Jai Gopal Kansal And Another vs Indian Bank, Branch Office Indian ...
2019 Latest Caselaw 992 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Reserved on 28.02.2019
 
Delivered on 12.03.2019
 

 
Case :- WRIT - C No. - 1634 of 2019
 
Petitioner :- Jai Gopal Kansal And Another
 
Respondent :- Indian Bank, Branch Office Indian Bank, Railway Road Hapur And Another
 
Counsel for Petitioner :- Rahul Jain
 
Counsel for Respondent :- Amrish Sahai
 

 
Hon'ble Rohit Ranjan Agarwal,J.

1. Heard Shri Rahul Jain, learned counsel for the petitioner and Shri Amrish Sahai, learned counsel for respondent-Bank.

2. Present petition arises out of the order passed by Debts Recovery Appellate Tribunal, Allahabad dated 08.10.2018 by which petitioner-appellant was directed to deposit Rs.1 crore (which is around 25% of the amount due at the time of filing of appeal), as pre-deposit for making the appeal entertainable before D.R.A.T.

3. Petitioner before this Court was one of partners of a firm known as M/s Sanjay Kumar Neeraj Kumar, which took bill purchase limit facility from respondent bank, Railway Road Branch, Hapur. According to petitioner, an appliation was moved by the firm for closing the said purchase limit on 10.01.1984 and also releasing the mortgage property with the bank. When no steps was taken by Bank a registered notice was given on 16.05.1984 to the Bank.

4. An Original Suit No. 223 of 1984 Heeralal and others versus Indian Bank and 3 others was filed with the relief of closing the account after settlement and for release of mortgage property. The said suit was contested by the bank and it filed its written statement stating that defendant firm had to pay an outstanding amount of Rs.20,866.84/-.

5. The said suit was decreed by judgment and order dated 22.12.2014, it was directed that 16.05.1984, the date of notice be treated as the date from which the amount of F.D.R. was to be adjusted in Current Account Nos.6 and 7 and the facility for extending the benefit to the firm be stopped and the mortgage deed be returned within two months.

6. Aggrieved by said order, a Civil Appeal No.14 of 2005 was filed by Bank against the partners as well as the firm M/s Sanjay Kumar Neeraj Kumar before the Additional District Judge, Court No.3, Ghaziabad.

7. The said appeal was dismissed by order dated 30.09.2009, against which the bank preferred a second appeal before this Court, which was also dismissed.

8. While Original Suit No.223 of 1984 was pending, the Bank filed Original Suit No.737 of 1986 before the Court of Civil Judge, Ghaziabad against the firm Sanjay Kumar Neeraj Kumar its partners and another firm M/s Bihar Traders.

9. In the aforesaid suit, the bank claimed that after raid by Sales Tax Department was conducted in the year 1982, the partners of the firm started business in the name of M/s Kansal brothers, Harish Chandra and Company, M/s Bihar traders. All the partners were the same.

10. In the said suit the bank claimed Rs.10,66,417.49/-. The said suit was contested by petitioner and other partners of the firm and written statement was filed. During the pendency of said suit, Recovery of Debts Due to Banks and Financial Institutions Act, 1993 came into force and the said suit was transferred to the Debts Recovery Tribunal at Jabalpur.

11. Thereafter, the said suit was transferred to D.R.T., Allahabad and finally to D.R.T., Lucknow, where it was registered as T.A. No.819 of 2002. It appears that petitioner or the other partners did not appear before the D.R.T., Lucknow, whereby an ex parte judgment was passed on 31.08.2009 holding the petitioner along with other partners of the firm liable for the payment of Rs.10,66,417.49/- along with interest at the rate of 18% with quarterly interest.

12. An application M.A. No.4 of 2010 was moved by petitioner along with other partners of the firm for recalling ex parte order dated 31.08.2009 on the ground that they did not have knowledge of matter pending before the D.R.T., Lucknow and when they received the order dated 31.08.2009 on 24.11.2009 came to know about the said ex parte order and, thereafter, they moved the recall application.

13. Debts Recovery Tribunal after considering the recall application by reasoned and speaking order rejected the same by order dated 04.09.2013 on the ground that petitioner and other partners had knowledge of the matter pending before D.R.T., Lucknow. Aggrieved by the said order, petitioner filed a Misc. Appeal under Section 20 of the Recovery of Debts Due to Banks and Finance Institutions Act, 1993 (hereinafter called as Act) before the Debts Recovery Appellate Tribunal, Allahabad along with the said appeal, an application for waiver was also filed by the petitioner.

