The High Court · 2025

Counsel for the Appellant: SRI R RAJENDRA PRASAD Counsel for the Respondents: SRI.E V V S RAVI KUMAR The Court made the following: JUDGMENT '( l a, THE T]ION'BLE JUSTICE MOUSHUMI BHATTACHARYA AND THE HON'BLE JUSTICE GADI PRAVEEN KUMAR C.M.A. No.678 of 2010 JUDGMENIT: Qter Hon'ble Justice Gadi Praveen Kuntur) The above c.M.A. is filed being aggrieved by the orders passed in

1.A.No.277 of 2008 in I.A.No.3130 of 2007 in O.P.No.t833 of 2006 dated

30.01.2010 passed by the learned iI Additional Chief Judge, City Civil Courls. Hyclerabad in dismissing the I.A. observing that the dismissal order dated 17.01.2008 cannot be recalled and set aside and I.A.No.3 130 of 2OO7 cannot be sr:t aside.

2. The facts ieading to the filing of the abbve CMA are that the appellant lt.P. State Financiai Corporation is an Institution constituted under the fitate Financial Corporation Act, 1951 (for short'the Act') and carrying otr its business avocation in the field of financing Medium and Small Sca.le Industries, whereas respondent Nos.l to 5, who are Promoters/Directors of IWs. Kabs Fabrics Pvt. Limited, have executed the personal gtrarantee for the loan availed by the Company for their business purpose

3. it ir; contended by the appellant that respondent Nos.l to 5 approache,J the appellant Comoration for establishing their Company \ 2 ! under the name and style IWs. Kabs Fabrics Pvt. Ltd. for the purpose of manufacturing Terri Towels for export use at Jukal village, Shamshabad Mandal, Ranga Reddy District. Upon such request made by the respondents, the appellant Corporation considered and sanctioned a term loan for Rs.43,00,000/- on 06.04. 1992 and the said loan was primarily secured by equitable mortgage of land, buildings and hypothecation of plant and machinery as-well as personal guarantee of respondents' As per the guarantee agreement dated 19.01 .1993, respondent Nos'l to 5 have deposited title deeds in favour of the appeliant Corporation and the 2nd respondent also executed solvency certificate to that effect.

4. The appellant Corporation further submits that the respondents after availing the loan facilities, defaulted in repayment of the loan and failed to adhere to the terms and conciitions of the repayment. Therefore, by virtue of the powers conferred under Section 29 of the Act, the appellant Corporation issued a notice to the respondents calling upon them to regularize the loan account, in default, the Unit shall be seized' When the Company failed to respond to the notice, the said Company was seized on

10.11 .lgg5. Accordingly, the primary security was offered for sale by releasing advertisement in newspaper. The machinery was sold for Rs.9,00,000/- in February, 1997 while land and buildings were sold for \ \ I I I t.. I I : I ,l I I ,l-.\ i{i J Rs.13,08,500/- on 28.03.2005. After apportioning the sale consideration, an amounl. ol'Rs. 2,55,08,467/- still remains outstanding as on 31.03.2006. -5. 'fhe appellant contended that upon the default, it had invoked proceedings under Section 31(1) (aa) of the Act against the respondents, being the guarantors are personally liable to discharge the amount which is due. Tirer:fore, for recovery of the same, it had filed O.P.No.1833 of 2006 before the learned Trial Court.

6. The appellant further contends that vide orders dated 09.07 .2007 , the said O.P. came to be dismissed for default. Upon dismissal of the O.P. on

09.07.2AA7" the appellant Corporation filed I.A.No.3130 of 2007 under Order IX Rule IX CPC to recall the dismissal order passed in O.P.No.1833 of 2006. Ttre learned Trial Court directed the appellant to serve notices on respondents, and since, notices were returned unserved, the leamed Trial Court ordered the Officer of the appellant Corporation to be present on

17.01.2008 and the said fact was informed through their Advocate vide letter daterl 02.01.2008, that on 17.01.2008, when I.A.No.3l30 of 2007 was callecl, as there was no representation on behalf of the appellant Corporatic'n, thereby the leamed Trial Court dismissed I.A.No.3l30 of 2007 for default. \ !, !' i ,t i I 4 -\ f\,

7. Aggrieved by the same, the appellant herein filed I.A.No.277 of 2008 seeking recall of the order dated 17.01.2008 passed in I.A.No.3l30 of

