In the High Court of Judicature at Madras Dated : 04.10.2010 Coram : The Hon'ble Mr.Justice D.MURUGESAN and The Hon'ble Mr.Justice B.RAJENDRAN W.P.No.30811 of 2008 G.Thulasi .. Petitioner -vs- 1. Debt Recovery Appellate Tribunal, Chennai. 2. The Debt Recovery Tribunal II, Chennai. 3. Vijaya Bank, Vadapalani Branch, No.196/1, Arcot Road, Vadapalani, Chennai. 4. A.Abdul Majeed 5. G.Sreekanth (R-5 impleaded as per Order dt. 02.02.2010 in M.P.No.1/09) .. Respondents Petition filed under Article 226 of the Constitution of India praying for issue of Writ of Certiorarified Mandamus to call for the records relating to the order dated 20.6.2008 passed in M.A.No.4/2008 on the file of Debt Recovery Appellate Tribunal at Chennai confirming the order dated 4.7.2007 made in M.A.No.202/2003 in DRC No.117/2007 (Old No.165/1999) in OA.No.193/2007 (Old No.464/1997) on the file of Debt Recovery Tribunal II at Chennai and to quash the same and consequentially set aside the Auction Sale of item No.5 in D.R.C.No.117/2007 (Old No.D.R.C.No.165/99 R.O.I) dated 14.8.2003. For Petitioner : Ms.Gowri, for Mr.M.Balasubramanian For Respondent : Mr.Om Prakash for M/s.Ramalingam Asso./R-3 : Mr.C.Ravichandran for R-5 : No appearance * * * * * https://hcservices.ecourts.gov.in/hcservices/ O R D E R (Order of the Court was made by D.MURUGESAN, J.) The petitioner is the guarantor for the packing credit advance availed by the principal borrower from the respondent bank on 16.8.1994 to a tune of Rs.15 lakhs carrying interest at 13% p.a. Apart from four properties belonging to the borrower having been mortgaged for the said advance, one property of the petitioner being a guarantor was also given in mortgage. For the failure of repayment of advance amount by the principal borrower, the bank approached the Debt Recovery Tribunal and obtained an exparte decree dated 3.5.1999 for a sum of Rs.21,12,714/- together with interest. Thereafter, the properties were attached on 06.08.2002 including the fifth item belonging to the petitioner and publication of sale notice was issued on 13.07.2003. The sale was effected on 14.8.2003 and thereafter, it was confirmed and the sale certificate was also issued on 18.9.2003. 2.The petitioner has filed an application on 1.9.2003 before the Debt Recovery Tribunal to set aside the sale, on the following grounds: i) That the property, viz., Item No.5, belonging to the petitioner was given in mortgage only to an extent of Rs.1,20,000/- and the bank cannot claim lien over the property for the entire loan amount; ii) That there was no proper publication of sale; iii) That the order of the Debt Recovery Tribunal has not been communicated and there was violation of Rule 16 of the Debt Recovery Tribunal (Procedure) Rules, 1993; iv) That the sale price was very low as against the actual price of Rs.20 lakhs; and v) That in any case, when proceedings are pending before the Debt Recovery Tribunal, the bank should not have brought the properties for sale. Both the Debt Recovery Tribunal as well as the Appellate Tribunal did not agree with any of the above grounds made by the petitioner and accordingly, the relief sought for by the petitioner to set aside the ex parte decree was negatived. Hence, the present writ petition. 3.We have heard Ms.Gowri, learned counsel appearing for the petitioner, Mr.Om Prakash, learned counsel for the third respondent/bank and Mr.C.Ravichandran, learned counsel appearing for the fifth respondent. 4.From the submissions made by the learned counsel for the petitioner, the following questions emerge for our consideration: https://hcservices.ecourts.gov.in/hcservices/ I. Whether, in the given case, notice was served to the petitioner before ex parte order was passed ? II. Whether the respondent could bring the property for sale when an application for setting aside the ex parte decree was pending before the Debt Recovery Tribunal ? III. Whether there was proper compliance of the Debts Recovery Tribunal (Procedure) Rules, 1993, in publication of sale notice in Dailies ? IV. Whether the property in Item No.5 was given in mortgage only for a liability to an extent of Rs.1,20,000/- or for the entire loan of the principal borrower ? and V. Whether the copy of the order of the Tribunal was not communicated to the petitioner and thus, there was violation of Rule 16 of the Debts Recovery Tribunal (Procedural) Rules, 1993 ? Question No.I: " Whether, in the given case, notice was served to the petitioner before ex parte order was passed " 5.It is seen from the order of the Debts Recovery Appellate Tribunal that the notice indicating the date of hearing as 17.02.1998 was served on the writ petitioner on 19.01.1998. The petitioner failed to appear on that date before the Debts Recovery Tribunal. The petitioner was, in fact, set ex parte only on 13.03.1998 and subsequently, an ex parte final order was passed on 03.05.1999. The Debts Recovery Appellate Tribunal, considering the above factual aspect, held that in spite of service of notice on 19.01.1998, the petitioner had allowed the Debts Recovery Tribunal to pass an ex parte order and thereafter, ex parte decree, almost after one year and four months and the petitioner had not taken any steps to represent before the Debts Recovery Tribunal. This finding of the Debts Recovery Appellate Tribunal needs no interference, as it is after the service of notice, the petitioner has failed to appear before the Debts Recovery Tribunal. Hence, the first contention is liable to be rejected. Accordingly, the same is rejected. Point No. II: "Whether the respondent could bring the property for sale when an application for setting aside the ex parte decree was pending before the Debt Recovery Tribunal ?" 