{"id":228959,"date":"2008-01-08T00:00:00","date_gmt":"2008-01-07T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/sunil-poddar-ors-vs-union-bank-of-india-on-8-january-2008"},"modified":"2017-03-18T18:02:04","modified_gmt":"2017-03-18T12:32:04","slug":"sunil-poddar-ors-vs-union-bank-of-india-on-8-january-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/sunil-poddar-ors-vs-union-bank-of-india-on-8-january-2008","title":{"rendered":"Sunil Poddar & Ors vs Union Bank Of India on 8 January, 2008"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Sunil Poddar & Ors vs Union Bank Of India on 8 January, 2008<\/div>\n
Author: C Thakker<\/div>\n
Bench: C.K. Thakker, Altamas Kabir<\/div>\n
           CASE NO.:\nAppeal (civil)  86 of 2008\n\nPETITIONER:\nSUNIL PODDAR & Ors.\n\nRESPONDENT:\nUNION BANK OF INDIA\n\nDATE OF JUDGMENT: 08\/01\/2008\n\nBENCH:\nC.K. THAKKER & ALTAMAS KABIR\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T
\n(Arising out of SLP (c) No. 3935 of 2006)<\/p>\n
C.K. Thakker, J.\n<\/p>\n
1.\tLeave granted.\n<\/p>\n
2.     The present appeal is directed against
\nthe order dated November 23, 2005 passed by
\nthe High Court of Judicature at Allahabad in
\nCivil Miscellaneous Writ Petition No. 67297 of
\n2005.  By the said order, the High Court
\ndismissed the writ petition filed by the
\nappellant-writ petitioners and confirmed the
\norder of Debt Recovery Appellate Tribunal,
\nAllahabad dated September 13, 2005 which in
\nturn affirmed the order passed by the Debt
\nRecovery Tribunal, Jabalpur on December 20,
\n2001.\n<\/p>\n
3.\t\tTo appreciate the controversy raised
\nin the present appeal, few relevant facts may
\nbe stated.  It is the case of the appellant
\nthat Adhunik Detergent Ltd. (Defendant No. 1 <\/span>
\nin Suit No. 44A of 1993 instituted by
\nrespondent-Union Bank of India) was
\nincorporated as Company under the Indian
\nCompanies Act, 1956.  There was another
\nCompany also known as Adhunik Synthetics Ltd.
\nwhich was floated by the Directors of Adhunik
\nDetergent Ltd.  According to the appellants,
\ninitially, Adhunik Detergent Ltd. had
\nseven Directors, namely, (1) Satyanarayan
\nJalan,  (2) Krishna Jalan, (3) Chakrapani
\nJalan, (4) K.K. Jalan, (5)Sunil Poddar, (6)
\nSushil Kumar Kanodia and (7) Radhey Shyam
\nPoddar.  Adhunik Detergent Ltd. had taken loan
\nfrom the respondent-Bank. The appellants
\nherein as Directors of Adhunik Detergent Ltd.
\nat the relevant time became guarantors for
\nrepayment of loan and executed certain
\ndocuments in favour of the respondent-Bank. It
\nis the say of the appellants that there was
\ndivision of business among the Directors of
\nAdhunik Detergent Ltd. and Adhunik Synthetics
\nLtd. Consequent upon the division, the
\nappellants herein, who were Directors 5, 6 and
\n7 had resigned as Directors from Adhunik
\nDetergent Ltd. on August 18, 1989 and they got
\nexclusive control over Adhunik Synthetics Ltd.
\nFrom that date onwards, the appellants no more
\nremained as Directors of Adhunik Detergent
\nLtd.\n<\/p>\n
4.\t\tIt was alleged by the respondent-Bank
\nthat since Adhunik Detergent Ltd. did not repay
\nthe loan amount, a civil suit came to be filed
\nby the Bank in the Court of District Judge,
\nRaipur, Madhya Pradesh for recovery of Rs.