14. By order dated 02.08.2018, Appellate Tribunal directed the petitioner to deposit Rs. 1 crore (which is around 25 % of the amount due at the time of filing an appeal) as pre-deposit to make the appeal entertainable.

15. Contention of counsel for petitioner is that as petitioner had filed a recall application against an ex parte order dated 31.08.2009, Debts Recovery Tribunal should have allowed the same. The appeal filed under Section 20 by petitioner was not a regular appeal, but was a misc. appeal and the Debts Recovery Appellate Tribunal had wrongly and illegally asked for pre-deposit of Rs.1 crore before the appeal is heard on merits. He submits that in case of regular appeal under Section 20, petitioner is required to deposit 75% of the amount of debts so due as given under Section 21. But the present appeal has been filed for setting aside an ex parte order by a recall application, as such the provisions of Section 21 are not attracted and the procedure of the Appellate Tribunal as given in Section 22(2)(g) of the Act applies, which states that the Appellate Tribunal shall have the same powers as are vested in a Civil court under the Code of Civil Procedure. He further submits that the provisions of Order XLIII Rule 1(d) of Code of Civil Procedure applies which is in regard to appeal from order.

16. Shri Jain further submits that rejection of application for recall filed under Order IX Rule 13 for setting aside the ex parte order is not a decree, but its an order, which is appellable under Order XLIII C.P.C. and not an appeal under Section 96 C.P.C., which is against a decree.

17. He further relied upon a judgment of this Court passed in Writ-C No. 34076 of 2011, Jyoti Extraction Pvt. Ltd. and another versus State of U.P. and others.

18. Shri Amrish Sahai, counsel for Bank submits that petitioner is liable to pay 25% of the amount so determined by the Debts Recovery Appellate Tribunal before his appeal is being heard. Shri Sahai submits that an appeal under Section 20 can only be heard, when the requisite pre-deposit as enumerated in Section 21 has been complied with. He further submits that the waiver application of petitioner was considered by the Appellate Tribunal and the pre-requisite deposit of 75% was reduced to 25%, as such no interference is required.

19. He further relied upon the judgment of the Apex Court in case of Mardia Chemicals versus Union of India, 2004 (4) SCC 311. He further submits that there is no distinction, such as regular appeal and misc. appeal in the matter before the Debts Recovery Tribunal and law laid down by the Apex Court has to be followed as regards the pre-requisite deposit.

20. Having considered the rival submissions and from the perusal of records, the sole controversy which arises for consideration is whether petitioners are liable to pay the prerequisite amount in view of Section 21 of the Act before the appeal is entertained and whether an appeal arising out of any order passed by the Debts Recovery Tribunal is a regular appeal or is a misc. appeal. In order to appreciate the controversy a glance to following provisions of law are necessary. Section 20 of the Act deals with appeal to the Appellate Tribunal is reproduced below:

"20. Appeal to the Appellate Tribunal.--(1) Save as provided in sub-section (2), any person aggrieved by an order made, or deemed to have been made, by a Tribunal under this Act, may prefer an appeal to an Appellate Tribunal having jurisdiction in the matter.

(2) No appeal shall lie to the Appellate Tribunal from an order made by a Tribunal with the consent of the parties.

(3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order made, or deemed to have been made, by the Tribunal is received by him and it shall be in such form and be accompanied by such fee as may be prescribed:

Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.

(4) On receipt of an appeal under sub-section (1), the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being 21 heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.

(5) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned Tribunal.

(6) The appeal filed before the Appellate Tribunal under sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of receipt of the appeal."

21. Further Section 21 provides for deposit of amount due on filing appeal. According to it, unless a person deposits 75% of the amount of debt so due as determined by the Tribunal under Section 19, his appeal shall not be entertained. Section 21 is quoted as under:

"21. Deposit of amount of debt due, on filing appeal.--Where an appeal is preferred by any person from whom the amount of debt is due to a bank or a financial institution or a consortium of banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal seventy-five per cent of the amount of debt so due from him as determined by the Tribunal under section 19:

Provided that the Appellate Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section."

22. Section 22 lays down procedure and power of the Tribunal and the Appellate Tribunal. Section 22(2)(g) is in regard to the setting aside any order of dismissal of any application for default or any order passed by it ex parte. It further provides that Tribunal and Appellate Tribunal shall have same power for the purpose of discharging their functions as are vested in Civil Court under the Code of Civil Procedure. Section 22 is reproduced below:

22. Procedure and Powers of the Tribunal and the Appellate Tribunal.-- (1) The Tribunal and the Appellate Tribunal shall not be bound the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings.

