w w w . L a w y e r S e r v i c e s . i n



Vinayak Industries Limited and others v/s Bank of Baroda

    Misc. Appeal No. 18 of 2009

    Decided On, 12 November 2009

    At, Debt Recovery Appellate Tribunal At Delhi

    By, J. M. MALIK

    A. K. Sharma, Pallav Saxena



Judgment Text


The Judgment was delivered by : Hon'ble Justice J. M. Malik

In this case ex parte decree was passed by order dated 14.8.1998, wherein the appellants were directed to pay a sum of Rs. 1,04,88,598.84 along with pendente lite and future interest @ 17.75% p.a. in respect of Export Packing Credit Facility, @ 17.75% in respect of Foreign Bill Purchase/Discount Facility and @20.75% p.a. in respect of Bill Past Due Account (Bank Guarantee Facility).

2. The appellants filed an application under Order 9, Rule 13 read with Section 151, CPC on 26.8.2004 after the lag of more than six years. The said application was dismissed by the Presiding Officer, DRT-II, Delhi vide his order dated 25.9.2008. Aggrieved by that order, the present appeal has been preferred.

3. I have heard the Counsel for the parties.

4. The Counsel for the appellants vehemently argued that the appellants were not served in this case. He drew my attention towards the fact that the receipt of A.D. cards filed before the Tribunal clearly go to show that stamp of Rs. 13/- was pasted on the A.D. envelopes. This fact clearly goes to show that the entire paper book was not sent to the appellants. He argued that Rule 11 of the Debts Recovery Tribunal (Procedure) Rules, 1993 lays down that a copy of the application and paper-book shall be served on each of the defendants as soon as they are filed, by Registrar by registered post.

5. The next submission made by the Counsel for the appellants was that the respondent Bank has got both business as well as the residential addresses of the appellants. It was in their knowledge that the appellants had sold this property before the registered letters were sent to the appellants, it was argued that the Bank deliberately sent the notices at the business address of the appellants. The learned Counsel, however, fairly conceded that the appellants did not intimate the Bank that the appellants had sold the property and all their future correspondence should be sent to their residential addresses. They also did not apprise of the Bank that RIICO had taken possession of their business premises. The acknowledgement receipts were never received back.

6. On the other hand, the learned Counsel for the respondent Bank placed heavy reliance on the order-sheet dated 31.3.1998. The said order-sheet is reproduced as under:

"31.3.98

O.A. No. 319/97

Present: Sh. Arun Aggarwal, Counsel for applicant Bank.

Sh. Rajeev Sharma, Counsel for the defendants.

Case put up for after lunch for order."

7. The learned Counsel for the appellants argued that there was no Vakalatnama in favour of Rajeev Sharma. He did not file memo of appearance. The above said order was recorded inadvertently. The learned Counsel for the appellants, however, conceded that no action was initiated against Mr. Rajeev Sharma, Advocate.

8. The learned Counsel for the appellants next argued that the appellants came to know about the ex parte decree only when they received a demand notice dated 15.12.2003 for a sum of Rs. 3,01,50,317/- issued by the Recovery Officer, DRT- I, Delhi which was pasted at the residential address of the appellants. According to the learned Counsel, this meant that the residential address of the appellants was also known to the respondent Bank.

9. Counsel for the appellants finally argued that the appellants have deposited Rs. 5 lakh. But, according to the learned Counsel for the respondent Bank, the total outstanding comes to Rs. 10 crores. Rs. 5 lakh is only a chicken feed keeping in view the total amount which is yet to be paid by the appellants. However, Counsel for the appellants urged that his clients are unable to deposit a single paisa if the Court proposes to set aside the ex parte order and restore the suit to its original position subject to payment of some amount.

10. All these arguments have left no impression upon the Court. In case the appellants had left the business premises in dispute, it was their bounden duty to inform the Bank that further correspondence to them be addressed at such and such address. The fault if any lies at the doors of the appellants. It is also not made clear whether the person who took possession of the business premises are different from the appellants or were not known to them or their directors are different from the directors of the appellant firm.

11. Again, Mr. Rajeev Sharma, Advocate appeared for them. It is for them to find out under whose instructions Mr. Rajeev Sharma appeared before the Court. The appellants did not initiate any action against him. Since Mr. Rajeev Sharma appeared as an Advocate before the learned DRT, therefore, the correctness of the above said order has to be presumed particularly in the absence of any evidence in rebuttal of the above said order. It has also to be assumed that he appeared before the Court on the instructions given by the appellants themselves. No Advocate will appear on behalf of any party of his own accord. It appears that the appellants have set up this defence in order to pull the wool over the eyes of law.

12. It is settled law that even if the acknowledgement receipt was not received back, the service of the registered notice has to be presumed. There is no evidence to rebut that presumption. In Basant Singh and Another v. Roman Catholic Mission, V (2002) SLT 545=AIR 2002 SC 3557, it was held that the appellants could have examined the postman who would have been the material witness and whose evidence would have bearing for proper adjudication. The appellants have failed to discharge the onus cast upon them by the statute.