\n1,07,17,177.60 p. In the said suit, over and
\nabove the Company, all the Directors were also
\njoined as defendants.  A prayer was made in the
\nplaint to hold all the defendants jointly and
\nseverely liable to pay the amount claimed by
\nthe plaintiff-Bank along with interest, costs
\nand other expenses.  Summonses were issued by
\nthe Court and the defendants appeared.  So far
\nas the present appellants are concerned, they
\nwere not served with the summonses but when
\nthey came to know about the filing of the suit,
\nthey appeared and filed written statement on
\nMarch 9, 1995 contending inter alia that they
\nhad resigned from the Directorship of the
\nCompany (Adhunik Detergent Ltd.) with effect
\nfrom August 18, 1989 and the Bank was intimated
\nabout such resignation.  It was, therefore,
\ncontended that they were not responsible for
\nrepayment of loan amount and suit against them
\nwas not maintainable. The appellants,
\ntherefore, prayed that they may be deleted from
\nthe array of parties. On March 14, 1995, the
\nappellants also filed an application by raising
\npreliminary objection as to maintainability of
\ncivil suit against them.  It was stated in the
\nsaid application that preliminary objections
\nwere raised in the written statement by the
\nappellants (defendant Nos. 7, 8 and 9) that no
\nsuit against them would lie. It was stated that
\nthe preliminary objection raised by them was
\nfundamental in nature and went to very root of
\nthe jurisdiction of the Court.  It was,
\ntherefore, prayed that an issue as to
\nmaintainability of suit against defendant Nos.
\n7 to 9 be framed and decided as preliminary
\nissue before trying the suit on merits.
\nAnother application was also made in November,
\n1995 raising a similar objection contending
\nthat the suit was not instituted in accordance
\nwith law.  The plaint which was filed was not
\nsigned by a person authorized to do so and on
\nthat count also, the suit was not tenable.  It
\nwas further stated that suit against defendant
\nNos. 7 to 9 was not maintainable.  A prayer was
\nmade to frame two issues under Order XIV, Rule
\n1 of the Code of Civil Procedure, 1908 (Code
\nfor short) as preliminary issues and to decide
\nthem as such.\n<\/p>\n
5.\t\tIt may, however, be stated that during
\nthe pendency of the suit before the Civil
\nCourt, the Recovery of Debts Due to Banks and
\nFinancial Institutions Act, 1993 (hereinafter
\nreferred to as the Act) came into force and
\nin 1998 the suit filed by the respondent-Bank
\ncame to be transferred to the Debt Recovery
\nTribunal, Jabalpur (DRT for short). The
\nappellants had no knowledge about the transfer
\nof the suit to DRT nor summonses were issued
\nby DRT to the appellants at the new address.
\nIn the circumstances, nobody appeared before
\nthe DRT and the DRT vide its ex parte judgment
\nand order dated December 15, 2000 decreed the
\nsuit filed by the plaintiff-Bank holding that
\nthe Bank was entitled to recover 1,07,17,177\/-
\nwith interest and cost from the defendant Nos.
\n1-9 jointly and severely.  The defendants were
\nalso restrained from transferring, alienating
\nor otherwise dealing with or disposing off the
\nhypothecated\/mortgaged properties without the
\nprior permission of DRT.\n<\/p>\n
6.\t\tIt is asserted by the appellants that
\nthey were not aware of the proceedings before
\nthe DRT and no summonses were served upon
\nthem.  In the circumstances, they could not
\nremain present before the DRT.  It was on
\nDecember 16, 2000 when Mr. G. Karmakar, who
\nwas working for the appellants, happened to
\nvisit the office of M.P. Audyogik Vikas Nigam
\nLtd. at Bhopal for some official work that the
\nofficials of the Nigam informed him that a
\nsuit pending in the Civil Court, Raipur was
\ntransferred to DRT, Jabalpur and an ex-parte
\ndecree had been passed against the appellants.
\nImmediately on December 18, 2000, Mr. Karmakar
\nwent to DRT, Jabalpur for getting requisite
\ninformation and came to know that notice was
\nsent to the appellants at the old address
\nthough new address was available.  An
\nadvertisement was also published in a Hindi
\ndaily.  He also came to know that since nobody
\nappeared on behalf of the appellants, ex-parte
\ndecree had been passed.  In the circumstances,
\nthe appellants herein made an application
\nunder Section 22(2)(g) of the Act on January
\n10, 2001 for setting aside an ex-parte order
\npassed by the DRT.  The DRT, however, on
\nDecember 20, 2001 dismissed the application.
