EUREKA FORBES LTD Vs. ALLAHABAD BANK
LAWS(DR)-2004-4-6
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on April 16,2004

Appellant
VERSUS
Respondents

JUDGEMENT

Ronojit Kumar Mitra, - (1.) THIS appeal was preferred on June 25, 2003, from a judgment dated June 15, 1995, made by the learned Presiding Officer, Debts Recovery Tribunal-I, Kolkata (hereinafter referred to as "the DRT"). A certificate has been issued by the DRT on June 30, 1995, in favour of the Bank. In the appeal, the appellant has made an application under Section 5 of the Limitation Act, for condonation of delay in filing the appeal. In terms of an order dated July 15, 2003, made by this Appellate Tribunal, the application and the appeal were heard analogously, and are disposed of by this order. The principal grievance of the appellant was that in spite of having a good and valid defence, strong on merits, the DRT had purported to make the impugned order against the principal debtor and ex parte holding the appellant jointly and severally liable, without giving the appellant an opportunity of hearing.
(2.) The following facts were not in dispute among the parties. The Bank had instituted a suit before the District Court at Alipore, being Title Suit No. 29 of 1988, and claimed a sum of Rs. 22,11,618.62 from the appellant and others. The appellant filed its written-statement on February 1,1989, and opposed the Bank's claim. The suit was thereafter transferred to the DRT by operation of law. Notices were duly issued by the DRT and received by the respondents on August 10, 1994. Further notices, fixing the date of hearing, were issued by the DRT and received by the appellant. The appellant nor any of the other respondents were represented before the DRT at the time of the hearing of the suit. Upon hearing Advocate for the Bank, by an order dated June 15, 1995, the DRT disposed of the claim petition in favour of the Bank. The Bank served, and the appellant received, the notice of demand on August 8, 1995, in terms of the Certificate which had been issued by the DRT. The appellant made a writ petition before the High Court at Calcutta on September 22, 1995, and challenged the vires of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, hereinafter referred to as "the Act". The prayers in the petition included an order to restrain the Bank from proceeding/dealing with the Certificate of Recovery and the Notice of Demand dated August 8, 1995, By an interim order, dated November 3, 1995, the High Court directed that "the execution case may proceed but no final order shall be passed without the leave of this Court." Execution proceedings were commenced by the Bank, and the Recovery Officer appointed a Receiver with direction to make inventory of the hypothecated goods, and issued a warrant of attachment. In an application by the appellant the High Court by an order dated January 31, 1997 stayed all further proceedings in execution. During the pendency of the applications mentioned hereinabove, in 1998 the appellant made a further application before the DRT, and prayed for setting aside of the impugned certificate recall the order, dated June 15, 1995 rehear the claim petition on merits and condone delay of three years in filing the petition. The appellant had alleged in the petition that the reason for delay in making the application, was because it was not advised by its Advocates to make the application. The application was heard by the DRT on affidavits and dismissed by an order dated August 19, 1998. The primary ground for dismissal was that no sufficient cause had been shown to explain the delay in filing the petition. The appellant preferred an appeal before the Debts Recovery Appellate Tribunal. The appeal was heard on affidavits and dismissed by an order dated June 1, 2001. The appellant then made a revision application before the High Court at Calcutta on October 12, 2001, under Article 227 of the Constitution of India and prayed for quashing and setting aside the order dated June 15, 1995, the certificate dated June 30, 1995 and the orders dated August 19, 1998 and June 1,2001. The application was heard on affidavits by an Hon'ble Judge of the Calcutta High Court and His Lordship was pleased to dismiss the revisional application by an order dated November 28, 2001. The appellant preferred a Special Leave Petition before the Supreme Court of India, and by an order dated April 26, 2002 the petition was dismissed as withdrawn. On July 30, 2002, the appellant made an application before the High Court for amendment of the pending writ petition, in which the appellant had challenged the constitutional validity of the Act. The amendment application was dismissed by an Hon'ble Judge on November 15, 2002, and the order was upheld by the Appellate Court on April 2, 2003, on the ground that the new materials sought to be incorporated by the appellant "will entirely change the nature and character of the writ petition and it would virtually substitute a new petition challenging the order passed by the Tribunal. All these things cannot be permitted to be incorporated by amendment in this writ petition as it will virtually amount to material alteration of the main writ petition". The order stay of the execution proceedings dated January 31, 1997, was vacated by an Hon'ble Judge of the High Court on April 7, 2003. By June 27, 2003, all pending applications which had been made by the appellant including the application before the Recovery Officer for stay of the recovery proceedings, stood dismissed and/or rejected in those circumstances, the appellant has preferred this appeal. It was argued by Counsel for the appellant at great length, that the merits of the suit were not the subject matter of adjudication in any of the earlier applications, and that this appeal has been preferred against the judgment dated June 15, 1995, on the basis of the merits of the appellant's case. What had been adjudicated in the above mentioned applications, according to him, was the merit of the miscellaneous proceedings for setting aside of the ex parte decree. He contended, that the appellant was neither a constituent of the Bank nor a guarantor to the principal debtor and the DRT had exceeded his powers conferred on him by Section 17, which were restricted to the adjudication of applications under Section 19 of the Act. He argued, that there being no legal nexus between the appellant and the Bank the DRT had no jurisdiction to try or entertain the application as against the appellant and as a result the DRT was coram "non-judice" and the decree "non-est". In support of his submissions, he cited and relied on the decisions reported in AIR 1954 SC 340; 1990(1) SCC 193; 1993(2) SCC 507, and A(1996) SC 1819. The circumstances clearly indicated he contended, that there was sufficient cause for condoning the delay in filing this appeal and that a liberal construction ought to be given to the phrase "sufficient cause" so that substantial justice would be advanced as no negligence, inaction, want of bona fide could be imputed to the appellant. In support of his submissions, he cited and relied on the decisions reported in AIR 1954 SC 411; 1972(1) SCC 366; A(1987) SC 1353, and a judgment unreported dated December 9, 2003, made by this Appellate Tribunal.
(3.) THE subject-matter of this appeal including the grounds explaining the enormous delay, it was submitted by Advocate for the Bank, had already been decided against the appellant, more than once by the Appellate Tribunal, the High Court and the Supreme Court of India. According to him, the appellant intending to avoid payment of the Bank's lawful dues made several applications which were all dismissed and rejected by the Law Courts. He contended, that the allegations in the Memorandum of Appeal were mere repetitions of allegations which stood adjudicated and the appellant has not been able to apprise this Appellate Tribunal of any new developments since, or any matter which had not been considered in the orders made in the earlier proceedings in the matter. He submitted, that the appeal was frivolous and should be dismissed in limine.;


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