IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 13.02.2008 CORAM THE HONOURABLE MR. JUSTICE S.J.MUKHOPADHAYA AND THE HONOURABLE MR. JUSTICE M.VENUGOPAL C.R.P. (PD) NO. 693 OF 2006 M/s.Tamil Nadu Mercantile Bank Limited, rep. by its Manager, T.T.K. Road Branch Royapettah, Chennai 600 014. .. Petitioner - Vs - Mrs. G.Vijayalakshmi .. Respondent Civil Revision Petition filed against the order dated 21.03.2006 passed by the Debts Recovery Appellate Tribunal, Chennai in M.A. No.40 of 2006 as stated therein. For Petitioner : Mr. S.Sethuraman For Respondent : Mr. P.S.Raman, SC, for Mr.P.Seshadri ORDER S.J.MUKHOPADHAYA, J. This revision application has been preferred by the petitioner, Tamil Nadu Mercantile Bank (hereinafter referred to as the 'Bank') against order dated 21st March, 2007, passed by the Debts Recovery Appellate Tribunal (hereinafter referred to as 'Appellate Tribunal') in M.A. No.40/06. By the said order, the Appellate Tribunal imposed cost of Rs.5,000/= on respondent and set aside the order dated 27th Feb., 2006, passed by the Debts Recovery Tribunal – I, Chennai (hereinafter referred to as 'Tribunal') with further direction to respondent to deposit the principal amount of Rs.4 lakhs together with simple interest @ 19.89% p.a. 2. According to the petitioner, the petition to set aside the ex-parte decree as was preferred by the respondent before the Tribunal was rightly rejected, being barred by limitation. The Appellate Tribunal had no jurisdiction to go into the merit of the main suit for setting aside the order passed by the https://hcservices.ecourts.gov.in/hcservices/ Tribunal without determining the question whether the petition to set aside the ex-parte decree as was filed by respondent was barred by limitation or not. 3. According to the bank, the petitioner is the guarantor, whereas defendants 1 to 4 before the Tribunal were the borrowers. It appears that at the instance of the bank, an original application was registered before the Tribunal, which passed ex-parte decree on 20th April, 2002. In the said case, the respondent filed a petition to set aside the decree with a petition to condone the delay of 62 days, if counted from the date of knowledge. The respondent took plea that from the notice published in the newspaper, "Dinamalar" on 24th April, 2005, she could come to know from her son that she was impleaded as defendant in O.A. No.124/00 preferred by the bank. She entered appearance on 2nd May, 2005, and on inspection of the original records through counsel, she could come to know that the bank filed the said application for recovery of certain amount made by the bank in favour of defendants 1 to 4. In the said case, she was shown as the guarantor. She took plea before the Tribunal that she never stood as guarantor of defendants 1 to 4, who with active connivance of the bank, had created documents as if she stood as guarantor for the loans granted in their favour. Further case of the respondent was that she took personal loan of Rs.4 lakhs and registered deed of simple mortgage was executed by her in favour of the bank on 8th May, 1996. Later on, she could come to know that the bank subsequently granted loan amount in favour of defendants 1 to 4 in 1997 and in the said transaction she was shown to have mortgaged the property, though she was not the guarantor. The bank appeared before the Tribunal and objected and opposed the prayer for setting aside the ex-parte decree. According to the bank, the said application was hopelessly barred by limitation, having filed after delay of 1213 days from the date of decree (20th April, 2002). It is wrongly shown as 62 days from the date of knowledge, which is not the starting point. The stand of the bank having accepted by Tribunal, the respondent preferred appeal, which was allowed by the Appellate Tribunal by impugned order dated 21st March, 2006. 4. Learned counsel appearing on behalf of the bank submitted that Article 123 of the Limitation Act is applicable; only 30 days time prescribed for filing application to set aside the ex-parte decree, to be counted from the date of decree. https://hcservices.ecourts.gov.in/hcservices/ On the other hand, according to the counsel for the respondent, Article 123 is not attracted and the period to be counted from the date of knowledge. 5. Counsel for the bank also placed reliance on Supreme Court decision in Sunil Poddar & Ors. - Vs – Union Bank of India reported in 2008 (1) MLJ 1193 (SC). In the said case, application u/s 22 (2) (g) was preferred by the appellants to set aside the ex-parte order submitting that they were not served with summons. Bank contended that summons were published in the newspaper. The Supreme Court, while noticed that the appellants were aware of the civil suit, entered appearance and filed written statement, but there was no such whisper about the same u/s 22 (2) (g) application, observed that the conduct was not bona fide. The Supreme Court further held that only if the applicant satisfied the Court that he had no notice of the date of hearing of the suit and he had no sufficient time to appear and answer the claim of the appellant, decree will not be set aside for mere irregularity in service of summons. In the present case, the borrower has not taken plea before the Tribunal that summons was served on her. There was no concealment of fact made by borrower before the Tribunal. In this background, the aforesaid judgment cannot be made applicable in the present case. Counsel for the petitioner also relied on single Judge judgment of this Court in Indian Bank – Vs – D.C.Mangalraj reported in 2006 (3) CTC 635, but therein the issue relating to limitation having not decided, the petitioner bank cannot derive any advantage of the same. 6. We have heard the parties and noticed the rival contentions; relevant provisions of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the 'DRT Act'), the Limitation Act and also the judgments relied on by the parties. 