\nThe appellants appealed against the order
\npassed by the DRT, but the Debt Recovery
\nAppellate Tribunal, Allahabad (DRAT for
\nshort) also dismissed the appeal.  A writ
\npetition filed against the order of DRAT also
\nmet with the same fate.  The High Court
\ndismissed the writ petition.  All these orders
\nhave been challenged by the appellants in the
\npresent appeal.\n<\/p>\n
7.\t\tNotice was issued by this Court on
\nMarch 6, 2006. After hearing the parties,
\nexecution proceedings were stayed and the
\nmatter was ordered to be posted for final
\nhearing.  That is how the matter has been
\nplaced before us.\n<\/p>\n
8.\t\tWe have heard the learned counsel for
\nthe parties.\n<\/p>\n
9.\t\tThe learned counsel for the appellants
\ncontended that DRT committed grave error of
\nlaw and jurisdiction in proceeding with the
\napplication and deciding it on merits ex-parte
\nin absence of the appellants.  It was
\nsubmitted that no summonses were served upon
\nthe appellants and thus no opportunity of
\nhearing was afforded to them before passing
\nthe impugned order which is liable to be set
\naside.  The DRT in the circumstances, ought to
\nhave allowed the application for setting aside
\nex-parte order.  By not doing so, the DRT had
\ncommitted grave error and the said order
\ndeserves to be quashed. It was also submitted
\nthat appellants were not informed about the
\ntransfer of case from Civil Court to DRT and
\nno summonses were served upon them.  According
\nto the appellants, they had changed their
\naddress and new address was available with the
\nBank.  In spite of that, with mala fide
\nintention and oblique motive, summonses were
\nsought to be served upon appellants at an old
\naddress but the appellants were not served
\nbecause of change of address.  Summonses were
\nthen published in a Hindi newspaper which had
\nno wide circulation.  That action was also
\ntaken with a view to deprive the appellants
\nfrom knowing about the proceedings before the
\nDRT so that they may not be able to appear and
\ndefend themselves and the Bank would be able
\nto obtain ex parte order. The appellants had
\nled the evidence in support of their say that
\nthey were not in Mumbai at the relevant time
\nand they were not subscribers of Hindi
\nnewspaper Navbharat Times. They had produced
\nnecessary particulars and yet the DRT failed
\nto consider the said evidence in its proper
\nperspective and dismissed the application
\nobserving that the appellants must be deemed
\nto be aware of the proceedings. According to
\nthe DRT, the appellants appeared in Civil
\nCourt, filed written statement but all those
\nfacts were suppressed by them while filing the
\napplication before the DRT for setting aside
\nex parte order.  The same mistake has been
\nrepeated by the Appellate Tribunal as also by
\nthe High Court. It was submitted that all
\nthose facts were not relevant in the present
\nproceedings. On all these grounds, the orders
\nare liable to set aside by directing the Debt
\nRecovery Tribunal, Jabalpur to consider the
\nmatter afresh and to decide it in accordance
\nwith law.\n<\/p>\n
10. \t\tThe learned counsel for the
\nrespondent-Bank, on the other hand, supported
\nthe order passed by the DRT, confirmed by the
\nDRAT as well as by the High Court. An
\naffidavit-in-reply is filed by Senior Manager
\n(Law) of the respondent-Bank, wherein it was
\nsubmitted that the appellants were aware of
\nthe proceedings initiated by the Bank against
\nthem.  In civil suit, the appellants were
\njoined as defendant Nos. 7-9.  They appeared
\nbefore the Court through an advocate and filed
\nwritten statement in March, 1995.  They also
\nraised preliminary objections by filing
\napplications, requesting the Court to treat
\nthe issues as to maintainability of suit and
\nliability of the appellants as preliminary
\nissues.  It was, therefore, clear that they
\nwere served with the summonses and were in
\nknow of the proceedings.  It was thereafter
\ntheir duty to take care of their interest,
\nwhen the suit was transferred to DRT,
\nJabalpur. It was further stated that summonses
\nwere issued to the appellants at the addresses
\nat which they were earlier served.  In fact,
\naccording to the respondent-Bank, it was the
\nsame address which was given by the appellants
\nthemselves before both the Tribunals and
\nbefore the High Court. But with a view to
\ndeprive the Bank of the legitimate dues and to
\ndelay the proceedings initiated against them,
\nthey did not appear before the DRT. Though it
\nwas not necessary for the Bank to serve the
\nappellants once again, they made a prayer to
\nthe Bank to get the summonses published in a
\nnewspaper which was done and in Navbharat
\nTimes, Bombay as well as Navbharat Times,
\nRaipur summonses were published.  Navbharat
\nTimes is having very wide circulation at both
\nthe places, i.e. Bombay as well as at Raipur.
