M/s.Ravi Enterprises v. M/s.Indian Bank

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 30.01.2008CORAM:THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR.JUSTICE M.VENUGOPALW.P.No.21097 of 2007 1.M/s.Ravi Enterprises, Rep by its Partner, T.S.Ravi No.892, T.H. Road, Thiruvottiyur, Chennai 600 019.2.T.S.Ravi3.Smt.T.S.Sumathy4.Smt.T.S.Sulochana.. PetitionersVs1.M/s.Indian Bank Thiruvottiyuur Branch, T.H. Road, Thiruvottiyur, Chennai 600 019.2.The Chairperson, Debt Recovery Appellate Tribunal, Chennai.3.K.Lakshmi.. RespondentsPrayer: Writ Petition filed under Article 226 of the Constitution of Indiafor issuance of a Writ of Certiorarified Mandamus calling for the recordsof the 2nd respondent pertaining to impugned order dated 10.05.2007 passedin M.A.No.205 of 2006 and M.A.No.206 of 2006 passed by the secondrespondent and quash the same consequently not to confirm the auction heldon 11.10.2006 in DRC.No.103 of 1999 on the file of DRT-I in respect of theschedule mentioned property.For Petitioners : Mr.AR.L.Sundaresan, S.C. For Mr.K.N.NatarajFor RR 1: Mrs.Ritachandrasekaran For Mr.Aiyar & DoliaFor RR 3: Mr.K.Doraisamy, S.C. For Mr.C.K.M.Appaji https://hcservices.ecourts.gov.in/hcservices/ O R D E RThe petitioners have filed the present Writ Petition praying for anissuance of a Writ of Certiorarified Mandamus calling for the records ofthe second respondent viz., the Chairperson, Debt Recovery AppellateTribunal, Chennai in regard to the order dated 10.05.2007 passed inM.A.No.205 of 2006 and M.A.No.206 of 2006 and quash the same andconsequently, not to confirm the auction held on 11.10.2006 in DRT.No.103of 1999 on the file of Debts Recovery Tribunal-I in respect of theschedule mentioned property.2.The writ petitioners are the defendants in O.A.No.1774 of 1998before the Debts Recovery Tribunal, Chennai. The first respondent Bank hasfiled O.A.No.1774 of 1998 against the writ petitioners/defendants forrecovering a sum of Rs.20,71,776/- with interest at 19.89% per annum withquarterly rests from the date of application till the date of realisationwith costs and for sale of the plaint schedule property. The writpetitioners/defendants 1 to 4 were set exparte and an order was passed on08.04.1999 by the Debts Recovery Tribunal, Chennai declaring that thefirst respondent Bank is entitled to the Recovery Certificate against thewrit petitioners/defendants 1 to 4 for a sum of Rs.20,71,776/- till dateof application and with 12% simple interest from the date of applicationtill the date of realisation with costs which includes the advocate feesand a Recovery Certificate was ordered to be issued thereto, with adirection to communicate the copy of the order to all the parties.3.In M.A.Nos.205 and 206 of 2006 filed by the writpetitioners/appellants, a common order was passed on 10.05.2007 by thesecond respondent viz., the Chairperson, Debt Recovery Appellate Tribunaldismissing both the appeals. As a matter of fact, M.A.Nos.205 and 206 of2006 arise out of the common orders passed by the Debts Recovery Tribunal-I, Chennai on 11.10.2006 in M.A.SR.Nos.1274 and 1277 of 2006 to condonethe delay of 1006 days in filing these applications to restore M.A.Nos.338and 339 of 2002. The Debts Recovery Tribunal-I, Chennai has dismissedM.A.SR.Nos.1274 and 1277 of 2006 on 11.10.2006 without costs finding thatthe writ petitioners/petitioners defendants have not properly explainedthe delay of 1006 days.4.The learned counsel for the writ petitioners/ appellants/defendantsurges that the common order of the second respondent viz., Debt RecoveryAppellate Tribunal dated 10.05.2007 passed in M.A.Nos.205 and 206 of 2006in dismissing the appeals is against the well established principles ofnatural justice and that the second respondent viz., Debt RecoveryAppellate Tribunal has not taken into consideration of the fact that theproperty belongs to a senior lady citizen, one of the guarantors and whois ready and willing to settle the matter and that a sum of Rs.10,00,000/-deposited with the first respondent Bank by the writpetitioners/defendants does not find a place in the order passed by thesecond respondent/DRAT on 10.05.2007 and that the facts and