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2007 Supreme(Bom) 762

Bombay High Court
J. P. Devadhar and B. P. Dharmadhikari
PORWAL AUTO SERVICES, NAGPUR -Appeallant
Versus
PUNJAB AND SINDH BANK -RESPONDENTS
W. P. 5518 Of 2005
Decided On: 06/15/2007

Advocates Appeared:
H.M.CHANDURKAR, P.V.Kulkarni

The Court has the power to set aside an ex parte order if the petitioner shows sufficient cause for non-appearance.

Headnote:

Debts Recovery Act - Section 25 - The Court considers the provisions of the Debts Recovery Act, particularly Section 25, which allows the Court to set aside an ex parte order if the petitioner shows sufficient cause for non-appearance. The Court finds that the petitioner has shown their bona fides by depositing a portion of the amount and offering to pay more as part of a compromise. The Court grants the petitioner one more opportunity to complete the payment and sets aside the ex parte order.

Fact of the Case:

The writ petition challenges the order passed by the Debts Recovery Appellate Tribunal, Mumbai, refusing to set aside an ex parte judgment delivered by the Debts Recovery Tribunal. The petitioner argues that the summons was never tendered to them and that certain aspects were not considered by the Appellate Tribunal. The respondent argues that the orders passed by the Tribunals are just and proper. The Court finds that talks of compromise were ongoing between the parties and grants the petitioner one more opportunity to complete the payment as mentioned in the Recovery certificate. The ex parte order is set aside, subject to the petitioner depositing the amount within one month. The petitioner is also directed to file their Written Statement within fifteen days after completing the payment, and the Tribunal is to decide the proceedings within three months. The impugned orders are quashed and the original application is restored back to the file of the Debts Recovery Tribunal. The parties are not precluded from proceeding further with their efforts to compromise.

Finding of the Court:

The Court considers the arguments of both parties and the previous orders passed by the Court. It finds that talks of compromise were ongoing and that the petitioner should be given another opportunity to complete the payment. The Court sets aside the ex parte order and directs the petitioner to file their Written Statement and the Tribunal to decide the proceedings within a specified time period.

Ratio Decidendi: The Court grants the petitioner one more opportunity to complete the payment as mentioned in the Recovery certificate and sets aside the ex parte order. The petitioner is directed to file their Written Statement and the Tribunal is to decide the proceedings within a specified time period.

Result: The impugned orders are quashed and the original application is restored back to the file of the Debts Recovery Tribunal. The parties are not precluded from proceeding further with their efforts to compromise.

B. P. DHARMADHIKARI, J.

( 1 ) HEARD

( 2 ) THE challenge in this writ petition is to the Order passed by Debts recovery Appellate Tribunal, Mumbai, on 8th August, 2005 in Misc. Appeal No. 46 of 2003, refusing to set aside ex parte Judgment delivered by Debts Recovery tribunal on 6th June, 2002.

( 3 ) CONSIDERING the nature of controversy and various orders passed earlier, we have heard the matter finally. Hence, Rule. Rule is made returnable forthwith.

( 4 ) DURING hearing, it has transpired that the Certificate, for which recovery has been initiated against present petitioners, is for Rs. 13,40,922-00 with costs and interest. Learned Advocate Mr. Chandurkar states that while moving application before Debts Recovery Tribunal for setting it aside, 25 per cent of the amount,. e. , Rs. 3,44,000-00, has been deposited. He further states that though the Debts Recovery Tribunal's order shows that summons was "not claimed" or "refused" by present petitioners, that is not the correct position, and the same was never tendered to the petitioners. He, therefore, states that all these aspects are not considered by the Debts Recovery Appellate Tribunal while refusing to set aside the said order. He points out that as per judgment dated 6th June, 2002, recovery proceedings were initiated before Recovery Officer, and petitioners received notice thereof, which was then made returnable on 20th August, 2002. He states that immediately after getting knowledge of ex parte Judgment, petitioners applied for certified copy and got it on 2nd September, 2002. However, application for setting aside ex parte order was not immediately filed, as talks of compromise began with the parties and when the petitioners found that respondent was unnecessarily delaying the compromise, ultimately on 23rd December, 2002, Misc. Application was filed before Debts Recovery Tribunal for setting aside the said ex parte order. There was a delay of about 110 days. The Debts Recovery Tribunal has not condoned the said delay and, therefore, Misc Civil Appeal No. 46 of 2003 was filed before the Debts Recovery Appellate Tribunal.

( 5 ) LEARNED Advocate Mr. Kulkarni, on the other hand, contends that orders passed by the Debts Recovery Tribunal and the Debts Recovery Appellate tribunal are just and proper, and call for no interference in the writ jurisdiction. He points out that the petitioners are defaulters and clubbing their ten accounts together, the respondent-Bank has worked out their liability which is more than rupees one crore. He states that as against this, the petitioners have offered only rs. 33,00,000-00. He, therefore, states that the petitioners are only interested in delaying the matter and writ petition should be dismissed.

( 6 ) AFTER hearing the parties and also after perusing earlier orders passed by this Court, it is apparent that the talks of compromise were going on between the parties. In such circumstances, it was felt by us that when service of initial notice itself is in dispute, the petitioners can be given one opportunity, provided they complete the payment of certificate amount.

( 7 ) THE learned Counsel for the petitioners has stated that if a reasonable period is granted, the petitioners will complete said payment, provided they are given opportunity to place their case on merits before the Debts Recovery Tribunal.

( 8 ) LEARNED Advocate Mr. Kulkarni objects to this. He states that more than a reasonable time has already been given and considering the attitude of present petitioners, it will be a misplaced sympathy.

( 9 ) AS the petitioners have already shown their bona fides by depositing Rs. 3,44,000-00, and have also offered to pay certain more amounts as a part of compromise, and before us they have expressed their readiness and willingness to complete the payment as mentioned in the Certificate within a reasonable time, we grant one more opportunity to the petitioners. Earlier orders in this writ petition itself show that efforts to compromise



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