursed and that he did not receive any amount from the applicant bank towards loan, which is the subject matter of the OA, and in the light of the further contention of the petitioner that the bank has not produced any piece of paper in support of its contention that the loan amount is either disbursed to the petitioner or withdrawn by the petitioner herein, there cannot be any negative proof and that the initial onus of proof as well as the legal burden of proof are on the bank, which is the applicant in the OA. Therefore, it is for the bank to establish its case. Therefore, it is for the bank to establish its case. Nevertheless, for establishing the defence and the averments related to fraud, which the petitioner has pleaded in the written statement filed in the OA, it is highly necessary to cross-examine the deponent/s of the affidavit/s filed on behalf of the bank in the OA, because to substantiate the defence of the petitioner that the loan amount was not disbursed and that he did not receive any amount from the applicant bank towards loan, there cannot be any negative proof. Hence, it is indispensable to cross-examine the deponent/s of the affidavit/s filed on behalf of the bank in the OA. Unless permission is accorded to cross-examine the deponent/s of the affidavits filed on behalf of the bank, the petitioner cannot establish his defence in the OA. The interests of justice entail the petitioner to cross-examine the deponent of the affidavit filed on behalf of the bank. Cross-examination is one part of the principles of natural justice, as laid down in the decision of the Supreme Court in Ayaaubkhan Noorkhan Pathan v. The State of Maharashtra and others (1) AIR 2013 SC page 58 : 2013 (2) ALT 46.1 (DN SC).. Hence, the impugned order, which is passed without appreciating the facts correctly and legal position in proper perspective, may be set aside and the Tribunal may be directed to afford an opportunity to the petitioner to cross examine the deponent/s of the affidavit/s filed on behalf of the bank, in the OA on the file of the Tribunal." 7. Per contra, learned counsel for the 1st respondent bank having first drawn the attention of this Court to Section 22 of the Recovery of the Debts Due to the Bank And Bankruptcy Act, 1993, and Section 4 of the Bankers Books Evidence Act, 1891, contended as follows:-" As per Section 22 of the Act of 1993, the Tribunal is not bound by the procedure laid down in the Code of Civil Procedure, 1908, and that the Tribunal can regulate its own procedure and that even the provisions of the Indian Evidence Act, 1872, have no application. In view of Section 4 of 1891 Act, a certified copy of any entry in a banker's books shall, in all legal proceedings, be received as prima facie evidence of the existence of such entry and shall be admitted in evidence. In view of Section 4 of 1891 Act, a certified copy of any entry in a banker's books shall, in all legal proceedings, be received as prima facie evidence of the existence of such entry and shall be admitted in evidence. The execution of the loan documents is admitted. The account copy already filed discloses that the loan amount is disbursed. Unless the special circumstances are alleged and established, the petitioner is not entitled to seek permission to cross-examine the witnesses of the bank. Hence, the order impugned, which is a well reasoned and considered order, needs no interference." He thus supported the order impugned in this writ petition. 8. We have given earnest consideration to the facts and submissions. 9. As already noted, though the petitioner admits execution of loan documents, in his defence he had specifically contended that he did not receive any amount form the bank towards loan referred to in the OA pending on the file of the Tribunal and that the bank has also not produced any piece of paper except the statement of account to show that the loan amount is disbursed to the petitioner or that the loan amount was withdrawn by the petitioner. 10. It is pertinent to note that during the course of hearing, it is submitted and it is also not controverted that during the relevant period thousands of loans of similar nature, were sanctioned to the agriculturists by the bank and that amongst them, all others, except about less than 200 agriculturists, had discharged their loans. The bank on one hand contends that the others, including the present petitioner, who had not discharged the loans advanced to them, ganged up to delay the payment of the just debts due to the bank and to defeat the just claims of the bank and that the said defaulters are indulging in big fraud. On the other hand, the petitioner contends that the agriculturists like the petitioner were deceived by the bank without disbursing the loan amounts and that the bank officers played fraud and cheated innocent agriculturists. Learned Counsel for the petitioner also submitted that criminal cases are registered by the police concerned. 11. On the other hand, the petitioner contends that the agriculturists like the petitioner were deceived by the bank without disbursing the loan amounts and that the bank officers played fraud and cheated innocent agriculturists. Learned Counsel for the petitioner also submitted that criminal cases are registered by the police concerned. 11. In this milieu of serious allegations including allegations of fraud being traded by the parties, we are of the considered view that the issue, which is to be resolved by the Tribunal in the OA, is a complex issue of fact. Therefore, having regard to the nature of the lis and the allegations, we find that it is necessary to record the oral evidence and the contents of the affidavit/s of the witnesses of the bank are required to be tested by cross-examination. Though the Tribunal has a right to regulate its own procedure, the procedure, which it is required to follow, shall be in harmony with the principles of natural justice. Though the Tribunal has given certain amount of latitude in the matter of procedure, it surely cannot fly away from the procedure established under the legal principles particularly the principles of natural justice. In that view of the matter, we hold that the order of the Tribunal brooks interference. 12. Before parting, it is to be noted that learned counsel for the bank contended that if the bank officers are to be cross-examined, several bank officers, who have now been transferred from the particular branch and who are working at different distant places have to be personally present before the Tribunal to face cross-examination/s and therefore, it would be difficult for the bank to produce the said witnesses for facing cross-examination and recording of their oral evidence by the Tribunal. Therefore, learned counsel for the 1st respondent bank also contended that if this Court is inclined to grant the relief to the petitioner, the bank may be permitted to produce the present Manager of the bank, who is locally available, for cross-examination. This aspect needs no dilation for the reason that the cross-examination will be of the officers of the bank whose affidavit/s is/are filed or may be filed on behalf of the bank in the OA before the Tribunal. 13. In the result and for the afore-stated reasons, the writ petition is allowed and the impugned order is set aside. This aspect needs no dilation for the reason that the cross-examination will be of the officers of the bank whose affidavit/s is/are filed or may be filed on behalf of the bank in the OA before the Tribunal. 13. In the result and for the afore-stated reasons, the writ petition is allowed and the impugned order is set aside. As a sequel, IA No. 1673 of 2017 in OA No. 427 of 2015 is allowed permitting the petitioner to cross-examine the deponent/s of the affidavit/s filed or may be filed in due course to establish the case of the bank in the OA. No. 427 of 2015 on the file of the Tribunal. No order as to costs. Miscellaneous Petitions, if any pending in this writ petition, shall also stand closed.