Delhi High Court
Raj Kumar Agarwal vs State Bank Of Patiala And Ors on 12 January, 2012
Author: Sanjay Kishan Kaul
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision : 12.01.2012
+ WP (C) No.6729 of 2010
RAJ KUMAR AGARWAL ..... Petitioner
Through: Mr. K. Kumar, Advocate.
Versus
STATE BANK OF PATIALA AND ORS ..... Respondents
Through: Mr. Irfan Ahmed, Advocate for R-1.
CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MR. JUSTICE RAJIV SHAKDHER
SANJAY KISHAN KAUL, J. (Oral)
WP (C) No.6729/2010
1. Rule DB.
2. Learned counsel for respondent No.1 accepts notice.
3. At request of learned counsels for the parties, the petition is
taken up for final disposal.
4. The failure of the borrowers and guarantor to repay the amount
resulted in a suit being filed by respondent No.1-Bank against
respondents 2 & 3 and the predecessor-in-interest of the
appellant, Late Shri Naresh Kumar Aggarwal, (the father). The
father of the appellant was a guarantor while respondent No.3 is
the sole proprietor of respondent No.2, the borrower.
5. The defendants in the suit failed to enter appearance resulting in
them being proceeded ex parte vide order dated 2.2.1995.
However, before Suit No.2061/1993 could be decided, the
Recovery of Debt due to Banks and Financial Institutions Act,
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1993, came into force and consequently the proceedings were
transferred to the Debt Recovery Tribunal. The OA
No.191/1995 (registered after transfer to the DRT) was decreed
on 11.3.1997. The one page order only records that ex parte
evidence by an affidavit of the Manager of the Bank has been
filed and since no cause is shown by the defendants there was
nothing to disbelieve the statement of the witness. The
defendants were directed to pay a sum of `35,54,814.27 together
with pendente lite and future interest @ 23.75 per cent per
annum from the date of institution of the suit till the final
realization of the entire amount. In the event of failure to pay the
amount, respondent No.1-Bank was entitled to recover the
amount by sale of the mortgaged property of the guarantor.
6. If one may say so, there is no discussion whatsoever on the
merits of the claim and for convenience of reference, we
reproduce the whole order as under:
"Originally the suit was filed in the High Court on
14.9.93. on coming into force the Recovery of Debt due to
Banks and Financial Institutions Act, 1993, the case was
transferred by the High Court to the Tribunal. The
defendants were proceeded ex parte on 2.2.95. The
defendants did not appear nor have they filed WS. Thus,
there is no cause shown by the defendants. The applicant
bank in support of their case filed the ex parte evidence an
affidavit of Shri Pradeep Gupta, Manager of the applicant
bank. Since there is a cause shown by the defendants,
there is nothing before to disbelieve the statement of the
witness. Thus, the case of the applicant is proved.
The defendants are ordered to pay a sum of
`35,54,814.27 together with pendente lite and future
interest at the rate of 23.75% p.a. from the date of
institution of the suit till the final realization of the entire
amount. The defendants shall be jointly and severally
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liable to pay the amount within four weeks.
In the event of failure to pay the said amount within
the stipulated period, the applicant bank shall be entitled to
recover the amount by the sale of the mortgaged property
comprising property built at plot No.30-31, House
No.5609-5615, Basti Harphool Singh, Sadar Bazar, Delhi.
Even if by sale of the mortgaged property the entire
amount is not recovered, the balance amount shall be
recovered from the defendants jointly and severally.
Certificate be issued accordingly.
Announced in open Court."
7. Shri Naresh Kumar Aggarwal, the guarantor, filed an appeal
against that order which was registered as Appeal No.218/2000
before the DRAT but during the pendency of the appeal he
passed away. His legal heirs were, thus, brought on record
including the appellant, his son. The prayers made in the appeal
were as under:
"6. RELIEF SOUGHT
a. The order dated 11.03.1997 passed by the Debt
Recovery Tribunal, Delhi may please be ordered to be set
aside on the grounds stated in Para No.5 of the grounds of
appeal.
b. The suit may please be ordered to be dismissed
against the appellant as he is not connected with the matter
in any way.
c. In the alternative, after the setting aside the orders
dated 11.03.1997, the appellant be given an opportunity to
defend the case on merits and
d. That the suit be ordered to be dismissed on the
ground that no LR of the deceased respondent No.3 has
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been brought on record and the suit, therefore, stands
abated against the appellant and respondent Nos.2 to 5
including the deceased respondent Nos.3 and 5.
e. Costs of appeal and suit be also ordered to be
awarded to the appellant."
