CWP No. 17252 of 2007 1
In the High Court of Punjab and Haryana
at Chandigarh
CWP No. 17252 of 2007
Date of Decision: 03.10.2008
Jit Singh and others ...... Petitioners
Versus
Central Bank of India and others ...... Respondents
Coram: Hon'ble Mr. Justice Adarsh Kumar Goel
Hon'ble Mr. Justice Ajay Tewari
1. Whether Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
Present: Mr.Amit Rawal, Advocate
for the petitioners.
Mr.R.S.Bhatia, Advocate
for respondent No.1.
Mr. C.S. Munjal, Advocate
for respondent No.2.
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Ajay Tewari, J.
The petitioners have challenged the order dated 15.10.2007
(Annexure P-17) passed by the Debt Recovery Appellate Tribunal, New
Delhi (hereinafter referred to as ‘the Appellate Tribunal’) dismissing the
appeal of the petitioners against the order dated 1.10.2003 (Annexure P-12)
passed by the Debt Recovery Tribunal, Chandigarh (for short ‘DRT’).
The petitioners and respondents No.5, 6, 7 and 8 are all family
members who are partners in a firm called M/s Rupal Enterprises (as well as
CWP No. 17252 of 2007 2
M/s Rupal Industries and M/s Rupal Engineering), a debtor of the Central
Bank of India-respondent No.1. In the year 1993 the respondent No.1 filed
a suit for recovery of Rs.12,00,493.50 against the aforesaid Rupal Industries
and the petitioners as well as respondents No. 5 to 8. In the said suit it was
pleaded by the bank that the security for the loan was Time Deposit
Receipts (TDRs) and that additional equitable mortgage of property bearing
factory building of plot No. 728, Industrial Area-B, had been created even
though the said property had earlier been mortgaged as security for a loan
to M/s Rupal Industries.
The above mentioned civil suit came up for hearing on
5.8.1993 after service was complete and was adjourned to 10.9.93 for filing
written statement. It was subsequently adjourned to 11.10.93, 27.11.93,
10.1.94 and finally to 24.10.94 for the same purpose on which date ex parte
proceedings were ordered against the defendants. On 24.1.1995
Government of India promulgated an ordinance which was ultimately
passed as an Act called the Recovery of Debts due to Financial Institutions
Act, 1993 as a result of which the suit was ordered to be transferred to the
Debt Recovery Tribunal, Jaipur vide order dated 24.1.95. This ordinance
was stayed and consequently the suit continued on the board of learned
Senior Sub Judge, Ludhiana which passed ex parte judgment and decree
dated 27.3.96. After the decree ultimately the stay on the Act was vacated
and the matter was referred to the Debt Recovery Tribunal, Jaipur for
execution and it was only from the execution notice that the petitioners
came to know about the ex parte decree and within short time thereafter they
moved an application for setting aside the said ex parte decree.
Main allegation of the petitioners is that the document by which
CWP No. 17252 of 2007 3
additional equitable mortgage had been created of the property in dispute in
favour of the bank was forged. It is further averred that in respect thereof an
FIR under Sections 420/467/468/471 read with Section 120-B IPC has been
lodged against the bank officers and the trial thereof is pending. The
subsidiary allegation is that it was incumbent upon the Civil Court to have
issued fresh notice to the petitioners if the suit was to continue before it.
During the pendency of the application U/O 9 Rule 13 CPC recovery
proceedings continued and the mortgaged property was put to auction on
16.12.99. By order dated 1.10.2003 the said application for setting aside ex
parte proceedings was dismissed and thereafter by order dated 7.10.2003
sale in favour of the auction purchaser, respondent No.2, was confirmed.
