The tribunal has the power to impose costs but cannot impose conditions that would make it impossible for the party to comply, in setting aside an ex parte order.

Gangele, J.

This petition has been filed by the petitioners against the order dated 12-03-2013 (Annexure P-1) passed by Debts Recovery Appellate Tribunal, Allahabad and the order dated 17-12-2012 (Annexure P-2) passed by Debts Recovery Tribunal, Jabalpur.

2. One private limited Company-M/s. Shrinivas Synthetic Packers (P) Ltd. advanced cash credit limit/hypothication limit by the respondent No.1- Bank. The petitioners were Directors of the Company at the relevant time. Various documents were executed by the Company including the petitioners as guarantee of loan amount. An amount of Rs.8,86,75,238=69 was due against the Company. On 16-09-2011, the Bank filed original application for recovery of the aforesaid amount under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred as to “the Act of 1993”). The aforesaid application was registered as O.A. No.275/2011. The Office of the tribunal issued notices to the petitioners on 29-09-2011, but nobody appeared before the tribunal. The notices were published in the newspaper on 08-01-2012 and the date of appearance was fixed 16-02-2012. The counsel on behalf of the petitioners appeared before the Registrar and filed his memo but no Vakalatnama was filed. The Registrar granted time to file Vakalatnama and next date was fixed on 14-03-2012. The counsel did not appear on the aforesaid date, hence, the case was placed before the Presiding Officer. Then the tribunal proceeded ex parte against the petitioners vide order dated 12-04-2012. The case was fixed on 15-05-2012 and 17-07-2012, however, on the aforesaid dates, hearing could not take place. On 14-08-2012, the counsel filed his Vakalatnama on behalf of the petitioners and he came to know that the petitioners were proceeded ex parte. On 14-09-2012, an application for setting aside the ex parte order dated 12-04-2012 was filed by the petitioners along with an affidavit. The Debts Recovery Tribunal vide order Annexure P-2 permitted the petitioners to contest the claim subject to deposit an FDR of Rs.1 crore each in the name of the Registrar, Debts Recovery Tribunal within a period of thirty days. Against the aforesaid order, an appeal was filed before the Debts Recovery Appellate Tribunal. Learned appellate tribunal vide order Annexure P-1 modified direction of the Debts Recovery Tribunal in regard to depositing an amount of Rs.1 crore each and directed to deposit an amount of Rs.50 lacs each to the petitioners.

3. Learned counsel appearing on behalf of the petitioners has contended that the conditional order passed by the tribunal in regard to permitting to contest the case, is contrary to law and the tribunal has no jurisdiction and power to impose condition in a pending proceeding. He further submitted that by imposing the condition the tribunal has made impossible to the petitioners to contest the case because the condition is stringent. He further submitted that a substantial amount has been recovered by the Bank in pursuance to the proceeding initiated by the Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short “the SARFAESI Act”). Learned counsel further submitted that when the proceeding had taken place, the petitioners already made their appearance before the Presiding Officer, hence, the order of ex parte was illegal. In support of his contentions, learned counsel relied on the following judgments:

(I) Moin Leather Wear Exports & others v. Oriental Bank of Commerce, Chennai, 2012 (2) DRTC 829 (Mad);

(II) M/s. Jholei Baba Agency v. State Bank of India, AIR 2009 Orissa 109;

(III) G. L. Vijain v. K. Shankar, (2006) 13 SCC 136 : (AIR 2007 SC 1103);

(IV) Great Punjab Agro Industries Ltd. v. Khushian and others, (2005) 13 SCC 503;

(V) Vijay Kumar Madan and others v. R.N. Gupta Technical Education Society and others, AIR 2002 SC 2082; and

(VI) Suresh Bansal v. Bank of India & others [unreported order dated