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Ambalal Sarabhai Enterprises Ltd. v/s International Asset Reconstruction Co. Pvt. Ltd. & Another

Company & Directors' Information:- ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED [Active] CIN = U65999MH2002PLC134884


Company & Directors' Information:- AMBALAL SARABHAI ENTERPRISES LIMITED [Active] CIN = L52100GJ1978PLC003159

Company & Directors' Information:- INDIA RECONSTRUCTION CORPORATION LIMITED [Active] CIN = U51109UP1945PLC001293

Company & Directors' Information:- R B ENTERPRISES INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51311WB2002PTC094436

Company & Directors' Information:- SARABHAI INTERNATIONAL LTD [Active] CIN = U51900MH1973PLC016381

Company & Directors' Information:- SARABHAI LIMITED [Not available for efiling] CIN = U99999MH1938PTC002841

Company & Directors' Information:- INDIA RECONSTRUCTION LIMITED [Dissolved] CIN = U99999MH1947PLC006083

Company & Directors' Information:- SARABHAI PVT LTD [Amalgamated] CIN = U70200GJ1938PTC000135

    Misc. Appeal No. 16 of 2020

    Decided On, 08 September 2020

    At, Debts Recovery Appellate Tribunal At Mumbai


    For the Appellant: Mihir Thakore, Sr. Advocate, Megha Jani, Rishabh Shah, M/s. Raval Shah & Co., Advocates. For the Respondents: R1, Rohit Gupta, Nikhil Rajani, M/s. V. Deshpande & Co., Advocates.

Judgment Text

This appeal is coming up for hearing through Video Conference.

2. This appeal is preferred against order dated 4.8.2020 in Interim Application (I.A.) No. 175/2020 and I.A. No. 176/2020 in Transfer Original Application No. 2571/1999 (High Court Suit No. 2520 of 1989) on the file of Debts Recovery Tribunal No. 1, Mumbai (the Tribunal below).

3. Heard both sides.

4. Advocate for appellants submitted that on 4.9.2017 learned DRT-1, Mumbai, directed appellants to file their CAOD and on 2.11.2017 DRT-1, Mumbai, gave a last chance to appellants to file their CAOD. On 16.1.2018 appellants sought time for filing their CAOD, but the DRT-1, Mumbai, rejected their request. On 12.4.2018 appellants filed applications for discovery, production and inspection of certain documents from respondent No. 1, which applications are still pending. On 1.6.2018 there was fire accident in Scindia House where the office of DRT-1, Mumbai and other Tribunals and this Tribunal are located which became non-functional, due to which matters were automatically posted to some dates, in this way this matter was also posted from time-to-time. It is submitted that Writ Petition No. 386 of 2020 was filed by respondent No. 1 before the Hon’ble High Court raising grievance about non-availability of infrastructure of DRTs. On 11.2.2020 the Hon’ble High Court directed DRT to expedite hearing of the O.A. On 17.6.2020 new Presiding Officer of DRT No. 1, Mumbai, took over charge from that date, this matter was listed for the first time before the regular P.O. It is submitted that on 29.6.2020 following order is passed :

“The learned Counsel for the assignee of applicant No. 2 submits that since record in the present matter is bulky and this matter required detailed arguments, thus, he submits that instead of virtual hearing physical hearing may be taken in the present matter. Even otherwise, he submits that short adjournment may be allowed. Meanwhile, he will try to assist for addressing virtually, if possible.

Learned Counsel for defendant No. 1 has no objection for the same.

List this matter for hearing on 20.7.2020.”

5. On 20.7.2020 on the request of both parties, the matter is adjourned to 4.8.2020 for hearing. On 4.8.2020 appellants filed these applications with following three prayers:

(a) That this learned Tribunal may be pleased to condone the delay of 269 days in filing the CAOD and reply to Claim Affidavit of applicant No. 2.

(b) That this learned Tribunal may be pleased to recall the order dated 16.1.2018 whereby the right of this defendant to the CAOD had been forfeited.

(c) That this learned Tribunal may be pleased to take the CAOD of defendant No. 1 and reply to the Claim Affidavit of applicant No. 2 on record which are ready to be tendered.

6. It is further submitted though oral request of appellants was rejected, matter did not proceed from 2018 till 2020 and it has still not proceeded; production application is to be heard, original application is to be heard in the third week of September, 2020 so taking this Affidavit on record is not going to cause any prejudice to anybody.

7. Advocate for appellants further submitted that this is a procedural order and is not a substantive interim order and Affidavit of appellants is ready, therefore, an opportunity may be given.

8. Advocate for respondent No. 1 vehemently opposed and contended that the delay of 269 days is not correct and it is not known how these days are calculated if it is from 16.1.2018, then it will be more than 2 years, therefore, condonation of delay in receiving the claim affidavit is not maintainable. It is submitted that Tribunal below rightly rejected the prayer, because from 16.1.2018 appellants kept quite without filing their claim affidavit. He also contended on 12.4.2018 appellants filed applications for discovery, production and inspection of certain documents, but they have not challenged the order dated 16.1.2018 through which their right to file claim affidavit is forfeited. He further contended even after fire accident, the office of the DRT was not closed and the registry was working and nothing prevented appellants from filing the very same affidavit before the registry and for these reasons he contended that there are no grounds to consider the request of the appellants and to set aside impugned order dated 4.8.2020.

9. I have perused the material papers including order dated 16.1.2018 and impugned order dated 4.8.2020. From a perusal of record it is to clear that there are some lapses in the part of the appellants in not filing claim affidavit within time granted. But as the appellants are now ready with the claim affidavit, no prejudice would be caused to opposite party i.e. financial institution, because main case is to be decided on the basis of material evidence placed before it. Simply because claim affidavit is received, it does not mean that claim affidavit is accepted and the case of the appellants as stated in their claim affidavit is accepted in toto. Ultimately the Tribunal has to decide the correctness of the claim affidavit with reference to other material documents and material evidence. However as claim affidavit is filed belatedly, the opposite party i.e. financial institution, must have a chance of filing their additional affidavit in answer or reply to the claim affidavit of appellants.

10. Considering these aspects I pass the following order:


(1) Impugned order dated 4.8.2020 in I.A. No. 175/2020 and I.A. No. 176/2020 in T.O.A. No. 2571/1999 (High Court Suit No. 2520 of 1989) on the file of DRT No. 1 Mumbai, is set aside and the Tribunal below shall receive Claim Affidavit of the appellants.

(2) Appellants shall file their claim affidavit in the Tribunal below within week days from now after duly serving on opposite party.

(3) Respondent financial institution

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shall file their additional affidavit, if any, in answer to claim affidavit of appellants within 10 days from the date of filing of claim affidavit by appellants. (4) Tribunal below shall decide the main O.A. without being influenced by any of the observations made hereinabove and any observations made in the impugned order dated 4.8.2020. (5) The Tribunal below shall dispose of the main O.A. as per the directions of the Hon’ble High Court given in its order dated 11.2.2020. (6) The appeal is accordingly disposed of. (7) All Miscellaneous applications, if any, are dismissed as infructuous. Appeal disposed of.