circumstances https://hcservices.ecourts.gov.in/hcservices/ leading to the passing of the exparte decree on 08.04.1999 in O.A.No.1774of 1998 have not been taken into consideration by the secondrespondent/DRAT and therefore pray for setting aside the common orderpassed in M.A.Nos.205 & 206 of 2006 dated 10.05.2007 and to allow the writpetition.5.The case of the writ petitioners/appellants/ defendants is thatthey filed I.A.No.949 of 1999 to set aside the exparte order passedagainst defendants 1 and 2 and further that I.A.Nos.1063 and 1064 of 1999were filed to set aside the exparte decree and that the exparte decree waspassed on 08.04.1999 in O.A.No.1774 of 1998 and that when the certificateof recovering Officer Debts Recovery Tribunal-I, dated 14.01.2001 wasserved on the second petitioner to the effect that the property would bebrought to public auction on 26th December 2001 at 3.00 p.m. M.A.Nos.338and 339 of 2002 were filed to condone the delay in filing the petition andto stay the operation, but the said M.A.Nos.338 and 339 of 2002 weredismissed for non-prosecution and only on 09.09.2006 the dismissal ofM.A.Nos.338 and 339 of 2002 came to the knowledge and that the petitionersare ready to settle the matter and that they should be given anopportunity and in the interest of justice the delay of 1006 days infiling the application to restore M.A.NOs.338 and 339 of 2002 are to beallowed.6.It is a specific case of the writ petitioners/appellants/petitioners/defendants that the Debts Recovery Tribunal-I,Chennai and the Debt Recovery Appellate Tribunal, Chennai in their ordersin M.A.SR.Nos.1274 and 1277 of 2006 dated 11.10.2006 and M.A.Nos.205 and206 of 2006 dated 10.05.2007 have not applied the principles of naturaljustice in proper perspective and they ought to have condoned the delay of1006 days in filing the application M.A.SR.Nos.1274 and 1277 of 2006 torestore M.A.Nos.338 and 339 of 2002 and allowed the appeals and since theyhave not taken a liberal view in the matter, this has resulted inmiscarriage of justice.7.The learned counsel for the writ petitioners relied on the Hon'bleSupreme Court decision reported in 2002 (1) CTC 769 (Ram Nath Sao @ RamNath Sahu and others V. Gobardhan Sao & others), whereunder it is observedas follows:"Limitation Act, 1963, Section 5 – Condonation of delay –Sufficient cause – Meaning of – Approach of courts whileconsidering petition to condone delay – Expression "sufficientcause" in connection with delay in filing application to setaside abatement or other similar provision should receiveliberal construction so as to advance justice when nonegligence, inaction or want of bona fide is imputable to party– Whether explanation for delay would constitute sufficientcause will depend upon facts of each case – Courts should notproceed with tendency of finding fault with "cause" shown andreject petition in over jubilation of disposal drive – https://hcservices.ecourts.gov.in/hcservices/ Acceptance of explanation furnished should be rule and andrefusal exception more so when no negligence, inaction or wantof bona fide can be imputed to defaulting party – However courtsshould not lose sight of fact that by not taking steps withinprescribed time valuable right as accrued to other party whichshould not be lightly defeated by condoning delay in a routinemanner – Explanation for delay should not rejected takingpedantic and hyper-technical view or when stakes are high orwhere arguable points of facts and law are involved – Courtshave to strike balance between the effect of order on parties tolis. (para 12)Words and Phrases – "Sufficient Cause" – Meaning of – Expression"sufficient cause" in connection with delay in filingapplication to set aside abatement or other similar provisionshould receive liberal construction so as to advance justicewhen no negligence, inaction or want of bona fide is imputableto party – Whether explanation for delay would constitutesufficient cause will depend upon facts of each case – Courtsshould not proceed with tendency of finding fault with causeshown and reject petition in over jubilation of disposal drive– Acceptance of explanation furnished should be rule and andrefusal