KIRAN OVERSEAS EXPORTS LTD Vs. INDIAN BANK
LAWS(DR)-2003-1-6
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on January 02,2003

Appellant
VERSUS
Respondents

JUDGEMENT

A.Subbulakshmy, - (1.)THE appellants defendants were set ex parte before the Tribunal on 19.1.1999 and the ex parte decree was passed on 21.11.2000 and final order was passed on that day. To set aside the ex parte decree the defendants filed IA-34/2001 before the Tribunal and the Tribunal passed conditional order on 6.11.2002 directing the defendants to deposit Rs. 1.15 crores. Aggrieved against that order the appellants have preferred this appeal.
(2.)Counsel for the appellants submits that no notice was served on the defendants and reference was pending before the BIFR and while the matter was pending before the BIFR the Presiding Officer, DRT-I, passed the ex parte decree and the conditional order imposed is also not sustainable. Counsel for the respondent Bank submits that there was proper service of summons and Counsel also appeared for the 1st appellant by filing Vakalat and afterwards the 1st appellant was also set ex parte and all the defendants were set ex parte and so it cannot be stated that there was no proper service of summons and all the defendants were duly served and the 1st defendant appellant was also represented by the Counsel and there was proper service of summons. He further submitted that the defendants were set ex parte on 19.1.1999 and the defendants made reference to the BIFR only on 26.2.1999 after they were set ex parte and the ex parte order passed was prior to the reference made to the BIFR and so the ex parte order passed is not during the pendency of the BIFR and the conditional order passed by the Presiding Officer, DRT-I, to set aside the ex parte order dated 19.1.1999 is perfectly justified. Counsel for the appellants submitted that when final order and decree was passed on 21.11.2000, the ex parte order passed on 19.1.1999 merged with that order which order has also been set aside by the same Presiding Officer, DRT-I, since the Presiding Officer has declared it as a nullity because of the pendency before the BIFR and the Presiding Officer, DRT-I, has to also cancelled the DRC.
On a perusal of the order, it is seen that the Presiding Officer, DRT-I, has passed order that there is irregularity in passing order by the Court keeping in view the provisions under Section 22 of the Sick Industrial Company (Special Provisions) Act, and the order dated 21.11.2000 decreeing the OA was passed during the pendency of the proceedings before the BIFR and the order is a nullity by virtue of the said provisions and it is recalled and the DRC is also cancelled. It is evident from the order that the Presiding Officer himself has recalled his order and has also cancelled the DRT, So, as it is, there is no final order passed by the Tribunal. What remains is that the defendants were set ex parte on 19.1.1999. To set aside the ex parte order only the relief can now be sought for by the appellants. To set aside that ex parte order dated 19.1.1999 the Presiding Officer, DRT-I, has passed conditional order stating that the defendants shall deposit Rs. 1.15 crores which is about 15% of the OA claim, to the applicant Bank towards their loan liability, which shall be without prejudice to the rights/contentions of either party and on furnishing proof of payment to the Bank they shall be further entitled to file their reply statement and the petitioner defendants are granted 4 weeks' time to comply with the conditional order failing which their defence shall stand struck off. The Presiding Officer, DRT-I, has passed conditional order for deposit of Rs. 1.15 crores.

(3.)COUNSEL for the appellant submits that to set aside the ex parte order the imposition of conditional order for payment of Rs. 1.15 crores is very high and that conditional order is liable to be set aside. As it is, the OA is pending before the DRT. The appellants were set ex parte on 19.1.1999. It is seen from the records that the 1st appellant appeared through COUNSEL and the COUNSEL also filed vakalat and subsequently the COUNSEL for the 1st appellant and the 1st appellant also never appeared and he was set ex parte. The other defendants were also duly served and they were also set ex parte. Since the decree was passed during the pendency of the proceedings before the BIFR, the Presiding Officer, DRT-I, himself has declared that the decree is a nullity.


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