6.As rightly pointed out by the learned counsel for the third respondent/bank, the ex parte decree was made on 03.05.1999 and the copy of the order was despatched on 07.05.1999. The order of attachment was made as early as on 06.08.2002 and the sale notice was issued on 13.07.2003. When the application to set aside the ex parte decree was made on 01.09.2003, from the proceedings of the Debts https://hcservices.ecourts.gov.in/hcservices/ Recovery Tribunal it could be seen that the matter was taken up for hearing on 02.09.2003 and was directed to be posted on 16.10.2003, by the time the Debts Recovery Tribunal had not issued any notice to the bank. Thereafter, the matter was taken up on 16.10.2003 and was directed to be called on 22.12.2003. However, in the meantime, an I.A. was taken on 05.11.2003 itself, wherein the petitioner had stated that the sale was conducted by the Recovery Officer and the same was also confirmed and therefore, the matter was postponed to 03.12.2003. Only thereafter, the notice was served on the bank for the hearing dated 03.12.2003. In the meantime, the sale was confirmed on 18.9.2003 itself and the sale certificate was also issued. Hence, the bank did not have the knowledge of the pendency of proceedings initiated by the petitioner for setting aside the ex parte decree. There is nothing to indicate that the petitioner had also informed the bank as to the pendency of the proceedings in the meantime. Hence, it cannot be now contended by the petitioner that in spite of the pendency of the proceedings, the sale had taken place and the certificate had been issued and consequently, the same should be set aside. For the said reason, the second contention also must fail and accordingly, the same is rejected. Point No.III: "Whether there was proper compliance of the Rules in publication of sale notice in Dailies ?" 7.As far as this contention is concerned, the paper publication was effected as early as on 13.7.2003 at the time when the application filed by the petitioner to set aside the sale was pending and from the proceedings of the Debts Recovery Tribunal dated 05.11.2003, it is seen that the petitioner was very well aware even on that date that the sale has already been effected and it was confirmed. Therefore, it is not now open to the petitioner to contend that the sale notice was published only in one vernacular daily and not in two. Even otherwise, the publication of the sale notice is only to bring to the knowledge of the owner of the property or the person who will otherwise be aggrieved by virtue of such sale to take appropriate action. The petitioner, who had the knowledge of the proceedings initiated by the respondent bank, cannot now complain of non-compliance of the rule, which is procedural only for the purpose of bringing to the knowledge of the petitioner. Hence, the said contention also must fail and the same is rejected. Point No. IV: "IV. Whether the property in Item No.5 was given in mortgage only for a liability to an extent of Rs.1,20,000/- or for the entire loan of the principal borrower ?" https://hcservices.ecourts.gov.in/hcservices/ 8.This contention is, of course, the primary contention taken by the petitioner. The learned counsel appearing for the respondent- bank has brought to our notice the very letter of guarantee executed by the petitioner and others dated 29.12.1994. In the letter of guarantee, the petitioner has been shown as guarantor No.3 and it is stated that the said letter of guarantee is in respect of Rs.35 lakhs and not as contended by the petitioner that the guarantee is limited to only Rs.1,20,000/-. Of course, the learned counsel appearing for the petitioner though vehemently contended that the said contention has been raised in the affidavit filed in all earlier proceedings, it has not been specifically denied and therefore, it should be taken as admitted by the respondent-bank, we are not inclined to accept the said submission for the simple reason that we should go by the records. The copy of the letter of guarantee produced before this Court undoubtedly discloses that the petitioner stood as guarantor for the entire loan and not restricted to only Rs.1,20,000/-. Hence, that contention also must fail and accordingly, the same is rejected. Point No.V: "Whether the copy of the order of the Tribunal was not communicated to the petitioner and thus, there was violation of Rule 16 of the Debts Recovery Tribunal (Procedure) Rules, 1993?" 9.The learned counsel for the petitioner submitted that the copy of the order has not been served by the Debts Recovery Tribunal and hence, there was violation of Rule 16 of the Rules. That Rule is as under:- "16.Communication of Orders to Parties. Every order passed on an application shall be communicated to the appellant and to the defendant either in person or by registered post free of cost." Placing reliance on the above rule, the learned counsel submitted that till such time the copy of the order is served, the order passed by the Debts Recovery Tribunal cannot be put against the petitioner. In our opinion, the said contention cannot be accepted. In this regard, we may also point out Rule 11 of the very same Rules. That rule relates to 'endorsing copy of application to the respondents'. As and when an application is received by the Tribunal, it is obligated to serve a copy of the application and paper book on each of the defendants by registered post. That rule relates to the service of the application and paper book. On the other hand, Rule 16 employs the word 'communicated' as that rule relates to the communication of orders. Inasmuch as the rule employs the word 'communication', the question of this Court finding whether the copy of the order was served or not is immaterial for the purpose of deciding the validity of the order as such. In fact, the Tribunal had noticed that after the order was passed on 03.05.99, it was https://hcservices.ecourts.gov.in/hcservices/ despatched to all the defendants on 07.05.99, i.e., within a period of four days. From the above, we are constrained to come to the only conclusion that the respondent-bank has complied with Rule 16. Hence, the last ground also must fail and is rejected accordingly. 10.For all the above reasons, we find no merit in the writ petition. Accordingly, the same is dismissed. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar sra To 1. The Registrar Debt Recovery Appellate Tribunal, Chennai. 2. The Registrar Debt Recovery Tribunal II, Chennai. 2 ccs To Mr.M.Balasubramanian, Advocate, SR.73449 2 ccs To M/s.Ramalingam Associates, SR.73181 1 cc To Mr.C.Ravichandran, Advocate, SR.73528 W.P.No.30811 of 2008 NSM(CO) sra 22/10/2010 https://hcservices.ecourts.gov.in/hcservices/