Shri Shankar Straw Products Pvt. Ltd. and ors. Vs. Chairperson, Debts Recovery Appellate Tribunal and ors. - Court Judgment

SooperKanoon Citationsooperkanoon.com/482089
SubjectBanking
CourtAllahabad High Court
Decided OnMay-22-2009
JudgeArun Tandon, J.
Reported in2009(3)AWC2902
AppellantShri Shankar Straw Products Pvt. Ltd. and ors.
RespondentChairperson, Debts Recovery Appellate Tribunal and ors.
DispositionPetition dismissed
Cases ReferredPrestige Lights Ltd. v. State Bank of India
Excerpt:
- - the appellate tribunal has found as a matter of fact that the defendants were aware of the proceedings and for the reasons best known to them they failed to appear.arun tandon, j.1. petitioners before this court had admittedly taken loan from the respondent bank. it is further apparent from the records that they had committed default in repayment of the same. this resulted in original suit being filed by the bank against the loanee as early as in the year 1996. the total amount subject-matter of the suit was rs. 86,06,818.2. the writ petitioners participated in the civil suit proceedings. it took seven adjournment on their behalf before written statement could be filed on 28.10.1997. the case was again adjourned successively for framing issues.3. it appears that the suit was transferred with the establishment of debt recovery tribunal at jabalpur and then to the debt recovery tribunal at allahabad. one of the defendant in the suit namely shamti devi expired a substitution application was made and respondent nos. 8 to 10 were added as proforma respondent. when the matter was pending before the debt recovery tribunal allahabad, an order was passed for fresh notice being issued to respondents. on 13th july, 2001 it was reported that the process has been received back unserved. the debt recovery tribunal therefore directed for fresh steps being taken through publication in newspaper. accordingly, a publication was made in the newspaper qua the pendency of the aforesaid proceedings. even thereafter the defendants did not appear before the debt recovery tribunal, allahabad and therefore on 27.11.2001 an order was passed for matter being ex parte proceeded against the defendant. on 7th february, 2002 the debt recovery tribunal was constituted at lucknow and the matter was directed to be transferred to the lucknow tribunal with the direction upon the parties to appear there on 11.3.2002. the defendant had not put in appearance before the debt recovery tribunal at allahabad up to that date.4. the notification, transferring the cases from debt recovery tribunal, allahabad to debt recovery tribunal, lucknow was subject-matter of challenge before this court in a writ petition, wherein transfer of the case was stayed. the matter was therefore proceeded at allahabad and after adjournment on various dates ex parte arguments were heard on 29.4.2002 and judgment was announced.5. an application for recall of the ex parte order was filed on 2.4.2003 by the petitioner, which was dismissed under the order dated 30.10.2006. against the said order the petitioner filed an appeal before the debt recovery appellate tribunal, allahabad, being appeal no. r 773 of 2007. the debt recovery appellate tribunal under the impugned order has rejected the appeal filed by the petitioner having regard to the law laid down by the hon'ble supreme court in the case of prestige lights ltd. v. state bank of india : (2007) 8 scc 449 : 2007 (4) awc 3761 (sc). it has recorded reasons for holding that the petitioners before this court and who were defendants in the proceedings before the tribunal had full knowledge of the said proceedings and they have deliberately not appeared. it has specifically been stated that the non-participation of the writ petitioners, and ex parte order being made in the facts of the case was only because of the deliberate intention of the petitioners not to contest the proceedings/delay the same. the debt recovery appellate tribunal has therefore held that in the facts of the case no interference was required.6. the order is challenged before this court on the ground that the matter was directed to be transferred to lucknow tribunal and thereafter re-heard at debt recovery tribunal, allahabad itself without notice, to do so, being issued to the petitioners. therefore, the ex parte order was liable to be recalled. a copy of the application made by the petitioners for recall of the ex parte order of the debt recovery tribunal has been brought on record as annexure-6 to the writ petition.7. what is surprising to note is that absolutely no application was made before the debt recovery tribunal for recall of the order dated 27th november, 2001, wherein debt recovery tribunal, allahabad directed that the matter may proceed ex parte against the petitioners. the said order continues to exist on record and has not been subjected to challenge. consequently, the debt recovery tribunal has rightly proceeded to decide the matter ex parte on 24.4.2003.8. at the pain of repetition it is stated that despite successive attempt of debt recovery tribunal, allahabad to effect the service, after receipt of the proceedings from debt recovery tribunal, jabalpur, service could not be effected upon the petitioners and therefore substituted service was directed by way of publication in the newspaper and even thereafter the petitioners did not respond. it is only thereafter that ex parte order was made. petitioners have chosen to challenge the ex parte award dated 24.4.2003 without challenging the order dated 27th november, 2001 which directed for ex parte proceedings against the petitioner. no explanation has been furnished as to why even after publication in newspaper they did not appear before the tribunal. the only allegation made in the writ petition is that the petitioners were not made aware about the hearing which took place before the debt recovery tribunal subsequent to the order transferring the case to the lucknow tribunal and it is claimed that the tribunal at allahabad should have issued fresh notice before re-starting the hearing in view of the stay of the notification transferring the cases to lucknow. in support of such plea no rule or provision could be referred to by the petitioners. presumption of knowledge of the proceedings after publication could not be successfully assailed by the petitioners.9. i am of the considered opinion that the tribunal has rightly rejected the recall application made by the petitioners against the ex parte award. the appellate tribunal has found as a matter of fact that the defendants were aware of the proceedings and for the reasons best known to them they failed to appear. the tribunal has rightly followed the law laid down by the hon'ble supreme court in the case of prestige lights ltd. (supra). the order passed by the tribunals does not warrant any interference under article 226 of the constitution of india.writ petition is dismissed.
Judgment:

Arun Tandon, J.

