ARUN KHOSLA Vs. CENTRAL BANK OF INDIA AND ORS.
LAWS(DR)-2014-6-2
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on June 27,2014

Arun Khosla Appellant
VERSUS
Central Bank of India And Ors. Respondents

JUDGEMENT

Ranjit Singh, J. (Chairperson) - (1.) THROUGH its order dated 16th August, 2013, the Tribunal below has disposed off 10 interim applications (I.As.). The appellant is aggrieved against the order passed in I.A. No. 1067/2012 and has accordingly filed this appeal only to challenge that part of the order. I.A. No. 1067/2012 was filed by the respondent No. 4 for recall/review of the order dated 22nd August, 2012 whereby substitution application (I.A. No. 10/2011) filed by the Bank more than 5 years after the death of defendant Nos. 2 and 6 had been allowed. The main ground of attack by the said respondent to seek review/recall of the order dated 22nd August, 2012 passed by the Tribunal below was that there was a delay of 2000 days which had not been explained by the respondent Bank and, therefore, the suit would stand abated. As per the appellant, the application seeking condonation of delay was pending when the application for review was filed and had not been decided by the Tribunal below while allowing substitution application. He would contend that the liability of defendant Nos. 3 to 5 being guarantors/mortgagors was joint and several, the whole suit would abate in view of the law laid down in the case of Maqbul Ahmad v. Onkar Pratap Narain Singh, : AIR 1935 PC 85, which, according to the appellant is valid till date and holds the field. Reference is also made to the judgment passed by the Hon'ble Supreme Court in the case of Sri Chand v. Jagdish Pershad Kishan Chand, : AIR 1966 SC 1427 in support of the proposition canvassed by the appellant. This issue arises in the facts which may now be noticed in brief. Respondent, Central Bank of India, had entered into an agreement with Bharat Finance Corporation (P) Ltd. for advance for money. As per the appellant, this money was exclusively for the business of supplying trucks and buses and/or other vehicles on hire purchase system. Over the years, the said contract was innovated with enhanced limits of lending. The appellant as well as respondent Nos. 3 and 4 claim to have been discharged of their liability as guarantors in their earlier capacity as per law. The appellant would allege that respondent Bank conspired with deceased Durga Das, who was Director of respondent No. 2 Company, in order to contravene the specific terms of agreement dated 16th January, 1996 by diversion of loan to one Union Motors of which Durga Das was Managing Partner.
(2.) IT is then alleged that respondent No. 2 Company defaulted in its obligation qua the respondent Bank, when respondent Bank instituted O.A. No. 9.7/2004 against respondent No. 2 Company and its five Directors in their capacity as guarantors to the facilities advanced. The alleged guarantors, namely, Durga Das and Shankar Banerjee had died on 28th December, 2005 and 27th July, 2006 respectively. Still, the Bank did not take any step to substitute their legal heirs. The appellant as well as respondent Nos. 3 and 4 filed their written statements and affidavits by way of evidence, raising a preliminary objection with regard to the maintainability of the said O.A. qua them. The respondent Bank then filed the I.A. No. 10/2011 under Order XXII, Rule 4 of C.P.C. sometime around January 2011 to bring the legal heirs of deceased Durga Das and Shankar Banerjee on record. The Bank also filed an application for condonation of delay in filing the said substitution application being I.A. No. 15/2011. The appellant would complain that despite request, the copies of the applications were neither given in advance nor at the time of hearing on 22nd August, 2012 either to the appellant/respondents or their Counsel.
(3.) THE Tribunal passed the order dated 22nd August, 2012 allowing I.A. No. 10/2011. As per the appellant, this was done in a mechanical manner without the application of mind and without making any reference to I.A. No. 15/2011 where a prayer for condoning the delay in filing the application to substitute the L.Rs. of deceased was made. The grievance of the appellant is that the delay of almost 2000 days in filing the substitution application was not even considered and the substitution was allowed. To make the matter worse, the Tribunal is alleged to have culled out these names from thin air and the L.Rs. impleaded are said to have no relation with the deceased defendants, but the amended memo of parties was still taken on record.;


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