2011 Supreme(Mad) 3507
HIGH COURT OF JUDICATURE AT MADRAS
D. MURUGESAN & K.K. SASIDHARAN
M. Asiya Banu & Others
Versus
Punjab National Bank Mylapore Branch & Others
W.P.Nos.13710 & 15292 to 15297 of 2011
Decided on : 03-08-2011
For the Petitioner:M. Krishnappan, Senior Counsel for G.RM. Palaniappan, R. Thiagarajan, S.D.S. Phillip, Advocates.
For the Respondents:R1 - L. Ganesh, R3 to R5 - R. Thiagarajan, R7 - S.V. Jayaraman, Senior Counsel for R. Meenalochini, R. Karthikeyan, R.S. Jeevarathinam, Senior Counsel for R4 to R6 - T.D.K. Govindarajan, Advocates.
The judgment emphasizes the importance of timely action, compliance with procedural rules, and the need to show sufficient cause for condonation of delay in legal proceedings.
Headnote:
Recovery of Debts Due to Banks and Financial Institutions Act - Loan default - Section 19 - Summary of Acts and Sections: The court discussed the provisions of Section 19(4) and 19(21) of the Recovery of Debts Due to Banks and Financial Institutions Act, and Rule 11 and 16 of the Debts Recovery Tribunal (Procedure) Rules. The court also referred to the Limitation Act and relevant case laws on condonation of delay.
Fact of the Case:
M/s Maharaja Timber Traders availed loans from a bank, defaulted in repayment, and the bank filed an application for recovery. The guarantors, including the petitioners, sought to set aside the ex parte final order and condone the delay.
Finding of the Court:
The court found that the petitioners were served with summons, had knowledge of the proceedings, and failed to explain the delay in filing applications to set aside the ex parte decree. The court dismissed all writ petitions and connected motions.
Issues: Service of summons, condonation of delay, compliance with procedural rules, and suppression of facts.
Ratio Decidendi: The court held that the petitioners failed to show sufficient cause for the delay, suppressed facts, and did not provide valid grounds for contesting the original application. The court also emphasized the importance of compliance with procedural rules and the need for timely action.
Final Decision: All writ petitions and connected motions were dismissed by the court.
D. MURUGESAN, J.
1. As the issues raised in all the writ petitions are same, they are taken up together for disposal by this common order.
2. M/s Maharaja Timber Traders, Chennai availed loan of Rs.150 lakhs from Nedungadi Bank Limited, presently known as Punjab National Bank, Mylapore branch during the year 1998. Thiru V.M.S.Jafarullah was the proprietor of the said firm. The writ petitioners, numbering four, stood as guarantors and they deposited the original title deeds pertaining to the secured asset. In the year 1999, the firm availed additional loan facility to the tune of Rs.50 lakhs. The firm, thereafter, availed additional loan facility of Rs.75 lakhs in the year 2000 and ultimately the total loan availed by the firm was Rs.300 lakhs and all the petitioners stood as guarantors for the entire amount of Rs.300 lakhs and necessary deeds of mortgage were also executed.
3. Thiru V.M.S.Jafarullah, the proprietor of the firm defaulted in repayment of the loan. On the above averments and the default, the first respondent bank filed the original application before the Debts Recovery Tribunal-I, Chennai under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for recovery of a total sum of Rs.1,29,72,700/- and Rs.48,86,890/-together with interest at the rate of 20% per annum with quarterly rests due in respect of Import Letters of Credit and Rs.96,73,619/- together with interest at the rate of 20% per annum with quarterly rests due in respect of Cash Credit from the date of application till the date of realisation and for sale of the Schedule 'A' to 'E' properties mentioned thereunder. On the ground that the writ petitioners, who were the defendants in the O.A., remained absent, they were set ex parte on 19.2.2008 and ultimately the Debts Recovery Tribunal-I, in its final order dated 4.4.2008 decreed the suit as prayed by the bank. Thiru V.M.S.Jafarullah, the proprietor of the firm alone contested the suit.
4. On the ground that no summons were served on the petitioners in the Original Application and they were not aware of the order setting them ex parte and consequently final orders having been passed against them, they filed individual applications before the Debts Recovery Tribunal-I, Chennai seeking to set aside the ex parte final order together with the applications for condoning the delay. For more details as to the number of days delay, we may point out that the petitioner in W.P.No.13710 of 2011 filed an application to condone the delay of 480 days in filing the application to set aside the ex parte decree. Likewise the petitioners in W.P.Nos.15292 to 15297 of 2011 filed applications to condone the delay of 480, 479 and 480 days respectively in filing the applications to set aside the ex parte decree during July, 2009. All the applications were dismissed by the Debts Recovery Tribunal-I in its order dated 13.7.2010. Hence, they filed appeals before the Debts Recovery Appellate Tribunal challenging the order of dismissal of the applications for condoning the delay. The Debts Recovery Appellate Tribunal has also dismissed the appeals by its order dated 31.5.2011. The above orders are questioned by the petitioners in these writ petitions.
5. We have heard Mr.M.Krishnappan, learned senior counsel for the petitioner in W.P.No.13710 of 2011, Mr.R.Thiagarajan, learned counsel for the first and second petitioners in W.P.Nos.15292 to 15294 of 2011 and for the petitioners in W.P.Nos.15295 & 15297 of 2011 and for the respondents 3 to 5 in W.P.No.13710 of 2011, Mr.S.D.S.Philip, learned counsel for the third petitioner in W.P.Nos.15292 to 15294 of 2011 and for the petitioner in W.P.No.15296 of 2011, Mr.L.Ganesh, learned counsel for the first respondent bank, Mr.S.V.Jayaraman and Mr.R.S.Jeevarathinam, the respective learned senior counsel for the respondents-auction purchasers and Mr.R.Karthikeyan, learned counsel for the seventh respondent in W.P.Nos.15292 to 15294 of 2011.
6. The first c