The Debts Recovery Tribunal has jurisdiction to set aside ex parte decrees under the Recovery of Debts Due to Banks and Financial Institutions Act.

1. This Civil Revision Petition is directed against the order dated 17 May, 2005 in U.R.A.No.7 of 2005 on the file of Debts Recovery Appellate Tribunal, Chennai setting aside the ex parte decree dated 5 January, 2000 in T.A.No.918 of 1997 and directing the Debts Recovery Tribunal to dispose of the Original Application afresh on merits.
The facts:

2. M/s. Indian Bank, Pollachi Branch - the revision petitioner herein sanctioned financial assistance to respondents 1 and 2 under term loan scheme for raising coffee crops and other plantation crops in their estate at Pollachi. The Bank disbursed a sum of Rs.3,08,000/- on 3 November 1980 after securing equitable mortgage of the property, which is the subject matter of the revision petition.

3. The respondents 1 and 2 (hereinafter referred to as "borrowers") failed to honour their commitments. This made the Bank to file a suit before the learned Subordinate Judge, Udumalpet in O.S.No.295 of 1995 claiming a decree for a sum of Rs.13,08,286.75 with interest at 18.50% per annum. The borrowers entered appearance in the said suit and took time to file written statement. Since written statement was not filed before the prescribed date, the learned Subordinate Judge was pleased to declare the borrowers ex parte on 5 July 1996.

4. The borrowers thereafter filed an application on 9 July, 1996 in I.A.No.817 of 1996 to set aside the ex parte decree. The application was kept pending. In the meantime, the parliament enacted Recovery of debts due to Banks and Financial Institutions Act, 1993 and after coming into force of the said Act, the proceedings before the Subordinate Judge, Udumalpet was transferred to the Debts Recovery Tribunal at Chennai. The application filed by the borrowers to set aside the ex parte decree was also transmitted to the Debts Recovery Tribunal along with the material papers in O.S.No.295 of 1995. The matter was kept in cold storage. Finally, the Debts Recovery Tribunal (hereinafter referred to as "DRT") was pleased to pass an order on 5 January 2000 granting a recovery certificate in favour of the Bank. The DRT opined that the Tribunal cannot set aside the ex parte decree passed by the Civil Court and as such there was no other option except to accept the decree passed by the Subordinate Court, Udumalpet and to grant a recovery certificate permitting the Bank to recover a sum of Rs.16,58,787.65 with future interest at 18.5% per annum.

5. The order passed by the DRT was challenged before this Court in W.P.No.24497 of 2001. The said writ petition was dismissed on the ground of alternative remedy. However, the borrowers were given two weeks' time to file an appeal before the Debts Recovery Appellate Tribunal (hereinafter referred to as "DRAT") and the parties were given liberty to raise all grounds before DRAT. Accordingly, the borrowers filed an appeal before DRAT in U.R.A.No.7 of 2005.

6. The DRAT found that the borrowers have filed the application before the learned Subordinate Judge, Udumalpet within the time permitted by law to set aside the ex parte decree invoking Order IX R.13 of the Code of Civil Procedure. It was only during the pendency of the said petition, Recovery of debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "RDDBI Act") came to be passed with effect from 24 June, 1993. According to DRAT, S.31(1) of RDDBI Act gives jurisdiction to the DRT to pass appropriate orders consequent to the transfer of proceedings. Therefore, DRT was within the jurisdiction to take up the application filed by the borrowers to set aside the ex parte decree. DRAT also found that, in the meantime, the mortgaged property was sold by the Bank in favour of third respondent