\nIt was, therefore, not open to the appellants
\nto contend that they were not subscribing
\nand\/or reading a Hindi newspaper by producing
\na bill from a newspaper agent.  Such a bill
\ncan be obtained from any vendor.  No reliance
\ncan be placed on such evidence.  Moreover, an
\nextremely important fact which weighed with
\nboth the Tribunals as well as with the High
\nCourt was that in an application under Section
\n22(2)(g) of the Act for setting aside ex parte
\norder passed by DRT, the appellants have
\nsuppressed material and extremely important
\nfact that they had appeared before the Civil
\nCourt and had filed written statement.  The
\napplication proceeded on the footing as if the
\nappellants were never aware of any proceedings
\ninitiated against them by the plaintiff-Bank.
\nThe DRT was, therefore, wholly right in
\ndismissing the application and the said order
\nwas correctly confirmed by the DRAT and by the
\nHigh Court.  No case can be said to have been
\nmade out by the appellants to interfere with
\nthose orders and the appeal deserves to be
\ndismissed.\n<\/p>\n
11.\t\tHaving heard the learned counsel for
\nthe parties, in our opinion, the appellants
\nhave not made out any ground on the basis of
\nwhich the order passed by the DRT, confirmed
\nby the DRAT and by the High Court can be set
\naside. From the record, it is clearly
\nestablished that the suit was instituted by
\nthe plaintiff-Bank as early as in August,
\n1993.  The appellants who were defendant Nos.
\n7 to 9 were aware of the proceedings before
\nthe Civil Court.  They appeared before the
\nCourt, engaged an advocate and filed a written
\nstatement.  They raised preliminary objections
\nas also objections on merits.  They filed
\napplications requesting the Court to raise
\ncertain issues and try them as preliminary
\nissues.  It was, therefore, obligatory on
\ntheir part to appear before the DRT, Jabalpur
\nwhen the matter was transferred under the Act.
\nThe appellants, however, failed to do so.  We
\nare not impressed by the argument of the
\nlearned counsel for the appellants that they
\nwere not aware of the proceedings before the
\nDRT and summonses could not be said to have
\nbeen duly served.  As is clear, summonses were
\nissued earlier and on the same address,
\nsummonses were sought to be served again after
\nthe case was transferred to DRT. There is
\nsubstance in the submission of the learned
\ncounsel for the respondent-Bank that the
\nappellants had avoided service of summons as
\nthey wanted to delay the proceedings.  We are
\nalso inclined to uphold the argument of
\nlearned counsel for the Bank that in view of
\nthe fact that the appellants were appearing
\nbefore the Civil Court, it was not necessary
\nfor the Bank to get summonses published in a
\nnewspaper after the matter was transferred in
\naccordance with law to the DRT, Jabalpur. But
\neven that step was taken by the respondent-
\nBank.  In Navbharat Times, a Hindi newspaper
\nhaving wide circulation in Bombay and Raipur,
\nsummonses were published.  It cannot be argued
\nsuccessfully that the appellants were not the
\nsubscribers of the said newspaper and were not
\nreading Navbharat Times Hindi Edition. But
\neven otherwise, such contention is wholly
\nirrelevant. As to bills said to have been
\nproduced from the newspaper agent, to us, both
\nthe Tribunals were right in observing that
\nsuch a bill can be obtained at any time and no
\nimplicit reliance can be placed on that
\nevidence. It is immaterial whether appellants
\nwere subscribers of the said newspaper and
\nwhether they were reading it. Once a summons
\nis published in a newspaper having wide
\ncirculation in the locality, it does not lie
\nin the mouth of the person sought to be served
\nthat he was not aware of such publication as
\nhe was not reading the said newspaper.  That
\nground also, therefore, does not impress us
\nand was rightly rejected by the Tribunals.\n<\/p>\n
12.\t\tWhile dealing with the contention
\nraised by the appellants, the DRT observed;
\nWhen summons are published in
\nnewspaper, the Court has to be
\ncautious that it is published in a
\nnewspaper, circulated and widely read
\nin an area where the defendant stays.
