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2025 Supreme(Online)(KER) 959

HIGH COURT OF KERALA
N. NAGARESH, J
NIMMI JOHN CHACKOLA – Appellant
Versus
CANARA BANK (ERSTWHILE SYNDICATE BANK) – Respondent
OP (DRT) 20/2024



Advocates:
B.JAYASANKER, SHYAM KUMAR K.T., PREMJIT NAGENDRAN

The Debts Recovery Tribunal must ensure that recovery orders are directed only against parties legally liable under the decree, and non-parties cannot be held accountable.

Headnote:

(A) Recovery of Debts due to Banks and Financial Institutions Act, 1993 - Sections 19(1) and 31A - Original Petition to set aside order of Debts Recovery Tribunal - Petitioners, not parties to original decree or appeal, challenge the Tribunal's order allowing recovery against them - The Tribunal must reconsider the issues afresh as the petitioners were not parties to the decree. (Paras 24)

(B) Jurisdiction of Debts Recovery Tribunal - The Tribunal's duty to ensure that the amount is legally recoverable from the parties arrayed in the Original Application is emphasized. (Paras 22)

Facts of the case:
The petitioners, heirs of John J. Chackola, challenge the Debts Recovery Tribunal's order allowing recovery against them, asserting they were not parties to the original suit or appeal. (Paras 1-4)

Findings of Court:
The Debts Recovery Tribunal's order is set aside, and the Tribunal is directed to reconsider the matter afresh. (Paras 24)

Issues: Whether the petitioners, as non-parties to the original decree, can be held liable for the recovery order. (Paras 22)

Ratio Decidendi: The court ruled that the Tribunal must ensure that the parties against whom recovery is sought are legally liable, and the petitioners were not parties to the original decree or appeal. (Paras 22)

Result: The order of the Debts Recovery Tribunal is set aside and the matter is to be reconsidered.

JUDGMENT :

(N. NAGARESH, J.)

The petitioners, who are the wife and children of John J. Chackola, have filed this Original Petition seeking to set aside Ext.P9 order of the Debts Recovery Tribunal-1, Ernakulam and consequently dismiss O.A. No.11 of 2008 as against the petitioners.

2. The petitioners state that father of the said John J. Chackola, late Joseph J. Chackola, was a guarantor to the credit facility availed by M/s. United Cochin Steel Re- Rollers Private Ltd. from the Syndicate Bank, which is now merged with the Canara Bank. After the demise of Joseph J.Chackola, the Syndicate Bank filed O.S. No.168 of 1979 in the 3rd Additional Sub Court, Ernakulam. The suit was filed to recover Rs.27,64,250.81. The suit was decreed on 30.03.1985, allowing the Bank to recover Rs.27,64,250.81 with future interest at the rate of 6% per annum, personally from the 2nd defendant (Samuel John) and from defendants 3 to 5 to the extent of the properties inherited by them from Joseph J. Chackola, and also by way of sale of plaint A and B scheduled property.

3. M/s. United Cochin Steel Re-rollers Private Limited filed A.S. No.201 of 1988 before the High Court. No order was given by the Court staying execution of the Decree. Therefore, the time for execution of the Decree started running from 30.03.1985, contend the petitioners. Pending the appeal, the 2nd defendant Samuel John passed away. The petitioners state that as per order dated 05.06.1995, the Court recorded that the 2nd defendant in the suit died and that no legal representatives are to be impleaded. Thereafter, the 6th respondent (who was the 5th defendant in the Suit) was also removed from the party array in the appeal as per order dated 25.03.1988. Since the legal representatives of the 3rd respondent were not impleaded in the appeal and since the 6th respondent was removed from the party array, what was pending before the Court was only an incompetent appeal abated by operation of law, contend the petitioners.

4. The petitioners state that none of the parties to the appeal did point out the abatement of the appeal, to this Hon’ble Court. While so, Sri.John J. Chackola, the predecessor in interest of the petitioner and who was the 3rd defendant in the Suit and 4th respondent in the appeal, also died on 08.03.1994. By the time, the appeal had abated and no steps were taken to set aside the abatement and to implead the petitioners. Ultimately, without noticing that the appeal had already been abated, this Court heard the appeal and the appeal was dismissed on 15.10.1998. Ext.P3 Decree passed in an appeal which had already abated, is non-est. The petitioners herein are not parties to the Decree.

5. The Bank on 30.11.2007 filed Ext.P4 O.A.under Section 19 (1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 , before the Debts Recovery Tribunal-1, Ernakulam. The O.A. was filed arraying Annamma Chackola, the 5th respondent in the appeal as 1st defendant, Joseph Chackola who was removed from the party array in the appeal as 2nd defendant and the petitioners herein who were not parties either in the Original Suit or in the appeal as legal representatives of John J. Chackola. None of the legal representatives of late Samuel John, were arrayed in the O.A.

6. The petitioners state that an application filed under Section 19 (1) read with Section 31A for recovery of an amount under a Decree or Order passed by any Court before the commencement of the Recovery of Debts due to Bank and other Financial Institutions (Amendment) Act, 2020 and that has yet not been executed, is an original proceedings and the jurisdiction of the Tribunal is only to issue a Certificate of Recovery to a Recovery Officer in terms of the Decree and on receipt of a Certificate, the Recovery Officer shall proceed to recover the amounts as if it was a Certificate in respect of a debt recoverable under the Act.

7. The petitioners would further submit that in calculating the limitation for filing Ext.P4 O.A.

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