IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
UJJAL BHUYAN, CHILLAKUR SUMALATHA, JJ.
M/s Ravali Industries Pvt. Ltd., rep. by its Prop. Yelle Ravali, W/o. K. Krishna Chaitanya & Ors. - Petitioners
Versus
State Bank of India, rep. by its Authorised Officer & Ors. - Respondents
Writ Petition No. 27639 of 2021
Decided On : 11-11-2021
Constitution of India,1950 - Article 226 - Loan - Debts Recovery - Petitioners had availed loan from respondent No. 1 - State Bank of India, but defaulted in repayment of same - For recovery of loan amount, respondent No. 1 - State Bank of India filed the original application before Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, which has been registered as O.A. No., wherein petitioner No. 1 herein has been arrayed as respondent - Petitioner No. 1 failed to file written statement not only within thirty days period of limitation, but also within extended period of limitation of further fifteen days, where-after, Tribunal passed an order dated foreclosing filing of written statement by respondent (petitioner No. 1) and directing that O.A. No. shall proceed ex parte against respondent - Whether Section 13(2)(a) of 1986 Act providing for time line of 30 days to file response by respondent extendable by a period not exceeding 15 days, should be read as mandatory or directory? – Held, This is in contradistinction to provisions of 1986 Act, whereby and where-under, it is consumer, who seeks relief against defaulting service provider, which is not case under 1993 Act, as well as under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Likewise, in a case of commercial insolvency, legislature has provided strict period of limitation - Court are of view that Tribunal erred in holding that it had no power to extend time for filing written statement beyond 45 days - Of-course, whether to condone delay or not, in the given facts and circumstances of a case, is a different question altogether - Court set aside impugned docket order dated and remand matter back to Tribunal for a fresh hearing and decision on I.A. No. 404 of 2020 filed by petitioner No. 1 - Same shall be carried out within a period of six weeks from date of receipt of a copy of this order - Writ petition is disposed of accordingly.
ORDER :
Ujjal Bhuyan, J.
Heard Ms. P. Hamsa Durga, learned counsel for the petitioners and Sri Maruthi Jadhav, learned counsel appearing on behalf of M/s. Pearl Law Associates for the respondent No. 1 - State Bank of India.
2. This petition has been filed under Article 226 of the Constitution of India assailing the legality and validity of the docket order dated 06.10.2021 passed by the Debts Recovery Tribunal - I at Hyderabad (Tribunal) dismissing I.A. No. 404 of 2020 filed by the petitioner in O.A. No. 587 of 2019.
3. Though not specifically pleaded, it can be gathered from the pleadings and other materials on record that petitioners had availed loan from respondent No. 1 - State Bank of India, but defaulted in repayment of the same. For recovery of the loan amount, respondent No. 1 - State Bank of India filed the original application before the Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, which has been registered as O.A. No. 587 of 2019, wherein petitioner No. 1 herein has been arrayed as the respondent.
3.1 It further appears that petitioner No. 1 failed to file the written statement not only within the thirty days period of limitation, but also within the extended period of limitation of further fifteen days, where-after, the Tribunal passed an order dated 30.01.2020 foreclosing filing of written statement by the respondent (petitioner No. 1) and directing that O.A. No. 587 of 2019 shall proceed ex parte against the respondent.
3.2 For recalling the aforesaid ex parte order, respondent (Petitioner No.1) filed an interlocutory application before the Tribunal, which was registered as I.A. No.404 of 2020.
3.3 By the impugned docket order dated 06.10.2021, Tribunal dismissed the interlocutory application holding that it has no power to extend the time line for filing of the written statement beyond forty five days. However, it was clarified that respondent (petitioner No.1) could participate in the proceedings of O.A.No.587 of 2019, and advance arguments.
3.4 It is this order which has been challenged in the present proceeding.
4. Learned counsel for the petitioners submits that Tribunal was not justified in dismissing the interlocutory application of the petitioner. She submits that though under Section 19(5) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993), since rechristened as Recovery of Debts and Bankruptcy Act, 1993 (briefly ‘the 1993 Act’ hereinafter) there is a time limit of thirty days in filing of written statement by the defendant, which is extendable for a further period of fifteen days, Section 22 of the said Act clarifies that the Tribunal or the Appellate Tribunal would not be bound by the procedure laid down under the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice.
4.1 According to her, principles of natural justice mandates that a reasonable opportunity of hearing should be afforded to the defendant, which includes filing of written statement, even if necessary, by relaxing the period of limitation.
4.2 Therefore the Tribunal was not justified in foreclosing filing of written statement by the respondent holding that it did not have the competence to condone the delay beyond the extended period of limitation.
5. On the other hand, learned counsel for respondent No. 1 submits that the time line provided under Section 19(5) of the 1993 Act is required to be adhered to strictly. Legislative intent is very clear. Initially thirty days time is provided to the defendant to file written statement and for exceptional circumstances, the said period of thirty days can be extended by a further period, not exceeding fifteen days. In all, defendant has time of forty five days to file the written statement. Beyond that, there is no provision extending the limitation for filing written statement. Therefore, view taken by the Tribunal is correct and no interference is called for.
5.1 In support of his submissions le
New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage(P) Ltd.
The main legal point established in this judgment is that the timelines for filing the written statement and counter-claim under Section 19(5)(i) of the Recovery of Debts Due to Banks and Financial I....
The main legal point established in the judgment is that the period of limitation for filing an application to set aside an ex-parte order before the Tribunal shall be 30 days, and there would be no ....
The provision of Order VIII Rule 1 is directory and not mandatory, and the court has the power to extend the time for filing the written statement beyond the time schedule provided.
The court affirmed that procedural rules regarding the filing of written statements can be interpreted flexibly to ensure justice, allowing extensions in exceptional circumstances.
Amendments to pleadings are permissible to ensure justice, and acceptance of belated written statements is allowed in exceptional circumstances, provided reasons are recorded.
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