This Appeal has been preferred by the Appellants under section 20 of the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as the "RDDBFI Act") against the order dated 22nd September, 2017, whereby opportunity for filing written statement was given to the Appellants on certain conditions and against the order dated 16th November, 2017, whereby recall application was dismissed.
2. The brief facts of the matter are that the Appellant No. 1-a private-limited company was sanctioned certain financial facility through its directors by the Respondents-Banks, which are 10 in numbers. Since the Appellants failed to observe the financial discipline, the Respondent-Bank filed an Original Application (O.A.) before the Tribunal below for recovery of Rs. 1484.00 crores and odd against the Appellants. After scrutiny by the registry, the Original Application was placed before the Presiding Officer on 10th April, 2017, who ordered to issue show-cause notice directing the Defendants to file the written statement within a month with a copy to the Applicants-Banks and the date was fixed for 7th June, 2017. On that date, it was found that the notices were sent on 26th May, 2017 and the period of 30 days was not over, so the matter was posted for 5th July, 2017. The proceeding indicates that on 5th July, 2017 the advocate of the Applicants-Banks appeared and filed affidavit for effected service of notices to the Defendants, so the service was treated to have been completed and the matter was listed before the Presiding Officer. On 22nd September, 2017, the Counsel for the Defendant Nos. 1 and 2 appeared and sought time for filing written statement. The Tribunal below observed that despite of availing sufficient opportunity, the Defendants/Appellants have not filed written statement till date. However, one opportunity was granted to file written statement subject to deposit of Rs. 50.00 crores by the Defendants in the loan account and Rs. 2.00 crores in Prime Minister National Relief Fund. The matter was posted for 18th October, 2017. The Appellants did not deposit the amount and filed an application to recall the order dated 22nd September, 2017 for removing the conditions, which was rejected by the Tribunal below vide order dated 16th November, 2017.
3. Being aggrieved by the said orders, the Appellants filed a writ petition No. 1124/2017 before the Hon'ble High Court of Madhya Pradesh, which was disposed off vide order dated 24th November, 2017 on the basis of alternative remedy with a liberty to file the Appeal before this Tribunal. Hence, the Appellants have filed this Appeal,
4. Heard the learned Counsels for the parties and perused the record.
5. Learned Counsel for the Appellants submitted that the Appellants being busy in multifarious businesses used to visit various cities. The notices were sent to their Mumbai address, whereas the Appellants were not there at the relevant time, so the notices were conveyed to them much later, hence it was not possible for them to file written statement within stipulated period of 30 days. The vakalatnama on behalf of the Defendants was filed on 21st September, 2017 and the time was sought for filing the written statement as the matter in O.A. was bulky one comprising more than 1300 pages, so the Tribunal below ought to have granted the time without any condition, but directed to deposit Rs. 50.00 crores in the loan account and Rs. 2.00 crores in the Prime Minister National Relief Fund, which was beyond its jurisdiction. It Was also not possible for the Defendants/Appellants to arrange that amount within a short period. The recall application was also filed but it was summarily dismissed, therefore, it was urged by the learned advocate that the condition of deposition of amount be waived and the Defendants/Appellants be given one opportunity to file written statement for judicious adjudication of the matter. In support of his contentions, the learned Counsels for the Appellants has relief upon the following judgments :
(I) Alok Saboo v. State Bank of India, (2014) 2 D.R.T.C. 244 (M.P., H.C.) (Gwalior Bench);
(II) R.R. Flour Mills Pvt. Ltd. v. State Bank of India, I (2014) B.C. 234 (M.P.);
(III) Jholei Baba Agency v. State Bank of India, 2009 Cut. L.T. 107368 : 2009 (2) Civ. L.J. 825;
(IV) Canara Bank v. V.K. Awasthy, Appeal (Civil) No. 2300 of 2005, decided on 31st March, 2005.
6. Per contra, the learned Counsel for the respondents-Banks contended that the appellants were required to file written statement within 30 days from the date of receipt of notice which was not filed. However, this period could be extended only for further 15 days on certain conditions, yet the Tribunal below has wrongly allowed the period beyond 45 days. The borrowers have not deposited even a single penny after filing the original application till date and unnecessarily prolonging the matter, so they are not entitled for any equitable relief. The Tribunal below has imposed the conditions in right perspective. The appellants have not availed that opportunity and the period has lapsed, so they cannot be allowed to file written statement as of now in view of the judgments passed by the Hon'ble Supreme Court in New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd., A.I.R. 2016 S.C. 86 and J.J. Merchants v. Shrinath Chaturvedi, A.I.R 2002 S.C. 2931.