\nNavbharat Times is a national
\nnewspaper read not only in Mumbai but
\nalso elsewhere in this country. The
\nsummons were published also in a
\nnewspaper circulated in Raipur from
\nwhere the loan was disbursed. As
\nstated in the main order, the Court is
\nsatisfied that summons were properly
\npublished and summons has been
\nproperly served.\n<\/p>\n
13.\t\tBut the fundamental objection which
\nhad been raised by the respondent-Bank and
\nupheld by the Tribunals is legally well-
\nfounded.  In the application filed by the
\nappellants before the DRT, Jabalpur under
\nSection 22(2)(g) of the Act, there is no
\nmurmur that the applicants were defendants in
\nthe suit instituted in Civil Court; they were
\nserved and they appeared through an advocate
\nand also filed a written statement and other
\napplications requesting the Court to try
\ncertain issues as preliminary issues.  It was
\nexpected of the appellants to disclose all
\nthose facts. Apart from suppression of fact as
\nto service of summons and appearance of
\ndefendants before the Court, even on legal
\nground, it was not obligatory that the
\nappellants should have been served once again.\n<\/p>\n
14.\t\tIn this connection, we may refer to
\nthe provisions of Section 22 of the Act which
\nlays down procedure to be followed by the
\nTribunals. The relevant part of the said
\nsection reads thus;\n<\/p>\n
22.  Procedure   and  powers of the
\nTribunal  and  the  Appellate
\nTribunal.(1) The Tribunal and  the
\nAppellate Tribunal shall  not  be
\nbound by the procedure laid down by
\nthe Code of Civil Procedure,  1908  (5
\nof 1908),  but shall be guided by the
\nprinciples of natural justice  and,
\nsubject to the other provisions of
\nthis Act and of any rules, the
\nTribunal and the Appellate Tribunal
\nshall have powers to regulate their
\nown  procedure  including the places
\nat which they  shall  have  their
\nsittings.\n<\/p>\n
(2) The Tribunal and the Appellate
\nTribunal shall have, for the  purposes
\nof  discharging  their functions under
\nthis  Act,  the  same  powers  as are
\nvested  in a civil court  under the
\nCode of  Civil  Procedure, 1908 (5 of
\n1908), while trying a suit, in respect
\nof  the  following matters, namely:-\n<\/p>\n
(a)\tsummoning  and enforcing the
\nattendance of  any  person
\nand examining him on oath;\n<\/p>\n
(b)\trequiring the discovery and
\nproduction of documents;\n<\/p>\n
(c)\treceiving evidence on affidavits;\n<\/p>\n
(d)\tissuing commissions for the
\nexamination of witnesses or
\ndocuments;\n<\/p>\n
(e)\treviewing its decisions;\n<\/p>\n
(f)\tdismissing an application for
\ndefault or deciding it ex parte;\n<\/p>\n
(g)\t setting aside any order of dismissal
\nof any application for default or any
\norder passed by it ex parte;\n<\/p>\n
(h)\t <\/p>\n
15.  \t\tBare reading of the above
\nprovision makes it clear that the DRT and the
\nDRAT have, for the purpose of discharging
\ntheir functions under the Act, the same powers
\nas are vested in Civil Court under the Code of
\nCivil Procedure, 1908.  Clause (g) of sub-
\nsection (2) of Section 22, therefore, has to
\nbe read with Rule 13 of Order IX of the Code
\nwhich provides for setting aside ex parte
\ndecree passed against a defendant.  Rule 13 of
\nOrder IX as originally enacted in the Code of
\n1908 read thus;\n<\/p>\n
13. Setting aside decree ex parte
\nagainst defendant.In any case in
\nwhich a decree is passed ex parte
\nagainst a defendant, he may apply to
\nthe Court by which the decree was
\npassed for an order to set it aside;
\nand if he satisfies the Court that the
\nsummons was not duly served, or that
\nhe was prevented by any sufficient
\ncause from appearing when the suit was
\ncalled on for hearing, the Court shall
\nmake an order setting aside the decree
\nas against him upon such terms as to
\ncosts, payment into Court or otherwise
\nas it thinks fit, and shall appoint a
