MSTC Limited, A Government of India Enterprise under the Administrative Control of Ministry of Steel, New Delhi, Incorporated under the provisions of the Companies Act, 1956 vs Standard Chartered Bank, A body incorporated under thereafter Provisions of the Royal Charter, 1853 With its principal office at 1, Aldermanbury Square

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(Bom) 126

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NITIN JAMDAR, GAURI GODSE, JJ.
MSTC Limited, A Government of India Enterprise under the Administrative Control of Ministry of Steel, New Delhi, Incorporated under the provisions of the Companies Act, 1956 - Petitioner
Versus
Standard Chartered Bank, A body incorporated under thereafter Provisions of the Royal Charter, 1853 With its principal office at 1, Aldermanbury Square, London EC2V7SB, and interalia, carrying on business at Kolkata at 17 SA, Nalini Ranjan Avenue, New Alipore, Kolkata 700053 - Respondent
Writ Petition (L) No. 34860 Of 2022
Decided On : 17-01-2023

Advocates Appeared:
For the Petitioner: Mr. Gaurav Joshi with Mr Amit Jajoo, Mr Phiroze Colabawalla, Ms. Richa Bhaati, Mr Rohit Gupta and Ms Anamika Singh, a/w Mr Darpan Bhatia, i/b Indus Law.
For the Respondent: Mr. Tushad Cooper a/w Ms. Drishti Doshi, Mr Kingshuk Baneerjee with Ms. Radhika Gupta, Mr Taha Mirza, Ms. Rashika Bajpai, i/b. Khaitan & Co.

Headnote:
Recovery of Debts and Bankruptcy Act, 1993 – Section 19 - Limitation Act, 1963 – Section 14, 5 -Writ jurisdiction - Recovery of Debts - Whether mistake was bona fide or it was devised to cover an ulterior purpose – Held, Court find it appropriate to exercise writ jurisdiction - It cannot be held that Petitioner had at every stage attempted to drag proceedings, as sought to be contented by respondent - Original Order challenged by Petitioner is an order/decree on admission directing - Petitioner to make payment - Admittedly Petitioner has already made a pre-deposit - None of steps taken by Petitioner can be attributed towards any kind of malafides or delay tactics - Petitioner has not gained any undue benefit by taking all steps, which are in fact only an attempt to get an opportunity to deal case on merits - Court thus, find that explanation put forth by Petitioner for condonation of delay is satisfactory – Ordered Accordingly.

JUDGMENT :

[Gauri Godse, J.]

1. Rule. Rule made returnable forthwith. Respondents waive service. Taken up for final disposal.

2. This Petition is filed for challenging the order dated 9 November 2022 passed by the Debt Recovery Appellate Tribunal (“DRAT”) at Mumbai in Interim Application No. 43 of 2021 in Miscellaneous Appeal (Dairy) No. 146 of 2021. By the said order application filed by the Petitioner for condonation of delay of 856 days in filing the appeal is rejected. Petitioner had filed the said appeal for challenging judgment and order dated 16 September 2017 passed by the Debt Recovery Tribunal (“DRT”), thereby granting decree on admission in favour of the Respondent.

3. Respondent had filed Original Application No. 43 of 2012 under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) before DRT, Mumbai for recovery of an amount of Rs.191,03,54,070.96 together with interest thereof. Petitioner had filed a written statement in the said application. Respondent had filed Interim Application No. 302 of 2017 under Rule 12(5) of the DRT (Procedure) Rules, 1993 praying for directing the Petitioner to pay the amount admitted by the Petitioner as being due and payable to the Respondent (decree on admission). By order dated 16 September 2017 DRT allowed the said application thereby directing the Petitioner to pay an amount of Rs.222.51 crores.

4. Petitioner filed Miscellaneous Appeal No. 1 of 2018 before DRAT for challenging the said order dated 16 September 2017 which was a decree on admission. This Appeal filed by the Petitioner was within the period of limitation. Petitioner filed Review Application No. 1 of 2018 for seeking review of the said order dated 16 September 2017. Thereafter on 28 December 2017, Petitioner filed an application (praecipe) seeking leave to withdraw the Miscellaneous Appeal No. 1 of 2018, with liberty to pursue the Review Application. By order dated 2 January 2018, Petitioner was allowed to withdraw the appeal, in view of the reasons that were stated in the application for withdrawal. Accordingly, Miscellaneous Appeal No. 1 of 2018 was disposed of in terms of the application for withdrawal.

5. On 15 February 2018, Petitioner filed Miscellaneous Application No. 11 of 2018 praying for condonation of delay of 28 days in filing the Review Application. The said application for condonation of delay in filing the Review Application was rejected on 21April 2018, on the ground that DRT does not have the power to condone delay in filing Review Application. Feeling aggrieved by the rejection of the delay condonation application, Petitioner had filed Writ Petition No. 2765 of 2018 in this Court. By order dated 3 May 2019 the said Writ Petition was allowed and this court held that DRT had power to condone the delay in filing Review Application. Thus, by the said order this court allowed the application for condonation of delay in filing Review Application and in view thereof the Review Application was restored to file.

6. Respondent had challenged the said order dated 3 May 2019 by filing SLP in the Hon’ble Supreme Court. In view of the interim order of stay granted by the Hon’ble Supreme Court, Review Application was not heard. By order dated 21 January 2020, the Hon’ble Supreme Court allowed the SLP filed by Respondent and the Review Application of the Petitioner was dismissed. Thus, the Hon’ble Supreme Court held that DRT does not have any power to condone delay in filing Review Application. In view of the dismissal of the Review Application on the ground of delay, Petitioner, thereafter filed Miscellaneous Appeal (Diary) No. 146 of 2021 in DRAT for challenging the said order dated 16 September 2017 by which the decree on admission was granted in favour of the Respondent. Since there was delay in filing the said appeal Petitioner filed Interim Application No. 43 of 2021 for condonation of delay. By order dated 9 November 2022 DRAT rejected the said Interim Application for condonation of delay.