7. Having heard the learned Counsels for the parties and considering the record, it is apparent that the Defendants have appeared before the Tribunal below on 22nd September, 2017 seeking time to file written statement, though the opportunity was given but with the stipulation of depositing Rs. 50.00 crores in the loan account and Rs. 2.00 crores in the Prime Minister National Relief Fund.
8. It is settled proposition of law that to grant or not to grant time to file written statement depends upon the facts and circumstances of the matter and it is judicious exercise of discretion of the Tribunal considering the relevant aspects. However, if it is found that unnecessarily delaying tactics are adopted, then the Court/Tribunal may close or grant the opportunity by imposing appropriate cost but not any harsh condition can be imposed for providing the date for filing the written statement. This view is fortified by the principles laid down in the judgments passed in Alok Saboo v. State Bank of India; R.R. Flour Mills Pvt. Ltd. v. State Bank of India; Jholei Baba Agency v. State Bank of India, Canara Bank v. V.K. Awasthy (supra).
9. Thus, I am of the considered view that the condition imposed by the Tribunal below on the Appellants for depositing Rs. 50.00 crores in the loan account and Rs. 2.00 crores in the Prime Minister National Relief Fund was not just and proper.
10. Now, the moot question for consideration is as to whether the Tribunal below was otherwise justified on 22nd September, 2017 in exercising the discretion of extension of time for filing the written statement in the given set and circumstances of the matter?
11. With regard to the service of notice on the Defendants, certain amendments were made in the RDDBFI Act w.e.f 4th November, 2016. Section 19 (5)(1) of the RDDBFI Act and Rule 12(1) to (7) of the DRT (Procedure) Rules, 1993 are relevant, which are reproduced as under:
"5(1) the Defendant shall within a period of thirty days from the date of service of summons, present a written statement of his defence including claim for set-off under sub-section (6) or a counter-claim under sub-section (8), if any, and such written statement shall be accompanied with original documents or true copies thereof with the leave of the Tribunal, relied on by the Defendant in his defence.
Provided that where the Defendant fails to file the written statement within the said period of thirty days, the Presiding Officer may, in exceptional cases and in special circumstances to be recorded in writing, extend the said period by such further period not exceeding fifteen days to file the written statement of his defence".
"12. Filing of written statement and other documents by the Defendant and by the Applicant as a reply to the written statement. - (1) The Defendant may, within a period of thirty days from the date of service of summons, file two complete sets of written statement including claim for set-off or counter claim, if any, along with documents in a paper book form.
(2) A copy of the written statement filed under sub-rule (1) shall be served to the Applicant.
(3) If the Defendant fails to file the written statement of his defence, including claim for set-off or counter claim under sub-rule (1), if any, within the period of thirty days, the Presiding Officer may in exceptional cases and special circumstances to be recorded in writing, extend the period, by such further period not exceeding fifteen days.
(7) If the Defendant or the Applicant as the case may be, fails to file the reply as specified above, the Tribunal may proceed forthwith to pass an order on the application as it thinks fit."
12. Section 19(4)(1) of the RDDBFI Act provides for issuance of summons on receipt of application for recovery of dues, which is as under:
"(4) On receipt of application under sub-section (1) or sub-section (2), the Tribunal shall issue summons with following directions to the Defendant-
(i) to show cause within thirty days of the service of summons as to why relief prayed for should not be granted.
13. Thus, a conjoint reading of the above provisions depicts that the Tribunal is required to specify on summons to show cause within 30 days of the service of summons and the Defendant is required to file the written statement within the period of 30 days, However, this period of 30 days can further be extended for a period not exceeding 15 days in exceptional cases and special circumstances to be recorded in writing. It is also clear from the above provisions that the period of 30 days is to be reckoned from the date of service of summons.
