V.S. Ramanan Vs. The Jammu & Kashmir Bank Ltd. – Karnataka High Court

I. Case Reference Case Citation : (2023) ibclaw.in 621 HC Case Name : V.S. Ramanan Vs. The Jammu & Kashmir […]

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I. Case Reference

Case Citation : (2023) ibclaw.in 621 HC
Case Name : V.S. Ramanan Vs. The Jammu & Kashmir Bank Ltd.
Appeal No. : Writ Petition No.14484 of 2016 (Gm-Drt) (Neutral Citation No.: NC: 2023:KHC:22882)
Judgment Date : 03-Jul-23
Court/Bench : High Court of Karnataka
Present for Petitioner(s) : Sri Dhananjay Joshi, Senior Advocate Appearing For Sri Vachan H.U., Advocate
Present for Respondent(s) : Sri K. Shailesh Kumar, Advocate
Coram : Mrs. Justice K.S. Hemalekha
Original Judgment : Download

II. Full text of the judgment

ORDER

The present petition assailing the order dated 09.02.2016 in IR No.3178/2012 on the file of Debts Recovery Tribunal, Bangalore (“the Tribunal” for short), at Annexure – A, whereby, the application filed by the petitioner under Section 22(2)(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as “the Act” for the sake of convenience) seeking to set aside the ex parte judgment dated 18.11.2019 and to restore O.A.No.2/2009 was dismissed by the Tribunal.

2. Brief facts of the case are that, the petitioner filed Miscellaneous Application No.IR.No.3178/2012 seeking to set aside the ex parte judgment dated 18.11.2009 passed in O.A.No.2/2009. The suit was filed by respondent No.1 – Bank against respondent No.2 – Company, in the capacity as the borrower and the petitioner was impleaded as a guarantor for recovery of a sum of Rs.19,47,90,564/- with interest stating that the petitioner has executed a personal guarantee in respect of the dues owed by respondent No.2 – Company to the respondent No.1 – Bank. It is stated that the petitioner was placed ex parte on 02.03.2009 and an ex parte judgment was passed in favour of respondent No.1- Bank. It is averred that respondent No.1-Bank has shown the wrong address of respondent No.2-company as well as that of the petitioner without taking note that respondent No.2 – Company had shifted its address way back in the year 2003 and that the petitioner had also resigned from the employment of respondent No.2-Company in the year 2005 itself, and a copy of Form No.18 was submitted by respondent No.2 – company to the Registrar of Companies by letter dated 29.7.2005 and respondent No.2-Company terminated the services of petitioner with effect from 2005.

3. The main ground urged by the petitioner is that the application under Section 22(2)(g) of the said Act, was filed as the summons in original application was never served upon the petitioner or respondent No.2-Company and the bank though was aware about the shifting of the company way back in the year 2003 itself, respondent No.2 – bank has intentionally showed the wrong address of the company as well as that of the petitioner and that the application filed seeking to condone the delay in preferring the miscellaneous application ought to have been considered by the Tribunal for the bona fide reasons. The petitioner is aggrieved by the rejection of the application I.A.No.4255/2012 to condone the delay in filing the miscellaneous application.

4. Heard Sri Dhananjay Joshi, learned senior counsel appearing for Sri Vachan H.U., learned counsel for the petitioner and Sri K.Shailesh Kumar, learned counsel appearing for respondent No.1.

5. Learned senior counsel for the petitioner, in addition to various grounds urged in the petition, has canvassed mainly on the ground that the Tribunal was not justified in dismissing the application for condonation of delay seeking to set aside the ex parte judgment though sufficient grounds were made out by the petitioner before the Tribuanl. Learned senior counsel would contend that the summons by the Tribunal was not duly served on the petitioner or respondent No.2 – company and respondent No.1-bank though had sufficient material to demonstrate that respondent No.1 – bank had changed the address has intentionally shown wrong address before the Tribunal and thus, an ex parte judgment came to be passed. Learned senior counsel would contend that the dismissal of the application by the Tribunal has led to serious error as the matter was not decided on merits and only on the ground of delay the petition filed by the petitioner came to be dismissed and there is violation of principles of natural justice.

6. Per contra, learned counsel appearing for the bank would contend that there is no error committed by the Tribunal and the order passed by the Tribunal in dismissing the application is justified as no reasonable grounds are made out by the petitioner to condone the delay of 1,047 days in filing the miscellaneous application. Learned counsel would contend that the writ petition is not maintainable against an order passed by the DRT and the petitioner is not entitled for any relief as claimed in the petition.

7. Having heard learned senior counsel for the petitioner and the learned counsel for the respondent, the point that needs to be considered is,

“Whether the Tribunal was justified in not condoning the delay in filing the Misc. application and whether the Tribunal has committed an error in not deciding the application on merits holding that the petition is barred by limitation?”

