INDUSTRIAL DEVELOPMENT BANK OF INDIA Vs. ANTARTICA LTD

JUDGEMENT

(1.) THIS appeal has been preferred from an order dated 30th May, 2003, made by the learned Presiding Officer, Debts Recovery Tribunal (I), Kolkata, hereinafter referred to as "the DRT", The principal grievance of the appellants, as appeared from the Memorandum of Appeal, was that the learned Presiding Officer while disposing of the respondents' interlocutory application had wrongfully and illegally dismissed the claim of the appellants, even before the filing of any written statement by the respondents, and in the absence of any evidence in support of the contentions of the parties. According to the respondents, however, it was abundantly clear from the documents that the appellants had admitted having received their entire dues and that the DRT in exercise of its powers and jurisdiction had rightly dismissed the claim of the appellants. The hearing of the appeal was concluded and judgment was reserved. Thereafter, Advocate on behalf of the respondent No. 3 mentioned the matter, upon notice to the parties, and prayed for an opportunity of being heard. The respondent No. 3 did not contest the interlocutory application before the DRT nor appeared before this Appellate Tribunal or file any affidavit. However since there was no objection by Advocates for the parties, in the interest of justice the respondent No. 3 was allowed to submit before this Appellate Tribunal.

(2.) According to Counsel for the appellants, the DRT had exceeded its power and jurisdiction in dismissing the claim-petition, and that under Order 7, Rule 11 of the CPC, only a Court of law was empowered to reject a plaint at the threshold. He argued, that even if the DRT did have such power and jurisdiction, in the instant facts and circumstances, there was no case made out by the respondents on the basis of which the impugned order could be made. The learned Presiding Officer, he contended, had wrongfully and illegally decided questions on the merits of the case although there was no written statement by the respondents at that stage nor any evidence in support of the allegations and counter-allegations of the parties, and that therefore by reason of complete disregard of the rules of law and procedures and the principles of natural justice, the impugned order was bad and ought to be set aside. The letters exchanged by and between the parties, he submitted, clearly established that the respondents had requested the appellants in writing that the money received from the Insurance Company and deposited with the appellants should be kept in a short-term deposit at the highest rate of interest available, and it was not to be adjusted towards the then outstanding dues of the respondents and that accordingly no adjustment was made. He relied on the minutes of a joint meeting of the parties and submitted that the parties had reached consensus that, "The institution would allow the reinvestment of the settled insurance claim in the proposed scheme so as to restore the plant". He argued, that the DRT had failed to appreciate the facts and circumstances of the case and totally ignored the correspondence exchanged between the parties, which had been annexed to the pleadings before the DRT.

(3.) THE respondent No. 3, it was submitted by Advocate, was a guarantor only in respect to the first loan, and was totally unaware of the affairs of the respondent No. 1, including the execution of the later agreement. Since the earlier agreement was frustrated by fire, he argued, there could be nothing due or payable by the principal debtor and accordingly the respondent No. 3, in law, was absolved of any further liability as a guarantor. According to him, other than guaranteeing the agreement the respondent No. 1 did not apprise the respondent No. 3 in respect to the affairs of the company ever, and in those circumstances the provisions of Sections 133 to 141 and 176 to 177 of the Indian Contract Act applied and no liability could be imposed on the respondent No. 3.