IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Jaswant Singh, Sant Parkash, JJ.
M/s Kaur Sain Spinners Limited & Others - Appellant
Versus
Debts Recovery Tribunal-iii, Sector 17, Chandigarh - Respondent
Civil Writ Petition No. 3655 of 2021
Decided On : 06-04-2021
Natural Justice - Recovery of Debts & Bankruptcy Act - Section 19 - Summary Judgment - [NATURAL JUSTICE] - [RECOVERY OF DEBTS & BANKRUPTCY ACT] - [Section 19] - The court dismissed the application seeking extension of time to file a written statement, holding that the defendants had lost their right to file a written statement by failing to do so within 30 days. The court found that the defendants' conduct was intended to delay the proceedings, and they had an effective remedy before the Debts Recovery Appellate Tribunal. The court also emphasized that the High Court should insist on exhausting remedies available under the relevant statute before entertaining a petition under Article 226 of the Constitution.
Fact of the Case:
The petitioners, a private limited company and its close relatives, approached a bank for credit facilities, which were granted, renewed, and enhanced. The bank declared the loan account as a Non Performing Asset (NPA) due to defaults in repayment. The bank filed a recovery suit under Section 19 of the Recovery of Debts & Bankruptcy Act, claiming an amount allegedly due. The defendants were proceeded ex parte for failing to file a written statement within the prescribed period.
Finding of the Court:
The court found that the defendants had lost their right to file a written statement by failing to do so within 30 days. The court also noted the defendants' conduct was intended to delay the proceedings and emphasized that they had an effective remedy before the Debts Recovery Appellate Tribunal.
Issues: The main issue was whether the defendants had lost their right to file a written statement by failing to do so within the prescribed period.
Ratio Decidendi: The court held that the defendants had lost their right to file a written statement by failing to do so within 30 days. The court also emphasized that the High Court should insist on exhausting remedies available under the relevant statute before entertaining a petition under Article 226 of the Constitution.
Final Decision: The petition was dismissed with liberty to the petitioners to approach the appropriate authority for redressal of their grievance.
JUDGMENT
Sant Parkash, J. - The present writ petition has been preferred under Article 226/227 of the Constitution of India praying for issuance of a writ in the nature of certiorari for setting aside order dated 24.07.2019 (Annexure P-14) and order dated 02.03.2020 (Annexure P-16) passed by respondent Nos.1 and 2, vide which petitioners have been proceeded ex- parte and recovery certificate issued. Further prayer is to issue a writ in the nature of mandamus, directing respondent No.1 to allow the petitioners to join the proceedings; allow them to file written statement and contest Original Application No.3000/2018 filed by respondent No.3 under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993 (for short, "1993 Act"); as also to stay further proceedings emanating out of impugned order dated 02.03.2020.
2. Petitioner No.1 is a private limited company incorporated under the provisions of the Companies Act, 1956 and running the business of spinning, having registered office at Village Arrincha, Post Offfice Doraha, Tehsil Payal, District Ludhiana. Petitioner Nos.2 to 5 are close relatives and reside in Village Arrincha, Post Offfice Doraha, Tehsil Payal, District Ludhiana except petitioner No.3 Sanjay Mittal, who resides in House No.510-11 B, Aggar Nagar, Ludhiana. Petitioner No.2 Pawan Kumar, is one of the Directors of M/s Kaur Sain Spinners Limited. Petitioner No.3 Sanjay Mittal, is the son of late Rajinder Kumar (defendant No.3 in OA No.3000/2018 before the Debts Recovery Tribunal-III, Chandigarh). Petitioner No.4 Urmila Rani, is widow of late Rajinder Kumar and petitioner No.5 Suman Rani is wife of petitioner No.2 (Pawan Kumar).
3. Succinctly, petitioners set up a Spinning Mill at Ludhiana and approached respondent No.3 Central Bank of India, for availing credit facilities, which were granted, renewed and enhanced from time to time. On 29.12.2017, respondent No.3 declared the loan account of petitioners as Non Performing Asset (NPA) on account of defaults in repayment of loan.
4. On 11.12.2018, respondent No.3 Central Bank of India filed a recovery suit viz. Original Application No.3000 of 2018 (Annexure P-1) titled "Central Bank of India vs. M/s Kaur Sain Spinners Limited & others" before respondent No.1 Debts Recovery Tribunal III, Sector 17, Chandigarh (for short, "DRT"), under Section 19 of 1993 Act, claiming an amount of ' 49,44,65,248/-, allegedly due on 10.12.2018 alongwith pendent lite interest. The petitioners were arrayed as defendant Nos.1, 2 and 4 to 8. Notice in the OA was issued on 31.12.2018. On 24.05.2019, defendant Nos.1 and 10 appeared through counsel, and defendant Nos.2 and 4 to 8 were proceeded ex parte. On 01.06.2019, Bank (respondent No.3 herein) filed one IA alongwith death certificate of deceased defendant No.3 and list of legal heirs which was taken on record and applicant Bank was directed to supply complete copy of paper book to counsel for defendant Nos.1 and 10 to enable them to file written statement on the next date of hearing i.e. 01.07.2019. On 01.07.2019, none appeared on behalf of defendant Nos.1 and 10. Their right to file written statement was closed and they were proceeded against ex parte. However, IA No.360 of 2019 was filed on behalf of Oriental Bank of Commerce seeking setting aside of ex parte order, which was allowed.
5. On 09.07.2019, defendant/petitioner No.1 filed IA No.384 of 2019 (Annexure P-4) seeking extension of time to file written statement beyond the period of 30 days in view of provisions of Section 19 (5)(i) of 1993 Act, according to which, time could be extended by another period of 15 days. On 09.07.2019 itself, IA Nos.382, 383, 385, 387, 388 and 389 of 2019 were filed on behalf of defendant Nos.2 and 4 to 8 seeking setting aside of ex parte order dated 24.05.2019, taking a plea that they had appointed a counsel to represent them before the Tribunal and further, copy of paper book i.e. Original Application had not been supplied, as provided under Rule 11 of the
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