\nday for proceeding with the suit:\n<\/p>\n
Provided that where the decree is of
\nsuch a nature that it cannot be set
\naside as against such defendant only
\nit may be set aside as against all or
\nany of the other defendants also.\n<\/p>\n
16.\t\tOriginal Rule 13 of Order IX of the
\nCode thus provided that when a decree had been
\npassed ex parte against the defendant who
\nsatisfied the Court that summons was not duly
\nserved upon him, the Court was bound to set
\naside the decree.  It was immaterial whether
\nthe defendant had knowledge about the pendency
\nof suit or whether he was aware as to the date
\nof hearing and yet did not appear before the
\nCourt. The Law Commission considered that
\naspect and the expression duly served. In
\nits Twenty-seventh Report, the Commission
\nstated;\n<\/p>\n
1. Under Order IX, rule 13, if the
\ncourt is satisfied either that the
\nsummons has not been served, or that
\nthe defendant was prevented by
\nsufficient cause from appearing, etc.,
\nthe ex parte decree should be set
\naside. The two branches of the rule
\nare distinctive and the defendant,
\nwhatever his position may be in
\nrespect of one branch, is the court
\nthat he has made good his contention
\nin respect of the other branch.\n<\/p>\n
2. Now, cases may arise where there
\nhas been a technical breach of the
\nrequirements of due service, though
\nthe defendant was aware of the
\ninstitution of the suit. It may well
\nbe, that the defendant had knowledge
\nof the suit in due time before the
\ndate fixed for hearing, and yet,
\napparently he would succeed if there
\nis a technical flaw. This situation
\ncan arise e.g., where the
\nacknowledgement on the duplicate of
\nthe summons has not been signed. There
\nmay be small defects in relation to
\naffixation, etc., under Order V, rule\n<\/p>\n
15. At present, the requirements of
\nthe rules regarding service must be
\nstrictly complied with, and actual
\nknowledge (of the defendant) is
\nimmaterial. (There are not many
\ndecisions which hold that even where
\nthere has not been due service, yet
\nthe decree can be maintained, if the
\ndefendant knew the date of hearing.)<\/p>\n
3. Where a literal conformity with the
\nC.P.C. is wanting, the second part of
\ncolumn third of article 164, Indian
\nLimitation Act, 1908 (now article 123,
\nLimitation Act, 1963) applies. As to
\nsubstituted service, see discussion in
\nunder-mentioned decision.\n<\/p>\n
4. The matter was considered
\nexhaustively by the Civil Justice
\nCommittee, which recommended a
\nprovision that a decree should not be
\nset aside for mere irregularity. Local
\nAmendments made by several High Courts
\n(including Allahabad, Kerala, Madhya
\nPradesh, Madras and Orissa) have made
\na provision on the subject, though
\nthere are slight variations in the
\nlanguage adopted by each. Such a
\nprovision appears to be useful one,
\nand has been adopted on the lines of
\nthe Madras Amendment.\n<\/p>\n
17.\t\tThe Commission again considered the
\nquestion and in its Fifty-fourth Report,
\nreiterated;\n<\/p>\n
9.12. Under Order 9, rule 13, if the
\ncourt is satisfied either that the
\nsummons has not been served, or that
\nthe defendant was prevented by
\nsufficient cause from appearing, etc.,
\nthe ex parte decree should be set
\naside. The two branches of the rule
\nare distinctive, and the defendant,
\nwhatever his position may be in
\nrespect of one branch, is entitled to
\nbenefit of the other branch, if he
\nsatisfies the court that he has made
\ngood his contention in respect of the
\nother branch.\n<\/p>\n
9.13. In the earlier Report, several
\npoints were considered with reference
\nto this rule, and amendments suggested
\non one point,-the broad object being
\nto ensure that a decree shall not be
\nset aside merely on the ground of
\nirregularity in service, if the
\ndefendant had knowledge of the decree.
