Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
Vipin Sanghi, Jasmeet Singh, JJ.
Anita Garg & Ors. - Appellants
Versus
State Bank Of India - Respondent
W.P.(C) 6886 of 2021 and CM Appls. 21779 - 21780 of 2021
Decided On : 07-09-2021
The court analyzed the provisions of Section 19(5)(i) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The section mandates the filing of a written statement and counter-claim within 30 days from the date of service of summons. The court emphasized the strict timelines for filing the written statement and counter-claim, which can only be extended in exceptional cases and special circumstances. The court also considered the objective of the 1993 Act, which is to provide for the expeditious adjudication and recovery of debts due to banks and financial institutions. The court concluded that the petitioners were effectively served with the summons and had access to the complete set of documents, and their conduct was aimed at delaying the proceedings. The court upheld the orders of the DRAT and dismissed the review application.
Fact of the Case:
The petitioners filed a writ petition seeking to quash and set aside the orders passed by the Debt Recovery Appellate Tribunal (DRAT) in an appeal and review application. The petitioners were served with a notice of the Original Application (OA) filed by the respondent bank under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The petitioners filed a joint written statement and counter-claim within the prescribed period. The respondent bank filed applications seeking striking off of the written statement and counter-claim. The Debt Recovery Tribunal (DRT) dismissed the applications, but the DRAT allowed the appeal and directed the written statements and counter-claim to be taken off the record. The review application filed by the petitioners was also dismissed by the DRAT. The petitioners challenged these orders before the court.
Finding of the Court:
The court analyzed the provisions of Section 19(5)(i) of the 1993 Act, which mandates the filing of a written statement and counter-claim within 30 days from the date of service of summons. The court held that the timelines for filing the written statement and counter-claim are strict and can only be extended in exceptional cases and special circumstances. The court also considered the conduct of the petitioners and found that they were duly served with the summons and had access to the complete set of documents filed by the respondent bank. The court concluded that the petitioners deliberately delayed filing their written statement to prolong the proceedings. The court further held that the DRAT correctly set aside the order of the DRT and dismissed the review application.
Ratio Decidendi: The court held that the timelines for filing the written statement and counter-claim under Section 19(5)(i) of the 1993 Act are strict and can only be extended in exceptional cases and special circumstances. The court also emphasized the importance of timely disposal of cases for recovery of debts due to banks and financial institutions. The court concluded that the petitioners were effectively served with the summons and had access to the complete set of documents, and their conduct was aimed at delaying the proceedings. The court upheld the orders of the DRAT and dismissed the review application.
Result: The court dismissed the writ petition filed by the petitioners and upheld the orders passed by the DRAT. The written statements and counter-claim of the petitioners were directed to be taken off the record. The court held that the petitioners were effectively served with the summons and had access to the complete set of documents, and their conduct was aimed at delaying the proceedings. The court concluded that the DRAT correctly set aside the order of the DRT and dismissed the review application.
JUDGMENT
1. The present petition has been filed seeking a writ in the nature of Certiorari to quash and set aside the orders dated 27.10.2020 and 11.12.2020 passed by the Debt Recovery Appellate Tribunal, New Delhi (DRAT) in Appeal No. 68/2020 and Review Application 05/2020 in Appeal No. 68/2020. The petitioners in the present petition are the following:
i. "Smt Anita Garg
ii. Shri. Prem Chand Garg.
iii. Smt. Pushpa Gupta
iv. Smt Radha Gupta
v. Smt. Anju Goel"
2. Briefly stated, the facts giving rise to the filing of the present petition are as under -
3. M/s Nutrionex Manufacturers Limited (hereinafter called "NML'7 Borrower company), earlier known as Shri Lal Mahal Ltd., was incorporated as a company in the year 1997 (earlier being a proprietorship firm namely, Shiv Dayal Mai Shivnath Rai).
4. NML availed of various loan facilities from State Bank of Travancore and, thereafter, a consortium of banks including State Bank of India.
5. On 30.03.2019, the respondent bank filed Original Application under Section 19 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter the "1993 Act") which was registered as OA No. 483/2019 before the Ld. Debt Recovery Tribunal - II, Delhi claiming an amount of Rs. 916 crores against the borrower company NML and the petitioners herein.
6. On 15.07.2019, DRT-2 issued notice on the Original Application to the petitioners herein.
7. On 15.07.2019 one advocate appeared for the borrower company namely NML. On 15.07.2019, the DRT passed interim orders restraining the petitioners from alienating the mortgaged properties mentioned in their OA. Notice of the OA was directed to be issued to the petitioners (remaining unserved defendants) returnable on 27.08.2019 before the Registrar, with a direction to the petitioners to file their written statement within 30 days from the receipt of summons.
8. On 27.08.2019, an affidavit of service was filed on behalf of the respondent bank along with the proof of service of summons on the petitioners, before the Registrar. Petitioner Nos. 1 and 2 were reported to have refused to accept summons. Petitioner No. 3, Smt. Pushpa Gupta and Petitioner No. 5, Smt. Anju Goel were shown to have been served on 14.08.2019, while Petitioner No. 4, Smt. Radha Gupta was shown to be served on 19.08.2019. However, on 27.08.2019 only Counsel for the borrower company appeared. On 27.08.2019, learned Registrar after taking on record the affidavit of service filed on behalf of the respondent bank, directed the bank's counsel to give legible copy of the OA to the Counsel for the borrower company. No fresh order was passed for service of any other Petitioners herein, as all of them stood served as per the affidavit of service filed by the bank. The matter, hence, was adjourned to 16.09.2019 to be listed before the Presiding Officer for directions.
9. On 16.09.2019, the learned Presiding Officer without adverting to the affidavit of service as filed earlier, directed fresh notice to Petitioner Nos. 1 and 2 with the returnable date as 21.09.2019. On 21.09.2019, the same counsel - who had appeared for the borrower company, appeared and informed the DRT that he had already filed an application under Order 7 Rule 11 for rejection of the OA. It will be pertinent to note here that the application for rejection was jointly filed by all the defendants (including the petitioners herein), along with their individual supporting affidavits.
10. In the meanwhile, the company NML and the petitioners also filed their joint written statement cum counter-claim for Rs. 1943.63 crores on 14.10.2019.
11. Upon filing of written statement and counter-claim by the petitioners along with borrower company, the respondent bank filed 2 applications before the DRT. One of them was under section 19(25) of the 1993 Act being LA. no. 2690/2019 - seeking striking off of the written statement and counter claim file
The main legal point established in this judgment is that the timelines for filing the written statement and counter-claim under Section 19(5)(i) of the Recovery of Debts Due to Banks and Financial I....
Point of law: In appropriate cases, the courts may consider ordering prosecution otherwise it may not be possible to maintain purity and sanctity of judicial proceedings.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