8. The aforesaid reliefs prayed for have been reproduced to show
that there was no prayer made for setting aside of the ex parte
proceedings. Shri Naresh Kumar Aggarwal had filed an
application under Order 9 Rule 13 of the Code of Civil
Procedure, 1908, before the DRT but that application was
dismissed vide order dated 18.1.1999. That order along with ex
parte decree dated 11.3.1997 was assailed before this Court by
filing a writ petition under Article 226 of the Constitution of
India, being WP (C) No.2181/1999. During the pendency of that
petition, on directions of the High Court, the appellant deposited
a total sum of `10.00 lakh in two installments. The writ petition
was disposed of on 15.2.2000 directing Shri Naresh Kumar
Aggarwal to file the appeal within 30 days of the order. Thus,
the ex parte decree passed by the DRT was sought to be
examined on merits.
9. The appeal has been dismissed vide impugned order dated
14.9.2010, which is assailed before us by filing the present writ
petition under Article 226 of the Constitution of India. As to the
scope of examination by the DRAT, the first paragraph itself is
significant which reads as under:
"1. The only question involved in this appeal is whether
the ex parte order rendered by the lower court can stand
the scrutiny of law."
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10. A perusal of the order shows that the DRAT has examined
whether late Shri Naresh Kumar Aggarwal was rightly or
wrongly proceeded ex parte. Towards the said objective the
reports of the process servers and the orders passed have been
perused. The plea that no transfer notice was sent to the
defendants on the case being transferred to the DRT has also
been examined and rejected since the party was already
proceeded ex parte. The other plea examined is arising from the
death of other defendants whose legal heirs were not brought on
record. There is, however, no examination of the controversy
whatsoever on merits.
11. In the course of the hearing on 21.3.2011 what was sought to be
urged by the counsel for the petitioner was that the appeal before
the DRAT on merits against the ex parte decree was not
examined. We noted that an endeavour was made to settle the
matter by submitting proposals by the petitioner to respondent
No.1-Bank and payments deposited in the interregnum period
from time to time. The subsequent order sheet dated 26.5.2011
shows that the petitioner had deposited a sum of `30.00 lakh
with respondent No.1-Bank and gave an offer of `55.00 lakh.
This offer was recommended by the Branch but the Head Office
turned down even this offer.
12. Learned counsel for the petitioner before us submits that neither
the DRT nor the DRAT have examined the merits of the claim of
respondent No.1-Bank and the only controversy he seeks to urge
is the rate of interest which is not established as per the
documents placed on record by respondent No.1-Bank. He
further states that till date the petitioner has paid about `55.00
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lakh, which is not disputed by learned counsel for respondent
No.1-Bank. Thus, it appears that while stating that the amount
of `30.00 lakh was paid up to 26.5.2011, the counsel for the
petitioner did not give the total amount deposited even till that
date which was more.
13. We are of the considered view that the controversy, at least, qua
rate of interest must be examined by the DRAT. We say so as
the decree passed by the DRT does not deal either with the
merits of the claim established by respondent No.1-Bank or as to
how the rate of interest has been awarded. It is really a non-
speaking decree. The DRAT has also not gone into the merits of
the controversy and has only discussed the issue of the ex parte
proceedings initiated against the defendants apart from the plea
of the non-impleadment of all legal heirs. At least some forum is
required to look into the documents and examine as to how the
rate is interest is established as per those documents and also to
consider the plea of the appellants of reduced pendente lite and
future interest especially in view of the deposits made by the
appellant.
14. The impugned order dated 14.9.2010 of the DRAT is
accordingly set aside and the matter is remanded back to the
DRAT for examination limited to the aforesaid aspect.
15. The writ petition is allowed in the aforesaid terms leaving the
parties to bear their own costs.
16. The petitioner and respondent No.1-Bank to appear before the
DRAT on 6.2.2012.
17. A copy of the order be sent to the DRAT without process fee.
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CM No.13314/2010
18. In view of the disposal of the writ petition, no further directions
are called for on this application and the same stands disposed
of.
SANJAY KISHAN KAUL, J.
JANUARY 12, 2012 RAJIV SHAKDHER, J.
b'nesh
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