\nAfter consideration of the points
\ndiscussed in the earlier Report, we
\nhave reached the same conclusion.\n<\/p>\n
18.\t\tAccepting the recommendations of the
\nLaw Commission, the rule was amended by the
\nCode of Civil Procedure (Amendment) Act, 1976.
\nRule 13 of Order IX with effect from February
\n1, 1977 now reads thus;\n<\/p>\n
13. Setting aside decree ex parte
\nagainst defendantIn any case in which
\na decree is passed ex parte against a
\ndefendant, he may apply to the Court
\nby which the decree was passed for an
\norder to set it aside; and if he
\nsatisfies the Court that the summons
\nwas not duly served, or that he was
\nprevented by any sufficient cause from
\nappearing when the suit was called on
\nfor hearing, the Court shall make an
\norder setting aside the decree as
\nagainst him upon such terms as to
\ncosts, payment into Court or otherwise
\nas it thinks fit, and shall appoint a
\nday for proceeding with the suit;\n<\/p>\n
Provided that where the decree is of
\nsuch a nature that it cannot be set
\naside as against such defendant only
\nit may be set aside as against all or
\nany of the other defendants also:\n<\/p>\n
Provided further that no Court shall
\nset aside a decree passed ex parte
\nmerely on the ground that there has
\nbeen an irregularity in the service of
\nsummons, if it is satisfied that the
\ndefendant had notice of the date of
\nhearing and had sufficient time to
\nappear and answer the plaintiffs
\nclaim.\n<\/p>\n
Explanation.-Where there has been an
\nappeal against a decree passed ex-
\nparte under this rule, and the appeal
\nhas been disposed of on any ground
\nother than the ground that the
\nappellant has withdrawn the appeal, no
\napplication shall lie under this rule
\nfor setting aside that ex parte
\ndecree.            (emphasis supplied)\t<\/p>\n
19.\t\tIt is, therefore, clear that the legal
\nposition under the amended Code is not whether
\nthe defendant was actually served with the
\nsummons in accordance with the procedure laid
\ndown and in the manner prescribed in Order V
\nof the Code, but whether (i) he had notice of
\nthe date of hearing of the suit; and (ii)
\nwhether he had sufficient time to appear and
\nanswer the claim of the plaintiff. Once these
\ntwo conditions are satisfied, an ex parte
\ndecree cannot be set aside even if it is
\nestablished that there was irregularity in
\nservice of summons. If the Court is convinced
\nthat the defendant had otherwise knowledge of
\nthe proceedings and he could have appeared and
\nanswered the plaintiffs claim, he cannot put
\nforward a ground of non service of summons for
\nsetting aside ex parte decree passed against
\nhim by invoking Rule 13 of Order IX of the
\nCode.  Since the said provision applies to
\nDebt Recovery Tribunals and Appellate
\nTribunals under the Act in view of Section
\n22(2)(g) of the Act, both the Tribunals were
\nright in observing that the ground raised by
\nthe appellants could not be upheld. It is not
\neven contended by the appellants that though
\nthey had knowledge of the proceedings before
\nthe DRT, they had no sufficient time to appear
\nand answer the claim of the plaintiff-bank and
\non that ground, ex parte order deserves to be
\nset aside.\n<\/p>\n
20.\t\tIn our opinion, the Tribunals were
\nalso right in commenting on the conduct of the
\nappellants\/defendants that they were appearing
\nbefore Civil Court through an advocate, had
\nfiled written statement as also applications
\nrequesting the Court to treat and try certain
\nissues as preliminary issues. All those facts
\nwere material facts. It was, therefore,
\nincumbent upon the appellants to disclose such
\nfacts in an application under Section 22(2)(g)
\nof the Act when they requested the DRT to set
\naside ex parte order passed against them.  The