8. Before the learned Trial Court under proceedings in I.A.No.277 of 2008, learned counsel for the appellant contended that the leamed Trial Court directed to serve notices on respondents in I.A.No.3130 of 2007 and since notices were retumed unserved, directed the Officer of the appellant Corporation to be presented on 17.01.2008. the Advocate informed the same by his letter dated 02.01.2008 by intimating the date of hearing as

18.01.2008. On 17.01.2008, when the matter was called, since there was no representation on behalf of appellant Corporation, the said I.A. came to be dismissed. Therefore, he contended that it was only for the aforesaid said reason, there was no representation on behalf of the appellant Corporation on the said date, and prayed to recall the order dated 17 .01.2008 passed in I.A.No.3 130 of 2A07 .

9. On the other hand, respondent Nos.l to 3 and 5 resisted I.A.No.277 of 2008 by filing counter-affidavit denying the reasons stated in the affidavit which is enclosed to I.A.No.277 of 2008. It is further contended that the appellant is not diligent in prosecuting the case and also failed to / / /-\ r.) ) show the genuine reason for their absence on the said date and as such, the learned Trial Court has rightly dismissed the I.A.No.3130 of 2007 and thus, corrtend,:d that the said petition is liable to be disrnissed. i0. The learned Trial Court upon hearing both counsel, framed the fol I owin-e poi nt for consideration: "lf'hether the dismissal order dated 17.01.2008 passed tn I.A.No.3l30 oJ' 2007 cun be set aside and the said I.A. can be restored tofile? "

11. A perusal oi the record discloses that in I.A.No.3130 of 2007, the learned Triai Court directed the Officer of the appellant Corporation to be present on I 7.01.2008, the said fact was also informed through counsel vide letter rlated 02.01.2008, but the date of hearing was informed as '18.01.2008'. Curiously, the said letter dateci 02.01.2008 addressed to the appellant Corporation was not produced before the leamed Trial Court nor the same is 'rrarked as document.

12. On the other hand, the findings of the learned Trial Court that the appellant Corporation failed to prove that by letter dated 02.01.2008 their counsel wrongly informed the direction of the learned Trial Court regarding the date of appearance of the Officer of the appellant Corporation as 18.01.2008 instead of 17.01.2008, as no such letter dated 6 C) r\.

02.01.2008 is produced before it, the reasons stated in the affidavit filed on behalf of the appellant Corporation cannot be said to be believed

13. Having considered the material placed on record as well as upon hearing the learned counsel, the learned Trial Court rightly came to the conclusion that no sufficient cause has been shown by the Corporation for its absence before it on 17.01.2008, and therefore, the dismissal order dated 17.01.2008 cannot be recalled anci set aside i4. During the course of hearing, even this Cour-t repeatedly asked leamed counsel for the appellant to produce the letter dated 02.01.2008, but the Appellant Corporation failed to produce the same. Therefore, the appellant Cor-ooration is not vigilant in pursuingiprosecuting the case

15. It is well settled that law is not a refuge for the negiigent. The rights carry responsibilities, foremost ainong ihem being the duty to asseft them with due diligence. Tlierefore, the law stands as a vigilant guardian of those who guard themselves, but denies protection to those who sleep over their entitlements.

16. Therefore, we are of the considered view that the order passed by the learned Trial Court in I.A.No.277 of 2008 in I.A.No.3130 of 2007 in / / j I I I I l ,i I I I I I ; i ,i :i !i I I I l I : ,l t: i i ! I I I I I i i ,i (- 7 O.P.No.1833 of 2006 dated 30.01.2010 does not suffer from any infirmity or call for any interference by this Court.

11. Accor,iingly, C.M.A.No.678 of 2010 is dismissed. [nterim orders, if any, shall stand vacated. All connected applications shall stand closed. There shali t,e no order as to costs. SD/- P.CH.NAGABHUSHAMBA DEPUTY REGISTRAR //TRUE COPY/ TION OFFICER To,

1. The ll Additional Chief Judge, City Civil Court, Hyderabad 2. One OC to Sri R Rajendra Prasad, Advocate [OPUC] 3. One OC to Sri E.V.V.S.KUMAR, Advocate [OPUC] 4. Two OD Copies M ABK/PSL i i t; i I i I I i I i ! I HIGH COURT DATED: 17109'12025 JUDGMENT CMA.No.678 of 2010 DISMISSINT3 THE CMA 1 7L \ b 'tHE $ia o o 2t * I r-,'i ,- ... - --z / 6 i,' i: .