7. The Tribunal is empowered u/s 19 to decide the claim made by a bank/financial institution. Under sub-section (21) to Section 19 and rule 16 of the Debts Recovery Tribunal (Procedure) Rules, 1993, (hereinafter referred to as 'DRT Procedure Rules'), the Tribunal is required to forward a copy of every order passed by it to the applicant and defendant, as evident from the relevant provision and quoted hereunder :- "Section 19 (21) of RDDB & FI Act : 19. Application to the Tribunal. - (1) * * * (21) The Tribunal shall send a copy of every https://hcservices.ecourts.gov.in/hcservices/ order passed by it to the applicant and the defendant. Rule 16 of DRT Procedure Rules : 16.Communication of orders to parties.- Every order passed on an application shall be communicated to the applicant and to the [defendant] either in person or by registered post free of cost." Under Section 22 (2) (g), the aggrieved persons may prefer an application for setting aside any order of dismissal of any application for default or any order passed by it ex-parte, as quoted hereunder :- 22. Procedure and powers of the Tribunal and the Appellate Tribunal. - (1) * * * * * * * (2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely :- * * * * * * * * (g) setting aside any order of dismissal or any application for default or any order passed by it ex-parte." There is no limitation prescribed therein for preferring such application to set aside ex-parte order, except Section 24, which prescribed application of Limitation Act, as far as may be and reads as follows :- "24. Limitation.- The provisions of the Limitation Act, 1963 (36 of 1963), shall, as far as may be, apply to an application made to a Tribunal." 8. Against an ex-parte decree passed by Tribunal, any aggrieved person can also prefer appeal u/s 20 before the Appellate Tribunal. Under sub-section (3) therein, a period of limitation prescribed for preferring such appeal, as evident from the said provision and quoted hereunder :- "20. Appeal to the Appellate Tribunal. - (1) * * * (3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order made, or deemed to have been made, by the Tribunal is received by him and it shall be in such form and be accompanied by such fee as may be prescribed: https://hcservices.ecourts.gov.in/hcservices/ Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period." From sub-section (3) to Section 20, one can find out the relevancy of Section 19 (21) and Rule 16, whereby the Tribunal is mandated to communicate its order to both the parties so as to count the period of limitation. It will start from the date on which copy of the order is received by the party. The Appellate Tribunal is also empowered to entertain such application after the expiry of the period, if there is sufficient cause for not filing it within such period. 9. From Article 123 of the Limitation Act, it will be evident that it prescribes 30 days of limitation for preferring an application in case of an ex-parte decree, if summons or notice was served on the party. The said provision, though applicable in the case of ex-parte decree, where summons and notice have been served on the party, but will not be attracted in case of any other ex-parte order passed by the Tribunal. Section 22 (2) (g) is confined not only to an ex-parte decree, but is applicable in the following cases :- a) for setting aside any order of dismissal of "any application" for default; and b) "any order" passed by Tribunal ex-parte, which may include ex-parte decree distinguished from other ex-parte orders. 10. The particular provision of Limitation Act is either applicable in case of an application, if preferred u/s 22 (2) (g) of DRT Act or is not applicable. It cannot be stated that in a particular situation it is applicable, but in other situations it is not applicable. For example, if any application is filed u/s 22 (2) (g) for setting aside an order of dismissal for default, the provision of Article 123 of Limitation Act is not attracted. Similarly, if any order is passed ex-parte by Tribunal, apart from ex-parte decree, the provision of Article 123 of Limitation Act is also not attracted. If the said provision is not attracted for "any order" passed ex-parte by the Tribunal, it cannot be made applicable to an ex-parte decree passed by the Tribunal. Further, if Article 123 of Limitation Act is also made applicable in case of ex-parte decree passed by Tribunal, the relevancy of sending a copy of the order passed by the Tribunal to both the parties, as mandated u/s 19 (21) and Rule 16 will be frustrated and for that we are of the view that Article 123 of Limitation Act is not applicable for entertaining a petition u/s 22 (2) (g) of the DRT Act. https://hcservices.ecourts.gov.in/hcservices/ 11. Admittedly, the Appellate Tribunal had also jurisdiction u/s 20 to entertain an appeal against an ex-parte decree of the Tribunal. In view of the impugned rejection order 27th Feb., 2006, passed by the Tribunal, the matter having been brought to the notice of the Appellate Tribunal, it was otherwise open to the Appellate Tribunal to entertain the appeal u/s 20 to decide the case on merits. For the said reason also, the Appellate Tribunal having passed certain order imposing cost on the borrower/respondent and directed her to pay the amount with interest, it requires no interference. 12. There being no merit, the revision petition is dismissed. But taking into consideration the facts, no cost is imposed. GLN Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar To 1. The Registrar Debts Recovery Appellate Tribunal Chennai. 2. The Registrar Debts Recovery Tribunal Chennai. + 2 ccs to Mr. P. Seshadri, Advocate SR No. 7635, 7323 + 1 cc to Mr. S. Sethuraman, Advocate SR No. 7308 ORDER IN C.R.P. (PD) NO. 693 OF 2006 KM(CO) SR/19.2.2008 https://hcservices.ecourts.gov.in/hcservices/