exception more so when no negligence, inaction or wantof bona fide can be imputed to defaulting party".8.He also relied on 1998 (7) SCC 123 (N.Balakrishnan V.M.Krishnamurthy), wherein it is observed as follows:"Limitation Act, 1963 – S.5 – Condonation of delay – Discretionof court – How to exercise – Guidelines stated – Words"sufficient cause" should be construed liberally – Acceptabilityof explanation for the delay is the sole criterion, length ofdelay not relevant – In absence of anything showing mala fide ordeliberate delay as a dilatory tactic, court should normallycondone the delay – However, while doing so court should alsokeep in mind the consequent litigation expenses to be incurred bythe opposite party and should compensate him accordingly – Wherea court condones delay in positive exercise of discretion,superior court and more particularly the revisional court shouldnot normally disturb the same – But where request for condonationof delay is refused, it would be open to the superior court tocome to its own finding on the basis of explanation for the delaygiven by the party – Delay on the part of defendant-appellant of883 days in approaching the court against dismissal of hisapplication to set aside ex parte decree passed against him –Non-action on the part of his advocate explained as cause for thedelay – Appellant also complaining about conduct of the advocatebefore Consumer Forum and getting Rs.50,000/- as compensation –Appellant's explanation for the delay accepted and delay condonedby trial court- But in revision High Court setting aside theorder of trial court on ground that appellant was negligent andwas not careful enough to meet the advocate to verify the stage https://hcservices.ecourts.gov.in/hcservices/ of the proceedings for a long time – Held, High Court in revisionerred in interfering with the exercise of jurisdiction by trialcourt in condoning the delay when appellant's conduct did not asa whole warrant castigating him as an irresponsible litiganthaving regard to present busy and preoccupied life.Limitation Act, 1963 – Object of fixing time-limit – Notmeant to destroy rights – It is founded on public policy fixing alife span for the legal remedy for the general welfare".9.Yet another decision AIR 1998 SC 258 (Malkiat singh and another V.Joginder Singh and others) was relied on the side of writ petitionerswherein it is held as follows:"Civil P.C. (5 of 1908), O.9 R.13 – Exparte decree – Settingaside of – Defendants engaging counsel to defend suit filedagainst them – Suit proceeded ex parte and ex parte decree passedon counsel reporting no instructions – Neither counsel reportingthis fact to defendants nor Court issued notice to them –Defendants getting knowledge of exparte decree only when theyapproached the counsel – Application to set aside decree filed bydefendants within 4 days of knowledge – Defendants cannot be saidto be careless/negligent – Ex parte decree liable to be setaside".10.It is to be noted that the third respondent was the successfulbidder in public auction for a sum of Rs.29,10,000/- and that the salecertificate was issued in her favour on 13.03.2007.11.In (2005) 4 SCC 480 at 483 (Kailash V. Nanhku and others), it isobserved that "a provision relating to participation of a party in anyproceedings, in an adversarial system, held, should be so construed thatordinarily no party is denied the opportunity of participating in theprocess of justice dispensation – Civil Procedure Code, 1908 – Ors.1,7,8,9,17,18,22,23,35 and 41".12.It is useful to refer to the decision AIR 1954 SC 411 at 412(Dinabandhu Sahu V. Jadumoni Mangaraj and others), wherein it is laid asfollows:"Held that even if the matter had to be judged under S. 5 of theLimitation Act, it would have been a proper exercise of the powerunder that section to have excused the delay. The words"sufficient cause" should receive a liberal construction so as toadvance substantial justice when no negligence nor inaction norwant of bona fides is imputable to the appellant. The ordercondoning delay was on the facts a proper one to pass under theproviso to S.85. 13 Mad 269, Approved". https://hcservices.ecourts.gov.in/hcservices/