14. The analogous provision with regard to filing the written statement is provided for the complaint filed under section 13 of the Consumer Protection Act, 1986, wherein written statement is required to be filed within 30 days or such extended period not exceeding 15 days. Though in the Consumer Protection Act, it has not been explicitly provided that from which date the period of 30 days is to be reckoned, but in the RDDBFI Act, by amendment dated 4th November, 2016, it has specifically been incorporated that the period of 30 days will commence from the service of the summons, that is why such stipulation is mentioned in the summons and show cause-notice issued by the Tribunal. The Hon'ble Supreme Court in Dr. J.J. Merchant v. Shrinath Chaturvedi (supra) and New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd. (supra) has categorically held that the Presiding Officer can extend the period of filing the written statement only for 15 days and not beyond that, meaning thereby, the provision for not exceeding 15 days is mandatory in nature and not directory. This leaves no discretion with the Presiding Officer to further extend the time. The principle laid down in the above referred judgments is applicable in the present matter because of the similar provisions.
15. Therefore, I have no hesitation to hold that the period of 30 days commences from the date of service of summons on the Defendants and within those 30 days the Defendants are required to file written statement with the copy to the Applicants. In exceptional cases, the Presiding Officer may after recording the reasons extend the period for filing written statement for 15 days but not beyond that in any case, with or without any condition.
16. Examining the facts of the instant case on the basis of above principle, it is obvious from the record that the Original Application was filed on 29th March, 2017, which was ordered to be registered on 6th April, 2017 and was placed before the Presiding Officer on 10th April, 2017. On that date, the Presiding Officer, DRT ordered to issue summons to the Defendants/Appellants stating inter alia to show cause within 30 days from the service of the summons and also directed to file written statement with copy to the Applicants i.e. Respondents here in this Appeal and the date was fixed for 7th June, 2017 However, the notices were issued on 26th May, 2017, hence no order was passed on 7th June, 2017 as the period of 30 days was not over, therefore, on 6th July, 2017 the notices were deemed to have been served and the file was ordered to be placed before the Presiding Officer on 22nd September, 2017. Admittedly, no written statement was , filed by the Appellants, either within 30 days or on 5th July, 2017, 6th July, 2017 and also on 22nd September, 2017.
17. It is further observed that as per track record of the Indian Post submitted by the Respondents-Banks, the summons were delivered to the Appellants on 30th May, 2017 at Bombay except Defendant No. 1 which was delivered on 31st May, 2017. The delivery of summons was not challenged before the Tribunal below nor any specific objection was raised before me during the course of argument, so the delivery of summons cannot be disputed and I find no substance in the argument that the borrowers/guarantors had gone to various places at that time, so it took time to collect the notices and to prepare the reply. Thus, on the basis of the record, it is proved that summons were served on 30/31st May, 2017, hence the Appellants were required to file written statement on or before 30th June, 2017, but it was neither filed nor the Appellants appeared before the Tribunal below. The date fixed as 5th June, 2017 was for their appearance and confirmation of service of summons. Thereafter, no written statement was filed even on or before 22nd September, 2017.
18. Though, the Tribunal below was empowered only to extend the period up to 15th July, 20
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17 if deemed just and appropriate for valid reasons, but on 22nd September, 2017, the Tribunal below has exceeded its jurisdiction and the statutory powers in giving opportunity even on the condition of depositing Rs. 50.00 crores in the loan account and Rs. 2.00 crores in the Prime Minister National Relief Fund. Thus, the Tribunal below was not competent to allow the Defendants to file written statement even with the condition of depositing certain amount and was also not justified to impose such condition and ought to have closed the right of filing the written statement. 19. In view of the observations made above, I find that the Appellants were not entitled to file the written statement before the Tribunal below after expiry of 45 days and the Tribunal below was not empowered to provide the opportunity to the Appellants to file the written statement with certain condition. 20. Thus, the order dated 22nd September, 2017 passed by the Tribunal below is not sustainable because of the reasons stated herein above and the Appellants in this Appeal are not entitled to any relief qua filing the written statement before the Tribunal below, Consequently, there is no need to interfere in the order dated 16th November, 2017 passed by the Tribunal below by which the recall application of the Appellant was dismissed. The Appeal is accordingly disposed off. No order as to costs. The interim order passed earlier stands vacated. 21. A copy of this judgment be forwarded to the parties as, well as to the DRT concerned. Appeal disposed off.