1. Petitioners before this Court had admittedly taken loan from the respondent bank. It is further apparent from the records that they had committed default in repayment of the same. This resulted in original suit being filed by the bank against the loanee as early as in the year 1996. The total amount subject-matter of the suit was Rs. 86,06,818.

2. The writ petitioners participated in the civil suit proceedings. It took seven adjournment on their behalf before written statement could be filed on 28.10.1997. The case was again adjourned successively for framing issues.

3. It appears that the suit was transferred with the establishment of Debt Recovery Tribunal at Jabalpur and then to the Debt Recovery Tribunal at Allahabad. One of the defendant in the suit namely Shamti Devi expired A substitution application was made and respondent Nos. 8 to 10 were added as proforma respondent. When the matter was pending before the Debt Recovery Tribunal Allahabad, an order was passed for fresh notice being issued to respondents. On 13th July, 2001 it was reported that the process has been received back unserved. The Debt Recovery Tribunal therefore directed for fresh steps being taken through publication in newspaper. Accordingly, a publication was made in the newspaper qua the pendency of the aforesaid proceedings. Even thereafter the defendants did not appear before the Debt Recovery Tribunal, Allahabad and therefore on 27.11.2001 an order was passed for matter being ex parte proceeded against the defendant. On 7th February, 2002 the Debt Recovery Tribunal was constituted at Lucknow and the matter was directed to be transferred to the Lucknow Tribunal with the direction upon the parties to appear there on 11.3.2002. The defendant had not put in appearance before the Debt Recovery Tribunal at Allahabad up to that date.

4. The notification, transferring the cases from Debt Recovery Tribunal, Allahabad to Debt Recovery Tribunal, Lucknow was subject-matter of challenge before this Court in a writ petition, wherein transfer of the case was stayed. The matter was therefore proceeded at Allahabad and after adjournment on various dates ex parte arguments were heard on 29.4.2002 and judgment was announced.

5. An application for recall of the ex parte order was filed on 2.4.2003 by the petitioner, which was dismissed under the order dated 30.10.2006. Against the said order the petitioner filed an appeal before the Debt Recovery Appellate Tribunal, Allahabad, being Appeal No. R 773 of 2007. The Debt Recovery Appellate Tribunal under the impugned order has rejected the appeal filed by the petitioner having regard to the law laid down by the Hon'ble Supreme Court in the case of Prestige Lights Ltd. v. State Bank of India : (2007) 8 SCC 449 : 2007 (4) AWC 3761 (SC). It has recorded reasons for holding that the petitioners before this Court and who were defendants in the proceedings before the Tribunal had full knowledge of the said proceedings and they have deliberately not appeared. It has specifically been stated that the non-participation of the writ petitioners, and ex parte order being made in the facts of the case was only because of the deliberate intention of the petitioners not to contest the proceedings/delay the same. The Debt Recovery Appellate Tribunal has therefore held that in the facts of the case no interference was required.

6. The order is challenged before this Court on the ground that the matter was directed to be transferred to Lucknow Tribunal and thereafter re-heard at Debt Recovery Tribunal, Allahabad itself without notice, to do so, being issued to the petitioners. Therefore, the ex parte order was liable to be recalled. A copy of the application made by the petitioners for recall of the ex parte order of the Debt Recovery Tribunal has been brought on record as Annexure-6 to the writ petition.

7. What is surprising to note is that absolutely no application was made before the Debt Recovery Tribunal for recall of the order dated 27th November, 2001, wherein Debt Recovery Tribunal, Allahabad directed that the matter may proceed ex parte against the petitioners. The said order continues to exist on record and has not been subjected to challenge. Consequently, the Debt Recovery Tribunal has rightly proceeded to decide the matter ex parte on 24.4.2003.

8. At the pain of repetition it is stated that despite successive attempt of Debt Recovery Tribunal, Allahabad to effect the service, after receipt of the proceedings from Debt Recovery Tribunal, Jabalpur, service could not be effected upon the petitioners and therefore substituted service was directed by way of publication in the newspaper and even thereafter the petitioners did not respond. It is only thereafter that ex parte order was made. Petitioners have chosen to challenge the ex parte award dated 24.4.2003 without challenging the order dated 27th November, 2001 which directed for ex parte proceedings against the petitioner. No explanation has been furnished as to why even after publication in newspaper they did not appear before the Tribunal. The only allegation made in the writ petition is that the petitioners were not made aware about the hearing which took place before the Debt Recovery Tribunal subsequent to the order transferring the case to the Lucknow Tribunal and it is claimed that the Tribunal at Allahabad should have issued fresh notice before re-starting the hearing in view of the stay of the notification transferring the cases to Lucknow. In support of such plea no rule or provision could be referred to by the petitioners. Presumption of knowledge of the proceedings after publication could not be successfully assailed by the petitioners.

9. I am of the considered opinion that the Tribunal has rightly rejected the recall application made by the petitioners against the ex parte award. The Appellate Tribunal has found as a matter of fact that the defendants were aware of the proceedings and for the reasons best known to them they failed to appear. The Tribunal has rightly followed the law laid down by the Hon'ble Supreme Court in the case of Prestige Lights Ltd. (supra). The order passed by the Tribunals does not warrant any interference under Article 226 of the Constitution of India.

Writ petition is dismissed.