Delhi High Court High Court

Lalit Kumar Agarwal & Anr. vs Debts Recovery Tribunal on 20 December, 1999

Delhi High Court
Lalit Kumar Agarwal & Anr. vs Debts Recovery Tribunal on 20 December, 1999
Equivalent citations: 2000 IAD Delhi 847, 2000 100 CompCas 187 Delhi, 83 (2000) DLT 268, 2000 (52) DRJ 297
Author: S Agarwal
Bench: D Gupta, S Agarwal


ORDER

S.K. Agarwal, J.

1. Admit. Rule D.B. Since the point involved in this writ petition is short, learned counsel for the parties stated that the final arguments may be heard. Accordingly, by this order we are disposing of the writ petition itself. We have heard learned counsel for the parties and have been taken through the record.

2. This is a petition under Articles 226 of the Constitution of India seeking appropriate writ or directions for quashing of the order dated 22nd April, 1997 passed by Debts Recovery Tribunal, Delhi (for short the DRT) directing petitioners (defendants) to pay a sum of Rs. 46,18,309/- along with interest at the rate of Rs. 25% per annum, and also for quashing the order dated 26th November, 1998, of the DRT dismissing the application of petitioners thereby declining to set aside its earlier order dated 22nd April, 1997 in OA No. 911/95 (Suit No. 549/94).

3. Facts giving rise to this petition briefly are that Indian Overseas Bank (for short the Bank) respondent No. 2 (plaintiff), filed a suit on 9th March, 1994, in this court for recovery in a sum of Rs. 46,18,309/- along with pendente-lite and future interest at the rate of 25% per annum, against petitioners and their partnership firm M/s. Tirupati Balaji Motors (MM Division), pleadings that petitioners by representing that they were appointed dealers of M/s. Mahindra and Mahindra, Bombay, for Union Territo-ry of Delhi, obtained from the bank revolving L.C. limit and cash credit limit on 29th June, 1991; that the petitioners availed the said credit limits but did not pay to the bank, the suit amount including principal and interest thereon.

4. The said suit came up for hearing on 11th March, 1994, on which date learned Judge of this Court issued Summons and notices to petitioners (defendants) at two addresses i.e. at Agra as well as at Delhi, for 11th July, 1994 and passed an order restraining them from disposing of their 1/3rd share in the property bearing No. 3/281, Roshan Mohalla, Agra, U.P. and 1/4th share in the property bearing No. 29 Gopi Chand Shivhare Marg., Agra (UP) and also restrained them, from withdrawing Rs. five lakhs i.e. security amount lying, with M/s. Mahindra & Mahindra Limited. Provisions of Order 39, Rule 3 Code of Civil Procedure, 1908 (for short Code) were or-dered to be complied with within one week. Summons and notices were ordered to be issued by ordinary process as well as by registered AD post; peti-tioners could not be served for that date and were again ordered to be served in the same manner for 15th September, 1994, on that date again they were not served and the same process was repeated for 5th December, 1994.

5. On 5th December, 1994 the Presiding Officer was on leave. The case was renotified for 23rd February, 1995, on which date summons issued earlier by ordinary process were received back unserved and the service report through registered post was awaited; therefore again fresh summons and notices were ordered to be issued to the petitioners/defendants for 24th July, 1995. In the meantime, the suit stood transferred to the Debts Recovery Tribunal, established under the Recovery of Debts Due to Banks and Financial Institu-tions Act, 1993 as the jurisdictional value of the suit was more than Rs. 10 lakhs. The parties were directed to appear before the DRT for further proceedings on 7th September, 1995.

6. On 7th September, 1995 Presiding Officer, DRT was on leave. The case was listed on 10th October, 1995; when it was brought to the notice of the tribunal, that on four previous occasions summons, notices were sent but the petitioners/defendants could not be served and that they were deliberately avoiding service. Under the circumstances, the tribunal allowed petitioner/defendants to be served through publication in the Statesman (Delhi) edition and Agra (edition) for 15th December, 1995. As per the orders, notice of said (OA No. 911/95) suit was duly published in “States-man” requiring the petitioners to appear before the tribunal on 15th Decem-ber, 1995. Petitioners did not appear. The tribunal felt satisfied that the petitioners were duly served by substituted service they were proceeded against ex parte and listed the matter for ex parte evidence; even thereaf-ter petitioners did not appear, consequently vide the impugned order dated 22nd April, 1997 the tribunal held them jointly and severally, liable to pay to the respondent/bank a sum of Rs. 46,18,309/- along with pendente lite interest and future interest at the rate of 25% per annum till the date of realisation.

