TMI Blog2008 (1) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... , JJ. JUDGMENT 1. Leave granted. 2. The present appeal is directed against the order dated November 23, 2005 passed by the High Court of Judicature at Allahabad in Civil Miscellaneous Writ Petition No. 67297 of 2005. By the said order, the High Court dismissed the writ petition filed by the appellant-writ petitioners and confirmed the order of Debt Recovery Appellate Tribunal, Allahabad dated September 13, 2005 which in turn affirmed the order passed by the Debt Recovery Tribunal, Jabalpur on December 20, 2001. 3. To appreciate the controversy raised in the present appeal, few relevant facts may be stated. It is the case of the appellant that Adhunik Detergent Ltd. (Defendant No. 1 in Suit No. 44A of 1993 instituted by respondent-Union Bank of India) was incorporated as Company under the Indian Companies Act, 1956. There was another Company also known as Adhunik Synthetics Ltd. which was floated by the Directors of Adhunik Detergent Ltd. According to the appellants, initially, Adhunik Detergent Ltd. had seven Directors, namely, (1) Satyanarayan Jalan, (2) Krishna Jalan, (3) Chakrapani Jalan, (4) K.K. Jalan, (5)Sunil Poddar, (6) Sushil Kumar Kanodia and (7) Radhey Shy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, prayed that an issue as to maintainability of suit against defendant Nos. 7 to 9 be framed and decided as preliminary issue before trying the suit on merits. Another application was also made in November, 1995 raising a similar objection contending that the suit was not instituted in accordance with law. The plaint which was filed was not signed by a person authorized to do so and on that count also, the suit was not tenable. It was further stated that suit against defendant Nos. 7 to 9 was not maintainable. A prayer was made to frame two issues under Order XIV, Rule 1 of the Code of Civil Procedure, 1908 (Code for short) as preliminary issues and to decide them as such. 5. It may, however, be stated that during the pendency of the suit before the Civil Court, the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the Act) came into force and in 1998 the suit filed by the respondent-Bank came to be transferred to the Debt Recovery Tribunal, Jabalpur (DRT for short). The appellants had no knowledge about the transfer of the suit to DRT nor summonses were issued by DRT to the appellants at the new address. In the circumstances, nob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in proceeding with the application and deciding it on merits ex-parte in absence of the appellants. It was submitted that no summonses were served upon the appellants and thus no opportunity of hearing was afforded to them before passing the impugned order which is liable to be set aside. The DRT in the circumstances, ought to have allowed the application for setting aside ex-parte order. By not doing so, the DRT had committed grave error and the said order deserves to be quashed. It was also submitted that appellants were not informed about the transfer of case from Civil Court to DRT and no summonses were served upon them. According to the appellants, they had changed their address and new address was available with the Bank. In spite of that, with mala fide intention and oblique motive, summonses were sought to be served upon appellants at an old address but the appellants were not served because of change of address. Summonses were then published in a Hindi newspaper which had no wide circulation. That action was also taken with a view to deprive the appellants from knowing about the proceedings before the DRT so that they may not be able to appear and defend themselves and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serve the appellants once again, they made a prayer to the Bank to get the summonses published in a newspaper which was done and in Navbharat Times, Bombay as well as Navbharat Times, Raipur summonses were published. Navbharat Times is having very wide circulation at both the places, i.e. Bombay as well as at Raipur. It was, therefore, not open to the appellants to contend that they were not subscribing and/or reading a Hindi newspaper by producing a bill from a newspaper agent. Such a bill can be obtained from any vendor. No reliance can be placed on such evidence. Moreover, an extremely important fact which weighed with both the Tribunals as well as with the High Court was that in an application under Section 22(2)(g) of the Act for setting aside ex parte order passed by DRT, the appellants have suppressed material and extremely important fact that they had appeared before the Civil Court and had filed written statement. The application proceeded on the footing as if the appellants were never aware of any proceedings initiated against them by the plaintiff-Bank. The DRT was, therefore, wholly right in dismissing the application and the said order was correctly confirmed by the DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and no implicit reliance can be placed on that evidence. It is immaterial whether appellants were subscribers of the said newspaper and whether they were reading it. Once a summons is published in a newspaper having wide circulation in the locality, it does not lie in the mouth of the person sought to be served that he was not aware of such publication as he was not reading the said newspaper. That ground also, therefore, does not impress us and was rightly rejected by the Tribunals. 12. While dealing with the contention raised by the appellants, the DRT observed; When summons are published in newspaper, the Court has to be cautious that it is published in a newspaper, circulated and widely read in an area where the defendant stays. Navbharat Times is a national newspaper read not only in Mumbai but also elsewhere in this country. The summons were published also in a newspaper circulated in Raipur from where the loan was disbursed. As stated in the main order, the Court is satisfied that summons were properly published and summons has been properly served. 13. But the fundamental objection which had been raised by the respondent-Bank and upheld by the Tribunals is legally we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be read with Rule 13 of Order IX of the Code which provides for setting aside ex parte decree passed against a defendant. Rule 13 of Order IX as originally enacted in the Code of 1908 read thus; 13. Setting aside decree ex parte against defendant. In any case in which a decree is passed ex parte against a defendant, he may apply to the Court by which the decree was passed for an order to set it aside; and if he satisfies the Court that the summons was not duly served, or that he was prevented by any sufficient cause from appearing when the suit was called on for hearing, the Court shall make an order setting aside the decree as against him upon such terms as to costs, payment into Court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit: Provided that where the decree is of such a nature that it cannot be set aside as against such defendant only it may be set aside as against all or any of the other defendants also. 16. Original Rule 13 of Order IX of the Code thus provided that when a decree had been passed ex parte against the defendant who satisfied the Court that summons was not duly served upon him, the Court was bound to set a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fifty-fourth Report, reiterated; 9.12. Under Order 9, rule 13, if the court is satisfied either that the summons has not been served, or that the defendant was prevented by sufficient cause from appearing, etc., the ex parte decree should be set aside. The two branches of the rule are distinctive, and the defendant, whatever his position may be in respect of one branch, is entitled to benefit of the other branch, if he satisfies the court that he has made good his contention in respect of the other branch. 9.13. In the earlier Report, several points were considered with reference to this rule, and amendments suggested on one point,-the broad object being to ensure that a decree shall not be set aside merely on the ground of irregularity in service, if the defendant had knowledge of the decree. After consideration of the points discussed in the earlier Report, we have reached the same conclusion. 18. Accepting the recommendations of the Law Commission, the rule was amended by the Code of Civil Procedure (Amendment) Act, 1976. Rule 13 of Order IX with effect from February 1, 1977 now reads thus; 13. Setting aside decree ex parte against defendantIn any case in which a dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is not even contended by the appellants that though they had knowledge of the proceedings before the DRT, they had no sufficient time to appear and answer the claim of the plaintiff-bank and on that ground, ex parte order deserves to be set aside. 20. In our opinion, the Tribunals were also right in commenting on the conduct of the appellants/defendants that they were appearing before Civil Court through an advocate, had filed written statement as also applications requesting the Court to treat and try certain issues as preliminary issues. All those facts were material facts. It was, therefore, incumbent upon the appellants to disclose such facts in an application under Section 22(2)(g) of the Act when they requested the DRT to set aside ex parte order passed against them. The appellants deliberately and intentionally concealed those facts. There was no whisper in the said application indicating that before the Civil Court they were present and were also represented by an advocate. An impression was sought to be created by the defendants/appellants as if for the first time they came to know in December, 2000 that an ex parte order had been passed against them and immediatel ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
