1. This appeal has been preferred against the order dated 17th May, 2004 passed by the DRT, Allahabad in M. A. No. 130/03, whereby and whereunder the petition filed by the appellants/defendants under Section 22(2)(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter shall be referred to as the RDDBFI Act) for restoration of Original Application No. 72/02 by setting aside the ex pane judgment has been dismissed.
2. The appellants were defendant Nos. 3 to 6 in the Original Application No. 72/2000, wherein the respondent Bank of Baroda had claimed recovery of a sum of Rs. 1,56,14,402,65. Notices were sent on all the defendants including the firm Nirmal Organics (P) Ltd. and its Chairman Mr. R.K. Pandey as respondent/defendant No. 2 and also against Mr. Kakendu Das as defendant No. 7 and U.P. Financial Corporation as defendant No. 8. Notices were first sent under registered post. When the notices did not return sent under registered post, then publication was made in local daily Aaj having wide circulation at Allahabad and then the defendant Nos. 1, 2 and 7 appeared and practically the claim was contested by defendantNo. 2for himself and on behalf of defendant No. 1 the main borrower and ultimately the original application was decreed vide order dated 4th June, 2003 in toto against all defendants including the appellants. It should be mentioned here that the appellants did not appear, the original application proceeded ex parte against them. Soon after decree was passed, the appellants came up with a petition under Section 22(2)(g) of the Act for setting aside ex pane judgment and order for recovery on the ground that no notices/summons were ever served on them. Their case was that defendant No. 3 i.e.
appellant No. 1 ordinarily resides at Hyderabad and other appellants, who are his near and dear ones were residing with him at Hyderabad at the relevant time, when the notices/summons, publication were made. It was stated that as appellant No. 1 was suffering from ailment, the other appellants had gone to see him at Hyderabad and in this respect individual affidavits have been filed by each of the appellants regarding their residence for the time being at Hyderabad. It is their further contention that soon after the decree was passed, the appellant No. 1 made a query in the Bank asking for his balance sheet of the accounts. Then and then only he came to know that ex parte judgment has been passed. No name, nothing of this sort has been given as to who had given him information regarding ex parte judgment. All these contentions made by the parties in the restoration petition under Section 22(2)(g) of the Act have been denied by the respondent Bank by filing written objection. It was their contention that the appellants being the family members and near and dear ones of defendant No. 2 R.K.Pandey, who appeared on notices being issued and publication being made, there cannot be any earthly reason to presume or hold that the appellants had no information about the proceedings of the Original Application No. 72 of 2002. It was also the contention of the Bank that the Bank authorities had never been informed by the appellants about leaving their ordinary residence and going to Hyderabad as such notice/summons by registered post were sent in their proper address as was available with the Bank and this plea of residing at Hyderabad is nothing, but a concocted story for filing of restoration petition. On rival contentions of both the parties, the learned Tribunal held that the appellants had the knowledge about the proceedings in the original application and with an ulterior motive they remained absent in the case only to file restoration petition so that the matter can be delayed.
3. Mr. R.P. Agarwal appearing for and on behalf of the appellants has strenuously argued attacking the impugned order that the decision arrived at by the Tribunal was only on presumption and surmises and not based on facts. He was arguing on the technicalities regarding sending of summons and publication etc. and in support of his contention, he had filed several judgments of the Allahabad High Court, which may be enumerated below:Commissioner of Sales Tax v. Durga Prasad and Ram Nath Jewellers 2004 U.P.T.C. 49.Om Prakash v. Prakash Chand and Ors.
(c) Ramakant Upamanyu v. State Bank of India II (2003) BC 122 (DRAT) : 2003(3) Bank C.L.R. 295 (DRAT, All).
(d) Smt. Motia Rani v. Punjab National Bank I (2004) BC 170 (DRAT) : 2004 (1) Bank C.L.R. 352 (DRAT, All).
(e) Industrial Area Naini v. State Bank of India W.P. No. 19263 of 2003.
4. All those rulings are regarding the irregularity in the service of summons/ notices and such irregularity was held to be sustainable for the purpose of setting aside of exparte decree on the basis of restoration petition. From the records of the original application, it could be found that on original application being filed on 23rd March, 2002, the Registrar had asked for issuance of notice to the defendants.