(2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely:-

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits;

(d) issuing commissions for the examination of witnesses or documents;

(e) reviewing its decisions;

(f) dismissing an application for default or deciding it ex parte;

(g) setting aside any order of dismissal of any application for default or any order passed by it ex parte;

(h) any other matter which may be prescribed.

(3) Any proceeding before the Tribunal or the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196, of the Indian Penal Code (45 of 1860) and the Tribunal or the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

23. That from reading of Section 22(2), it is clear that the Code of Civil Procedure is applicable and the power is vested both in the Tribunal as well as the Appellate Tribunal to proceed according to the procedure laid down in Code of Civil Procedure. Sub clause 2(g) of Section 22 is in regard to the application for recall of ex parte orders.

24. Now, the said provisions has to be read with provisions of Code of Civil Procedure. Section 33 of the C.P.C. deals with judgment and decree. Section 96 provides for appeals from original degree. While Section 104 read with Order XLIII Rule 1(d) provides for an appeal from an order under Rule 13 of Order IX rejecting an application for an order to set aside a decree passed ex parte. Thus, there is a distinction between an appeal filed against a decree and an appeal filed against an order.

25. Appeal against a decree is filed under Section 96, while appeal against an order is filed under Section 104 read with Order XLIII Rule 1, which is a miscellaneous appeal.

26. In the present case, the appeal filed under Section 20 before the Appellate Tribunal was in fact a misc. appeal filed, against an order rejecting an application under Order IX Rule 13 for setting aside an ex parte decree, as such the said misc. appeal was not against any decree, but was against an order. Section 21 of the Act contemplates that the amount of pre-deposite has to be made when the appeal is filed against the amount of debts so due as determined by the Tribunal under Section 19. In the present case, the appeal is not against the order determining the debt due dated 31.08.2009, but is against the order dated 04.09.2013 rejecting the recall application for setting aside an ex parte decree.

27. In case of Jyoti Construction (supra), this Court had held as under:

"A perusal of Section 22 (2) (f) and (g) of the Act of 1993 indicates that the Tribunal has the power to dismiss an application for default and also has the power to set aside any order of dismissal of any application for default. The Appellate Tribunal also has the same powers of the Code of Civil Procedure to the extent stated in Section 22.

In the light of the aforesaid provision, it is apparently clear that the Tribunal has the power to dismiss an application for want of prosecution and also has the power to set aside an order of dismissal of an application for default. Orders passed on such application does not amount to a decree, and consequently, a miscellaneous appeal can be filed under Section 104 read with Order 43 Rule 1 (c) of the Code of Civil Procedure.

Section 18 of the Act of 2002 gives a right to any person aggrieved by any order of the Tribunal to file an appeal before the Appellate Tribunal. The word "any order" includes an order passed on a miscellaneous application."

28. In the said case the court was also dealing with a question regarding application for restoration and the Court held that the appeal so filed was a misc. appeal and was not a regular appeal as contemplated under Section 96 C.P.C., but was an appeal under Section 104 read with order XLIII Rule 1 (d), as such the demand for deposit of court fee was not correct.

29. However, in the present case, petitioner himself committed mistake by filing a waiver application before the Appellate Tribunal seeking waiver of pre-deposit, as such the tribunal proceeded to decide waiver application and required the petitioner to deposit 25% amount as pre-deposit for the entertainment of the appeal.

30. However, by amendment in the writ petition, the petitioners have submitted in para 39(G) that it was by-mistake that petitioners have filed waiver application along with their appeals as there was no requirement of such application being misc. appeal.

31. In view of the facts that the appeal filed by petitioner is a misc. appeal seeking relief of only setting aside the order dated 04.09.2013, whereby his recall application has been rejected. The waiver application so filed is of no consequence.

32. In view of the above, the order dated 02.10.2018 passed by the Debts Recovery Appellate Tribunal, requiring the petitioner to deposit 25% of the amount, i.e., Rs.1 crore before making the appeal entertainable is set aside and it is directed that the Appellate Tribunal shall consider misc. appeal filed by petitioner on merits without insisting for the said amount and decide the same preferably within six weeks from the date of production of certified copy of this order.

33. The writ petition stands allowed.

Order Date :- 12.03.2019

A.N. Mishra