Kerala High Court
Abilash.C vs State Bank Of India on 12 June, 2024
Author: N.Nagaresh
Bench: N.Nagaresh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
WEDNESDAY, THE 12TH DAY OF JUNE 2024 / 22ND JYAISHTA, 1946
OP (DRT) NO. 196 OF 2024
MA NO.42 OF 2024 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM
NO.102 OF 2019 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM
PETITIONERS/PETITIONERS IN MA NO.42/2024/DEFENDANTS 3 TO 5:
1 ABILASH.C.,
AGED 40 YEARS
CHERAL HOUSE,KOLATHAR P.O,
KOZHIKODE, PIN - 673655
2 MOINUDEEN HANEEFA.T,
AGED 41 YEARS
THENGILKATH HOUSE, BEYPORE P.O,
KOZHIKODE, PIN - 673015
3 SAHEEDA .K
AGED 38 YEARS
KATTTIL HOUSE, THIKKODI P.O,
KOZHIKODE, PIN - 673529
BY ADVS.
GEORGE A.CHERIAN
JAISON MATHEW
GEORGE CHERIAN (SR.)
RESPONDENTS/RESPONDENTS/APPLICANT AND DEFENDANTS 1 AND 2
1 STATE BANK OF INDIA,
REPRESENTED BY AUTHORISED OFFICER ASSET RECOVERY
MANAGEMENT BRANCH, R S BUILDING,
M.G ROAD,ERNAKULAM, PIN - 682011
2 AURCHID FOOTWEAR INDIA PRIVATE LTD.
4/832-A, B C ROAD, BEYPORE P.O,
KOZHIKODE, REPRESENTED BY ITS MANAGING DIRECTOR
MISLU T P, PIN - 673015
OP(DRT) No.196 of 2024
2
3 MILSU.T.P
AGED 39 YEARS
S/O.KOYAMU T.P,
RESIDING AT THAZHATTUPEEDIYAKKAL HOUSE,
NALLALAM P.O, KOZHIKODE DISTRICT, PIN - 673027
SRI.TOM K. THOMAS
THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR
ADMISSION ON 12.06.2024, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
OP(DRT) No.196 of 2024
3
JUDGMENT
Dated this the 12th day of June, 2024
The petitioners, who are defendants 3 to 5 in O.A.
No.102 of 2019 on the file of the Debts Recovery Tribunal-I,
Ernakulam, have filed this O.P(DRT) seeking to set aside
Ext.P5 order dated 12.03.2024 passed by the Debts Recovery
Tribunal-I, Ernakulam and to give an opportunity to the
petitioners to contest the matter.
2. It is the case of the petitioners that the petitioners
were Ex-Directors of the 2nd respondent-Company. When the
Bank proceeded against the Company, the petitioners were
also arrayed as defendants. As the Company was defending
the OA, the petitioners bona fide believed that the present
Directors will be defending the OA effectively. According to
the petitioners, the present Directors also filed a written
statement admitting the liability of the Company and pointing
out that the petitioners are not liable for any dues to the Bank.
3. The petitioners state that unfortunately the Debts
Recovery Tribunal-I, Ernakulam passed Ext.P3 order
disposing of O.A. No.102 of 2019 making the petitioners also
liable for payment of ₹33,41,543.28 due under the Cash
Credit account and further interest on a sum of ₹32,83,004.28
from 10.01.2019.
4. The petitioners state that aggrieved by Ext.P3, the
petitioners submitted Ext.P4 application to set aside the ex-
parte Award invoking Section 19(25) of the Recovery of Debts
Due to Banks and Financial Institutions Act, 1993. The said
application has been rejected by the Debts Recovery Tribunal
as per Ext.P5 order on the ground that the application to set
aside the ex-parte order is not supported by a petition to
condone the delay in filing the application.
5. Unless the petitioners are permitted to contest the
matter on merits, the petitioners who are not at all liable to
pay, will be put to untold hardship and loss, contends the
counsel for the petitioners.
6. Standing Counsel entered appearance on behalf of
the Bank and resisted the original petition. The Standing
Counsel pointed out that the petitioners were duly served with
notice in respect of the O.A. The petitioners were arrayed as
defendants in the O.A. The petitioners should have taken care
to contest the original petition. The present attempt of the
petitioners is to delay and defeat the recovery process.
O.P(DRT) is therefore liable to be dismissed.
7. I have heard the learned counsel for the petitioners
and the learned Standing Counsel representing the
respondents.
8. O.A. No.102 of 2019 has been filed by the State
Bank of India to recover a sum of ₹33,41,543.28 being the
amount due to the Bank from the defendants under a Cash
Credit account together with interest. It is evident from the
arguments that the petitioners were former Directors of the
Company. The petitioners were served with notice. According
to the petitioners, they entrusted the matter with the current
Directors, who stated that the matter will be defended
effectively by the Company.
9. A perusal of Ext.P2 written statement filed by the
current Directors of the Company would show that defendants
3 to 5 (petitioners herein) are not Directors of the Company at
present and according to the present Directors, the petitioners
were unnecessarily impleaded as parties to the proceedings.
10. As soon as Ext.P3 order was pronounced by the
Debts Recovery Tribunal, the petitioners have filed Ext.P4
application invoking Section 19(25) of the Recovery of Debts
Due to Banks and Financial Institutions Act. It is seen from
the pleadings that the petitioners have moved the Tribunal
without any considerable delay.
11. Taking into consideration the stakes involved in the
matter, I am of the view that the petitioners shall be permitted
to contest the case on merits. At the same time, as O.A. is
pending since 2019, the Tribunal has to expeditiously
consider the application to set aside the ex-parte order.
In the facts of the case, the O.P(DRT) is disposed of
setting aside Ext.P5 in so far as the order in M.A. No.42 of
2024 is concerned. The petitioners shall file an application for
condonation of delay within a period of one week from today.
The Tribunal shall consider the same and pass orders
thereon, as expeditiously as possible and at any rate, within a
further period of one month, untrammeled by any
observations made in this judgment.
Sd/-
N.NAGARESH
JUDGE
spk
APPENDIX OF OP (DRT) 196/2024
PETITIONER EXHIBITS
Exhibit P1 TRUE COPY OF THE O.A.NO.102/2019
(WITHOUT ANNEXURES) OF THE DRT-1,
ERNAKULAM
Exhibit P2 TRUE COPY OF THE WRITTEN STATEMENT
FILED BY THE 1ST DEFENDANT IN
O.A.NO.102/2019 OF THE DRT-1,
ERNAKULAM DATED 11.07.2019
Exhibit P3 TRUE COPY OF THE FINAL ORDER DATED 21-
11-2023 PASSED BY THE TRIBUNAL IN
Exhibit P4 TRUE COPY OF MA.NO.42/2024 FILED BY
THE PETITIONER BEFORE THE TRIBUNAL IN
Exhibit P5 TRUE COPY OF THE PROCEEDINGS DATED 12-
03-2024 OF THE TRIBUNAL IN RESPECT OF
M.A.NO.42/2024 IN O.A.102/2019
OBTAINED FROM DRT WEBSITE
Exhibit P6 TRUE COPY OF DEMAND NOTICE DATED 05-
03-2024 ISSUED BY THE RECOVERY OFFICER
OF THE TRIBUNAL IN DRC.NO.265/2023 IN