7. On 31st October, 1998 the petitioners moved an application under section 22 of the Act read with Order 9, Rule 13 of the Code of Civil Procedure, 1908 praying for setting aside the order dated 22nd April, 1997 pleading therein that they could not appear before the tribunal earlier as they were not aware of the proceedings against them and that they came to know about the case only on 7th October, 1998 when the notice of attachment was pasted at their property at Agra, and enquiries made thereafter re-vealed about the said orders against them. After considering their pleas the tribunal held that the petitioners were duly served through publication in the ‘Statesman’, and did not find any ground for setting aside the order dated 22nd April, 1997 passed in OA 911/95 and dismissed their application vide order dated 26th November, 1990.

8. Petitioners have challenged the legality and validity of the said order dated 22nd April, 1997 as also the order dated 26th November, 1998 of the tribunal, on the ground that there was no effective service on them and that the said orders were passed against principles of natural justice.

9. At preliminary hearing, learned counsel for petitioners gave an under-taking on their behalf to deposit a sum of Rs. 13.5 lakhs with the respond-ent/bank i.e. a sum of Rs. 5 lakhs within six weeks from the date of the order and the balance amount of Rs. 8.5 within four weeks thereafter. Notice was issued of the above petition and the execution of the impugned order against the petitioners was stayed on 28th May, 1999. As petitioners failed to comply with the said undertaking despite extension of time, said stay order was vacated. However, the arrest of the petitioners in execution of the impugned order was stayed pending disposal of the writ petition.

10. Learned counsel for the petitioners argued that at no point of time the petitioners were ever served after the suit was transferred before the DRT, Delhi and no effort was made by the tribunal to effect service through ordinary mode and substituted service effected through publication in the ‘Statesman’, was not enough, as no edition of the ‘Statesman’ is published from Agra, and as such the order dated 15th December, 1995 proceeding ex parte against the petitioners as well as the subsequent final order dated 22nd April, 1997 passed by the DRT was bad in law, and in violation of the principles of natural justice.

11. Learned counsel for the respondent bank, on the other hand, argued that the petitioners were intentionally and deliberately avoiding service; that on previous four occasions between 11th July, 1994 to 25th July, 1995 the summons and notices were sent to their Delhi address and at their two Agra Addresses; as per the reports on the summons service was effected by affixation after the summons were refused to be accepted at the residence of the petitioners at Agra; report on the envelop sent by registered AD post at correct address of the petitioners for service of summons on them were returned by postal authorities with the endorsement “refused” and it was only thereafter that the service was effected on the petitioners through publication and they were rightly proceeded against ex parte by the tribunal.

12. Law with regard to the powers of this court is well settled. In Indus-trial Credit and Investment Corporation of India Ltd. Vs. Grapco Industries Limited & Anr., , Supreme Court observed “There is no doubt that the High Court can even interfere with interim orders of the courts and tribunals under Article 227 of the Consti-tution if the order is made without jurisdiction. But then a too technical approach is to be avoided.”

13. In our considered view, under the facts and circumstances noticed above, the impugned orders passed by the tribunal cannot be said to be in violation of principles of natural justice or without jurisdiction. Argu-ments by the learned counsel for the petitioners giving rise to the ques-tion whether the reports on the earlier summons/notices were correct or not or whether refusal report on registered AD was falsely procured by the respondent/bank and whether service by publication in newspaper was done or not, involve highly disputed question of facts, which we are not inclined to examine in exercise of our writ jurisdiction, particularly when every order of the tribunal is appealable before the appellate tribunal under Section 20 of the Act. It may be observed that prime object of the establishment of the Debts Recovery of Tribunals is to provide expeditious adjudication and recovery of debts due to the banks and financial institu-tions.

14. For the foregoing reasons, we are not inclined to interfere; the writ petition is dismissed and order dated 28th May, 1999 is vacated. However, if the petitioners would choose to file an appeal to the appellate authori-ty under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 time spent in pursuing the above writ petition would be liable to be excluded from the prescribed period of limitation. Needless to add that any observation made by us will not prejudice the parties case on merits. No order as to costs.