The time limit for filing a written statement under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 is mandatory, and failure to comply within the specified time frame results in the loss of the right to file a written statement.

ORDER :

Hemant Gupta, CJ.

1. The petitioners are borrowers who have availed financial assistance from the respondent Banks to the tune of Rs.14,84,98,67,873.34 (Rupees Fourteen Hundred Eighty Four Crores Ninety Eight Lakhs Sixty Seven Thousand Eight Hundred Seventy Three only). The Banks -secured creditors invoked the jurisdiction of Debts Recovery Tribunal constituted under Section 19 of The Recovery of Debts and Bankruptcy Act, 1993 (for short the ‘Act’) as amended by Central Act No. 31 of 2016 and Central Act No. 44 of 2016.

2. An application under Section 19 of the Act was presented before Debts Recovery Tribunal, Jabalpur (for short the ‘Tribunal’) on 6.4.2017. The learned Tribunal passed an order on 10.4.2017 inter-alia to show cause within 30 days of service of summons as to why relief prayed for should not be granted. The defendants were directed to file written statement with a copy to be furnished to the applicants and to appear before the Registrar on 7.6.2017 failing which the application was ordered to be heard and decided in the absence of the respondents. On 7.6.2017, the Registrar noticed that the registered notice have been sent on 26.5.2017 and that 30 days period has not been completed. Thereafter, the application was ordered to be called for hearing on 5.7.2017, when the affidavit of service was filed. On 6.7.2017, the period of 30 days for filing of response was over and, therefore, case was ordered to be placed before the Presiding Officer. It is thereafter the Presiding Officer passed an order on 22.9.2017. The order reads as under:-

“Counsel for the Defendants seeks some more time for filing of written statement. Scrutiny of record reveals that despite availing sufficient opportunities, the Defendants have not filed any written statement till date. However, in the interest of justice, one more opportunity is granted for filing of written statement subject to deposit of Rs.50 Crores by the Defendants in the loan account and deposit of Rs.02 Crores in PM National Relief Fund.

Let the matter be put up on 18.10.17 for filing of written statement.”

3. Aggrieved against the order passed, the petitioners earlier filed a petition before this Court being M.P. No. 1124/2017 [M/s Crest Steel and Power Private Limited and others Vs. Punjab National Bank and others], which was decided on 24.11.2017 with a liberty to the petitioners to avail the remedy of appeal in which the order, now impugned in the petition on 19.3.2018, was passed.

4. Learned Debt Recovery Appellate Tribunal (for short “the Appellate Tribunal”) found that the Tribunal may close or grant opportunity of filing written statement by imposing appropriate costs, but not harsh conditions. Consequently, the Appellate Tribunal considering the amendments carried out in the Act with effect from 4.11.2016, set aside the order-dated 22.9.2017 of imposing cost of Rs.50 Crores in the loan account and Rs.2 Crores in the PM National Relief Fund but did not grant any further time for filing of written statement. The finding of the Appellate Tribunal is that after the expiry of 45 days, the Tribunal was not empowered to provide another opportunity to the petitioners to file written statement.

5. The argument of learned counsel for the petitioner is that in terms of the Supreme Court judgment reported as Kailash Vs. Nanhku and others, 2005 (4) SCC 480, the condition of filing written statement in a time frame is not mandatory. Therefore, not permitting the petitioner to file written statement beyond 45 days is failure of justice, as the petitioner would not be able to contest the claim of the Bank in a fair and proper manner.

6. Learned counsel for the petitioner also argued that in terms of Section 19(25), the Tribunal has jurisdiction to pass such order so as to prevent abuse of process or to secure the ends of justice. Therefore, even if the time limit to file written statement is prescribed, under sub-section (5) of Section 19 of the Act, but Tribunal has inherent jurisd