On the next date fixed i.e. 20th May, 2002, an order was passed for publication of notices as the defendants did not appear and on a subsequent date when defendant Nos. 7, 1 and 2 appeared, defendant No.2 filed reply for himself and on behalf of the company i.e. defendant No. 1, then the case proceeded before the Presiding Officer.
5. Learned Presiding Officer after hearing the argument of the parties passed the final judgment. Regarding service of notice on the appellants it appears that satisfaction has been recorded by the Registrar and not by the Presiding Officer. It has been argued that Tribunal under the Act, is the only authority to record the satisfaction and the Registrar has got no role in it. His further submission is that rules framed regarding functions of the Registrar and the regulation made there by the Presiding Officer, D.R.T. cannot override the provision of the Act and as such order passed by the Registrar regarding the issuance of summons, receiving of summons back etc., cannot be passed by the Registrar. I do not find force in such submission. Here there is no scope of challenging the validity of the rules framed by the Central Government and I do not find that the provisions of rules have any overriding effect on the provisions of the Act. Section 7 of the Act provides for appointment of Recovery Officer and other officers of the Tribunal and the Central Government has been given power to make rules to that effect regarding functions of the staff, etc. and under the rules the Registrar has got the power regarding sending of summons, receiving of reply and service of summons etc. In that way, satisfaction of service can be recorded by the Registrar, which should be construed as the act of the Tribunal itself.
Another objection has been raised that after sending of the registered notices, there was no mention as to the fate of those registered notices but straightaway order was passed for publication i.e.
substituted manner of service as contemplated under Order 5, Rule 20 of the CPC, which requires conditions to be satisfied for substituted service of summons etc. In the present case, I do not find that those technicalities are to be considered for the purpose of this restoration petition. It should be kept in mind that principle of natural justice is of paramount importance regarding implementation of provisions of the Act. Here the registered notices were sent and postal receipts have been filed and when those had not been returned and 30 days had elapsed, then publication order was made although in clear words those had not been mentioned but in subsequent orders those were mentioned by the Registrar.
6. Even if it is taken that there was some technical irregularity in the procedure adopted in the Tribunal, but such technicality/irregularity would not come in the way, if it is found from the circumstances of the case that the appellants had knowledge about the original proceedings. The appellants are admittedly the close relations of defendant No. 2 who contested the Original Application.
Can it be believed by any stretch of imagination that when all family members are involved in the loan taking, then they would not be informed about the pendency of the proceedings by the family member, who contested. Definitely the prudent answer is in the negative.
7. This story of residing at Hyderabad is only for the purpose of creating grounds for filing of the restoration petition. This stay at Hyderabad is of temporary nature but the ordinary residence remained at Allahabad itself except that of appellant No. 1 against whom registered notice was sent. If notice sent by registered post in proper and correct address and even if the acknowledgement has not been received back after a lapse of 30 days, then the presumption remains legally of notices being served and in the present case, after such notices being sent and after publication being made, defendant No. 2, defendant No. 1 and defendant No. 7 had put in appearance and defendant No. 2 had contested the original application. So in the same address when notices have been sent, one has appeared and other remained absent, then the presumption is of wilful absence when the ordinary residence remains in the same address. In this connection, a judgment of the Supreme Court may be referred to as reported in Basant Singh v. Roman Catholic Mission 2003 (1) A.I.C. 1 (SC). When such presumption remains in favour of the respondent Bank, then the whole burden remains with the appellants regarding non-service of summons on them. Affidavits filed by the appellants cannot rebut the strong presumption in the present circumstances of the case.
8. Then comes the vital position of law, which goes against the appellants. The provisions of Order 9, Rule 13 of the C.P.C. are applicable for a decision under Section 22(2)(g) of the Act, wherein a proviso has been inserted by amendment wherein it has been enumerated that no exparte decree can be set aside on the ground of irregularity in the service of summons, if it is satisfied that the defendant had knowledge of the proceedings. In the present case, it has already been held that the appellants had definite knowledge about the proceedings in the original application being the near and dear ones of contesting defendant No. 2 and in that circumstances on the ground of technical flaw, the appellants cannot get any redressal of their wilful negligence. I find that the learned Tribunal has rightly rejected the restoration petition.
9. In the result, the appeal is dismissed, but in the circumstances, no order as to cost, Stay order if any passed earlier is hereby vacated.