In appeal against the said order the learned Appellate Tribunal
while dismissing the same by the impugned order, held as follows:-
“Otherwise also, the restoration application was bereft of
any merit. It is crystal clear from the fact that the order to
proceed ex parte had been passed on 24.10.1994. Though the
defendants appeared on 24.1.1995, but they never moved any
application for setting aside the ex parte order dated 24.10.1994
despite the fact that operation of the RDDBFI Act had been
stayed by the superior court and the jurisdiction continued to be
vested with the Civil Court which dealt with the matter and
ultimately passed the ex parte decree on 27.3.1996. To say in
other words, they allowed the case to proceed ex parte. It is
notorious that a defendant with a weak case allows the case to
proceed ex parte and then belatedly applies for restoration to
linger on the litigation. The appellants/defendants have chosen
CWP No. 17252 of 2007 4the same course here too.
No notice at all was necessary to be issued afresh to the
defendants when the jurisdiction continued to be with the Civil
Court which could proceed further in the matter till the vacation
of the stay as to the operation of the RDDBFI Act by the
superior court. The Civil Court rightly proceeded ahead and
passed the ex parte decree dated 27.3.1996. The
defendants/appellants have to blame themselves for the same.
The ground advanced by them to set aside the ex parte decree is
not backed by any justifiable cause or sufficient reason and the
appeal has to fail.”
In the present petition the petitioners have expanded the scope
of the litigation before the Debt Recovery Tribunal as well as the Appellate
Tribunal by including the allegation regarding forgery of the document
creating additional charge.
In our opinion the findings of the Debt Recovery Tribunal as
well as the Appellate Tribunal on the application for setting aside ex parte
decree are unexceptionable and no fault can be found therewith. Even
before us learned counsel for the petitioner could not give any satisfactory
explanation either for their absence on 24.10.94 or for their inaction in not
filing the application for setting aside ex parte proceedings on 25.1.95- the
date on which the suit was initially ordered to be transferred to the Debt
Recovery Tribunal.
Mr. Amit Rawal, learned counsel for the petitioners relied
upon the case of Tea Auction Ltd. v. Grace Hill Tea Industry and
another reported as (2006) 12 SCC 104, Lal Devi and another v. Vaneeta
CWP No. 17252 of 2007 5
Jain and others reported as (2007) 7 SCC 200 and Varadaraja Perumal
Temple v. Pattabiraman and another reported as (2005) 10 SCC 292 in
support of his prayer for setting aside the ex parte decree.
In our view none of the said authorities apply to the facts of
this case. In the matter of Tea Auction Ltd.(supra), the dispute was
regarding the initial service of summons whereas in the present case
admittedly the petitioners had been appearing before the Civil Court. In the
case of Lal Devi and another (supra), counsel for the defendants did not
appear on one date and on the same day ex parte evidence was led,
arguments were heard and judgment was pronounced. In the case of
Varadaraja Temple (supra), the Hon’ble Supreme Court condoned the
delay in filing the application to set aside ex parte decree since the appellant
was a temple, delay being due to the transfer of its executive officer.
As regards plea of the petitioners regarding the forgery and
their contention that the decree having been obtained by fraud was void,
learned counsel for the petitioners has relied upon the case of S.P.
Chengalvaraya Naidu (Dead) by LRs v. Jagannath (Dead) by LRs and
others, (1994) 1 Supreme Court Cases 1. The stark difference between the
said matter and the present case is that there the trial Court had given a
finding regarding fraud at the stage of passing of final decree and it was in
that context that the Hon’ble Supreme Court held that the preliminary decree
was liable to be set aside. In the present case it would not be possible for
this Court to return any such finding in writ proceedings. Apart from this, it
cannot be lost sight of that whichever hat the petitioners choose to wear
they are defaulting borrowers of the bank and that in this interregnum the
rights of respondent No.2, the auction purchaser, have supervened.
CWP No. 17252 of 2007 6
In this view of the matter we are constrained to hold that no
relief can be granted to the petitioners in the present case. It is, however,
made clear that in case the Criminal Court upholds the allegation of forgery
levelled by the petitioners, it would be open to the petitioners to sue
respondent No.1 for damages and nothing mentioned in this judgment, or in
the judgments of the Appellate Authority as well as the Debt Recovery
Tribunal would be read against them.
Accordingly this petition is dismissed with no order as to costs.
(AJAY TEWARI)
JUDGE
(ADARSH KUMAR GOEL)
JUDGE
October 03, 2008
sunita