13. The Hon'ble Apex Court in another case Madan and Co. v. Wazir Jaiver Chandra, AIR 1989 SC 630, was pleased to hold that the proviso insists that before any amount of rent can be said to be in arrears, a notice has to be served through post. All that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgement due or otherwise) containing the tenant's correct address. Once he does this and the letter is delivered to the Post Office, he has no control over it. It is then presumed to have been delivered to the addressee under Section 27 of the General Clauses Act.

14. In a recent authority reported in Sunil Poddar & Ors. v. Union Bank of India, I (2008) SLT 521=1 (2008) CLT 135 (SC)=AIR 2008 SC 1006, the Apex Court was pleased to hold:

"19. It is, therefore, clear that the legal position under the amended Code is not whether the defendant was actually served with the summons in accordance with the procedure laid down and in the manner prescribed in Order 5 of the Code, but whether (i) he had notice of the date of hearing of suit; and (ii) whether he had sufficient time to appear and answer the claim of the plaintiff. Once these two conditions are satisfied, an ex parte decree cannot be set aside even if it is established that there was irregularity in service of summons. If the Court is convinced that the defendant had otherwise knowledge of the proceedings and he could have appeared and answered the plaintiff(s) claim, he cannot put forward a ground of non-service of summons for setting aside ex parte decree passed against him by invoking Rule 13 Order 9 of the Code. Since the said provision applies to Debt Recovery Tribunals and Appellate Tribunals under the Act in view of Section 22(2)(g) of the Act, both the Tribunals were right in observing that the ground raised by the appellants could not be upheld. It is not even contended by the appellants that through they had knowledge of the proceedings before the DRT, they had no sufficient time to appear and answer the claim of the plaintiff-Bank and on the ground, ex parte order deserves to be set aside."

15. Hon'ble Punjab & Haryana High Court in case of Ajita Sharma v. Rakesh Kumar Sharma, 1999(1) Civil Court Cases 363 (P & H), held as under :

"If a person knows about a pending case and still ignores the said litigation, it would be wholly unfair for that person to urge that he had not been formally served."

16. Same view was taken by the Chairperson, DRAT, Delhi in case reported in In rays v. State Bank of India and Another, I (2008) BC 67.

17. Under these circumstances, the plea that the complete paper book was not sent to the appellants pales into insignificance. It is, thus, clear that there is delay of more than 16 years in moving the above said application under Order 9 Rule 13, CPC. There was delay of 565 days in case of P.K. Ramachandran v. State of Kerala and Another, IV (1997) CLT 95 (SC)=AIR 1998 SC 2276, wherein it was held:

"6. Law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribe and the Courts have no power to extend the period of limitation on equitable grounds. The discretion exercised by the High Court was, thus, neither proper nor judicious. The order condoning the delay cannot be sustained. This appeal, therefore, succeeds and the impugned order is set aside. Consequently, the application for condonation of delay filed in the High Court would stand rejected and the Miscellaneous First Appeal shall stand dismissed as barred by time. No costs."

18. In another authority, Pundlik Jalam Patial (D) by LRs. v. Executive Engineer, Jalgaon Medium Project and Another, VIII (2008) SLT 575=IV (2008) CLT 138 (SC)=Civil Appeal No. 6414 of 2008 decided on 11.3.2008, it was held "that settled rights cannot be lightly interfered with by condoning inordinate delay without there being any proper explanation of such delay on the ground of involvement of public revenue. It serves no public interest. The High Court gravely erred and exercised, its discretion to condone the inordinate delay of 1724 delays though no sufficient cause has been shown by the appellants."

19. Lastly, the observations made by the Hon'ble Apex Court in case reported in S.P. Chengalvaraya Naidu (dead) by LRs. v. Jagannath (dead) by LRs., AIR 1994 SC 853, apply to the facts of this case, to a hair, wherein it was held:

"The principle of finality of litigation cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The Courts of law are meant for imparting justice between the parties. One who comes to the Court, must come with clean hands. We are constrained to say that more often than not, process of the Court is being abused. Property-grabbers, tax-evaders, Bank-loan-dodgers and other unscrupulous persons from all walks of life find the Court process a convenient lever to retain the illegal gains indefinitely. We have no hesitation to say that a person whose case is based on falsehood, has no right to approach the Court. He can be summarily thrown out at any stage of the litigation."

20. Similar view was taken by Apex Court in a recent authority reported as Prestige Lights Ltd. v. State Bank of India, VII (2007) SLT 440=111 (2007) CLT 296 (SC)=IV (2007) BC 240 (SC)=(2007) 8 SCC 449.

21. The whole gamut of the facts and circumstances of this case leans on the side of the respondent Bank. The appeal is without merit and as such it is hereby dismissed with costs. Counsel's fee as per Bank's norms.

Copies of this order be furnished to the parties as per law and another copy along with record be sent to the DRT concerned forthwith.