8. The facts reveal that respondent No.1-bank had initiated suit against the petitioner and respondent No.2- company in O.A.No.2/2009 and the petitioner was placed ex parte by an order dated 2.3.2009 and an ex parte judgment was delivered against the petitioner herein. The petitioner and one Ajit G.Nambiar, who were defendant Nos.2 and 3 in O.A.No.2/2009, were arrayed as the guarantors and they were placed ex parte on 2.3.2009 and consequently, an ex parte judgment was delivered on 18.11.2009. The petitioner came to know about the ex parte judgment only in June 2012 when a public notice was issued by the bank in the course of DRT proceedings. The defendant No.3 filed miscellaneous application in MA.No.3311/2012 seeking setting aside of the ex parte judgment, inter alia, contending that the petitioner was neither working nor residing in the address mentioned in the cause title of O.A.No.2/2009. Defendant No.2 also filed another application I.A.No.657/2013 for condonation of delay and defendant No.3 filed similar application for setting aside the ex parte judgment and for condonation of delay. The petitioners submitted that they have been ceased to be the director and employee of the borrower company with effect from 1.10.2005 and the borrower company had shifted its address from Hosur Road to 17th K.M. Old Madras Road, Avalahalli, Virgonagar Post Bangalore – 560 049 and the change of address was within the bank’s knowledge and is evident from the letter issued by CDR Cell addressed to the borrower company at its present address. It is the bank’s knowledge about the present address of the company and it is evident from its participation in the BIFR proceedings. The Tribunal has dismissed the application on the ground that it is the mandatory duty on the part of the petitioner and respondent No.2-company about the change in the constitution of the company and the change in address and in the absence of any intimation of change of address to the bank, the bank cannot be aware about the change of address of the company and evidently the bank had issued notice to the petitioner and respondent No.2-company as shown at the time of availing the loan.

9. It is settled principle of law that ordinarily the litigant will not be benefited by filing an appeal belatedly more particularly when valuable rights of the parties are involved. By construing the delay, the Court has to have a liberal approach. It would have been different if the delay is exorbitant and if it is just filed to harass the other side. In the present case, evidently the material on record makes it clear that there is no deliberate negligence on the part of the petitioners as they approached the Tribunal after they came to know about the ex parte judgment. The Apex Court in the case of the Colletor, Land Acquisition, Anantnag and another vs. MST Khatiji [AIR 1987 SC 1353] para No.3 as under:

“3. “Every day’s delay must be explained” does not mean that a pedantic approach should be made. Why not every hour’s delay, every second’s delay?

The doctrine must be applied in a rational common sense pragmatic manner.”

10. It is well settled law that “sufficient cause” should be given liberal construction so as to advance substantial justice when there is no inaction, no negligence nor want of bona fide could be imputable to the petitioner. The Apex Court, in the case of N.Balakrishna and M.Krishna Murthy [1998(7) SCC 123], has held that Rules of Limitations are meant to destroy the rights of the parties as under:

“Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. the object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time.”

11. The Tribunal has dismissed the application filed by the petitioner under Section 5 of the Limitation Act, 1947 If the Court is satisfied with regard to delay in filing the appeal is not reasonable even without recourse to any evidence, if the delay is very short and reasonable, the Court can exercise its judicious discretion to the facts and the circumstances of the case and condone such delay. If for any reason, the Court requires any evidence to be recorded in order to prove the delay, the parties shall establish the delay by giving cogent and convincing reasons and thereafter the Court can apply its judicious mind and pass appropriate order on the application. The Tribunal has ignored the principles and dismissed the application holding that the petitioner has failed to establish the essential ingredients of Section 5 of the Limitation Act with cost of Rs.2.00 lakh, which on the face of it is erroneous and cannot be legally accepted. Thus, this Court is of the considered view that the matter requires to be remitted back to the DRT to consider the matter afresh on merits in view of the principles stated supra, the application filed by the petitioner to condone the delay in preferring the miscellaneous application needs to be allowed as the petitioner has made out sufficient reasons to condone the delay and accordingly, the delay in filing the miscellaneous application is condoned in light of the peculiar facts and circumstances of the case and it is for the Tribunal to consider the matter afresh in accordance with law as the application and the proceedings is of the year 2009. Certain directions needs to be issued to the Tribunal for disposal of the application in accordance with law and the point framed for consideration is answered in favour of the petitioners.

Accordingly, this Court pass the following:

ORDER

(i) Writ petition is allowed.

(ii) The impugned order dated 9.2.2016 in I.R.No.3178/2012 on the file of Debt Recovery Tribunal, Bangalore is hereby set aside and the Miscellaneous Application No.IR.No.3178/2012 is hereby restored to file and the DRT to consider the miscellaneous application afresh filed under Section 22(2)(g) of the Act seeking to set aside the ex parte judgment dated 18.11.2009 in O.A.No.2/2009, strictly in accordance with law.

Sd/-
JUDGE


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