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2010 Supreme(MP) 167
AIR 2010 MP 173
IN THE HIGH COURT OF MADHYA PRADESH
A.K. Shrivastava and R.S. Jha, JJ.
Suresh Sharma – Appellant
Vs.
Punjab and Sindh Bank and Ors. – Respondent
W.P. No. 2422 of 2009
Decided On: 19.02.2010
The main legal point established in the judgment is the scope of review under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and the limitations on the grounds for review.
Headnote:
Review Application - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Section 22(2)(g), Section 26(2) - The court discussed the provisions of Section 22(2)(g) and Section 26(2) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. It highlighted the power of review vested in the Tribunal and the Appellate Tribunal, and the scope of review under the Act. The court also emphasized the need for the material to be available at the time of the initial decision and the limitations on the grounds for review.
Fact of the Case:
The Petitioner filed a petition seeking to quash the order passed by the Debt Recovery Appellate Tribunal in a recovery suit filed by the Bank. The suit was transferred to the Debts Recovery Tribunal, and the Petitioner sought to set aside an ex parte judgment and correction of a certificate under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
Finding of the Court:
The court found that the impugned order of the Debts Recovery Appellate Tribunal, which allowed the review application and re-opened the original suit, was arbitrary and de hors to the provisions of the Act. The court set aside the impugned order and restored the order allowing the review application and the order dismissing the appeal filed by the Bank.
Issues: The issues involved the rejection of the Petitioner's applications for setting aside an ex parte judgment and correction of a certificate, the subsequent review application, and the impugned order of the Debts Recovery Appellate Tribunal.
Ratio Decidendi: The court held that the impugned order of the Debts Recovery Appellate Tribunal was arbitrary and not in line with the provisions of the Act. It emphasized the need for the material to be available at the time of the initial decision and the limitations on the grounds for review.
Final Decision: The petition was allowed, and the impugned order was set aside. The order allowing the review application and the order dismissing the appeal filed by the Bank were restored.
A.K. Shrivastava, J.
1. This petition under Article 227 of the Constitution of India has been filed on behalf of the Petitioner seeking following reliefs:
In the facts and circumstances of the case, this Hon. Court may be pleased to issue a writ in the nature o
(i) Certiorari quashing the order, dated 27-1-2009, (Annexure P/16) passed by Debt Recovery Appellate Tribunal in Appeal Sr. No. 54 of 2007;
Any other order or orders that this Hon. Court deems fit and proper in the facts and circumstances of the case may also kindly be passed.
2. The unfolded facts are as under:
(A) 1-5-2008/AnnexureP/l. Respondent/ Bank filed a suit for recovery of Rs. 64,09,718/- against Respondent No. 2 company and in that suit, present Petitioner was arrayed as Defendant No. 4. The suit was transferred to the Debts Recovery Tribunal (hereinafter, referred to as "DRT"), on account of its establishment.
(B) 12-7-2004/Annexure P/2. Petitioner filed an application for setting aside ex parte judgment under Section 22(2)(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter, referred to as the Act of 1993) on the ground of non-service of notice after transfer of the case to DRT.
(C) October, 2004/Annexure P/3. Petitioner submitted an application for correction of the certificate under Section 26(2) of the Act of 1993 on the ground that the Petitioner had not executed any personal guarantee, and therefore, could not have been held personally liable to pay the amount due to the Bank.
(D) 13-11-2004/Annexure P/4. The Bank filed reply and refuted the averments.
(E) 4-2-2005/Annexure P/5. Application for setting aside ex parte judgment dismissed as no sufficient ground was made out to condone the delay.
Application for correction under Section 26(2) rejected as prayer made is found to be beyond the scope of Section 26(2) of the Act of 1993. The DRT further observed that as no appeal or review of the judgment has been filed, no relief can be granted.
(F) R. A. No. 2 of 2005. February, 05/ Annexure P/6. Petitioner filed review of the judgment of DRT on the ground that since admittedly no personal guarantee is given by the Petitioner, he could not be held jointly and severally (personally) responsible to pay the dues of the Bank.
(G) 9-7-1999/Annexure P/7. Affidavit of Shashi Paul Lakhwara filed as the sole affidavit in the transfer application. In para 5, it has been stated that personal guarantee has been executed by Defendants No. 2, 3 and 5.
(H) May, 2005/Annexure P/8. Against the application for review, reply was filed by the Bank (Respondent No. 1) along with two documents, they are:
(i) Agreement, dated 10-4-1995 (D/1-A) and
(ii) Memorandum of understanding (D/1-B).
These documents were not filed in the original suit in which ex parte decree was passed against the Petitioner.
(I) 4-8-2005/Annexure P/9. Review petition was allowed by the DRT and the Petitioner was absolved from personal liability. Above documents D/l-A and D/l-B held since they were not filed in Transfer application, cannot be relied upon by the Bank in review application (Paras 10 to 13 and 17).
(J) Appeal No. 593/05.
13-10-2005/Annexure P/10. Appeal filed by the Bank before the Debts Recovery Appellate Tribunal against the order allowing review application by the DRT.
(K) 26-2-2007/Annexure P/12. Appeal was dismissed bi-parte by the Debts Recovery Appellate Tribunal, further holding that the DRT justified in reviewing the judgment.
(L) Appeal SR 54/07 (Review by the Bank) 5-4-2007/Annexure P/12. The Bank filed review before the Debts Recovery Appellate Tribunal which was barred by time seeking relief upon the following documents which were not even the part of Transfer Application (Original Suit) and they were not even filed before the Debts Recovery Appellate Tribunal also in the earlier appeal No. 593/05; they are:
i. Resolution dated 31-5-1995 authorising the Petitioner to operate the account.
ii. Order dated 14-11-1995 passed in Writ Petition No. 939/95 (referred