13.We have heard the learned counsels and noticed the rivalcontentions. The learned counsel for the writ petitioners at the time ofadvancing his arguments informed this Court that the petitioners arewilling to pay a cost of Rs.25,000/- if an opportunity is given to them toprove their case on merits.14.We are of the view that refusal to condone delay can result in ameritorious matter being thrown at the early stage and cause of justicebeing defeated. Moreover, the law courts should not prefer to adopt apedantic approach and on the other hand a pragmatic approach has to bemade to deliver substantial justice overriding technical considerations asfar as the present case is concerned. Furthermore, a party does not standto benefit by adopting delay. Per contra, he runs a grave risk. It cannotgainsaid that judiciary is respected because it is capable of removinginjustice and is expected to do so. Admittedly, the claim of the firstrespondent Bank is for Rs.20,71,776/- together with interest at the rateof 19.89% p.a. with quarterly rests from the date of the application tillthe date of realisation etc. The learned counsel for the writ petitionersinforms this Court that already a sum of Rs.15 lakhs was paid and thepetitioners/appellants/defendants are willing to pay the rest of theamount and to settle the matter. It cannot be denied that the DebtRecovery Tribunal has power to recall the Recovery Certificate even afterits issuance on the basis that the matter was settled between thecreditor/Bank and the borrower/guarantor. No wonder the recovery of due isan essential function of any Bank. At this juncture, it cannot be lostsight of that the preamble of the Recovery of Debts due to Banks andfinancial Institutions Act, 1993 speaks of expeditious adjudication andrecovery of debts due to banks and financial institutions. Moreover,merely because an application for setting aside the exparte order havingbeen allowed to go for wilful default and also allowed the restorationpetition also dismissed for default, it cannot said by any means that thewrit petitioners lack bonafides in their endeavour to set aside theexparte order. In short, the length of delay is immaterial, in ourconsidered opinion.15.In the light of the foregoing discussions and in view of thespecific averment of the second writ petitioner/ second defendant, beingthe Managing Partner of the first defendant firm i.e., the sole individualengaged in business activity and to move quite often from place to placein order to secure business etc., and since he is ready to settle thematter consciously and judicially and taking note of all attendantscircumstances together, we are of the considered view that the writpetitioners have furnished sufficient cause in M.A.SR.Nos.1274 and 1277 of2006 filed to condone the delay of 1006 days to restore M.A.Nos.338 and339 of 2002 and therefore, we are inclined to interfere with the orderspassed in M.A.Nos.205 and 206 of 2006 dated 10.05.2007 passed by thesecond respondent and also that of the order of the Debts RecoveryTribunal-I, Chennai dated 11.10.2006 passed in M.A.SR.Nos.1274 and 1277 of2006 and accordingly, set aside their orders in the interest of justice. https://hcservices.ecourts.gov.in/hcservices/ However, we direct the writ petitioners/appellants /defendants to pay asum of Rs.25,000/- to the first respondent Bank as costs within 10 daysfrom the date of receipt of a copy of this order. 16.With the above observations, we allow the writ petition. The writpetitioners/appellants/defendants are given the opportunity to contest theproceedings before Debts Recovery Tribunal-I, Chennai diligently in themanner known to law and to settle the matter in issue by paying thebalance amount due. Having regard to the facts and circumstances, theparties are directed to bear their own costs.sglSd/-Asst.Registrar/true copy/ Sub Asst.RegistrarTo1.M/s.Indian Bank Thiruvottiyuur Branch, T.H. Road, Thiruvottiyur, Chennai 600 019.2.The Chairperson, Debt Recovery Appellate Tribunal, Chennai.3. The Debts Recovery Tribunal-I, Chennai.+3 ccs to M/s.K.N.Nataraj, Advocate Sr.No.4050.+1 cc to M/s.Aiyar & Dolia, Advocate Sr.No.4185.AVM(CO)dcp/5.2W.P.No.21097 of 2007