\nappellants deliberately and intentionally
\nconcealed those facts. There was no whisper in
\nthe said application indicating that before
\nthe Civil Court they were present and were
\nalso represented by an advocate.  An
\nimpression was sought to be created by the
\ndefendants\/appellants as if for the first time
\nthey came to know in December, 2000 that an ex
\nparte order had been passed against them and
\nimmediately thereafter they had approached the
\nDRT. The Debt Recovery Tribunal, Jabalpur,
\ntherefore, in our opinion was right in
\ndismissing the said application.  In an appeal
\nagainst the said order, the DRAT observed that
\nthe appellants had willfully suppressed the
\nfact that they were not in the know of the
\nproceedings when the same was proceeding in
\nthe Civil Court. The DRAT correctly stated
\nthat even if it is taken to be true that the
\nappellants did not receive notice from the
\nDRT, it was their duty to make necessary
\ninquiry in the proceedings when the case had
\nbeen transferred to the DRT. The Appellate
\nTribunal rightly concluded;\n<\/p>\n
In the present case, the appellants
\nvery artistically have suppressed the
\nfact of their filing of written
\nstatement in the case while it was
\nproceeding in the Civil Court and were
\nbeing represented by their lawyer till
\nthe date of its transfer to the
\nTribunal at Jabalpur.\n<\/p>\n
21.\t\tThe High Court, in our judgment, was
\nequally right in dismissing the petition
\nconfirming the finding of the DRAT that the
\nappellant had artistically suppressed
\nmaterial fact and no interference was called
\nfor.\n<\/p>\n
22.\t\tFinally, we are exercising
\ndiscretionary and equitable jurisdiction under
\nArticle 136 of the Constitution.  From the
\nfacts and circumstances of the case in their
\nentirety, we do not feel that there is
\nmiscarriage of justice. On the contrary, we
\nare convinced that the appellants had not come
\nforward with clean hands.  They wanted to
\ndelay the proceedings. Though they were aware
\nof the proceedings pending against them, had
\nappeared before the Civil Court, but then did
\nnot care to inquire into the matter. Even
\nafter ex-parte order was passed, in an
\napplication for setting aside the order, they
\nhad not candidly disclosed all the facts that
\nthey were aware of such proceedings and were
\nrepresented by a counsel. In the light of all
\nthese facts and keeping in view the provisions
\nof Section 22 (2)(g) of the Act read with Rule
\n13 of Order IX of the Code, if the Debt
\nRecovery Tribunal dismissed the application
\nand the said order was confirmed by the Debt
\nRecovery Appellate Tribunal and by the High
\nCourt, it cannot be held that those orders
\nwere wrong and ex parte order should be
\nquashed. The prayer of the appellants,
\ntherefore, has no substance and cannot be
\naccepted.\n<\/p>\n
23.\t\tFor the foregoing reasons, the appeal
\ndeserves to be dismissed and is accordingly
\ndismissed with costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Sunil Poddar & Ors vs Union Bank Of India on 8 January, 2008 Author: C Thakker Bench: C.K. Thakker, Altamas Kabir CASE NO.: Appeal (civil) 86 of 2008 PETITIONER: SUNIL PODDAR & Ors. RESPONDENT: UNION BANK OF INDIA DATE OF JUDGMENT: 08\/01\/2008 BENCH: C.K. THAKKER & ALTAMAS KABIR JUDGMENT: J U […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-228959","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nSunil Poddar & Ors vs Union Bank Of India on 8 January, 2008 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/sunil-poddar-ors-vs-union-bank-of-india-on-8-january-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sunil Poddar & Ors vs Union Bank Of India on 8 January, 2008 - 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