IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.14153 of 2009 1. M/S RAM GANGA CHEMICALS PVT. LTD. A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT NEEVA MENTION, JAMAL ROAD, PATNA THROUGH ITS DIRECTOR SMT. RITA DEVI W/O SRI ASHOK KUMAR YADAV R/O BEHIND OF S.B.I. COLONY, DIGHA, DISTT. PATNA - 800011 VERSUS 1. THE STATE BANK OF INDIA HAVING ITS CORPORATE OFFICE, NARIMAN POINT, MADAM CAMA ROAD, MUMBAI, THROUGH ITS CHAIRMAN-CUM-MANAGING DIRECTOR 2. THE CHAIRMAN-CUM-MANAGING DIRECTOR THE STATE BANK OF INDIA, MUMBAI 3. THE CHIEF MANAGER THE STATE BANK OF INDIA, SPECIALISED COMMERCIAL BRANCH, DAK BUNGALOW ROAD, PATNA-800001 4. THE UNION OF INDIA THROUGH THE RECOVERY OFFICER DEBTS RECOVERY TRIBUNAL, EAST BORING CANAL ROAD, PATNA 5. THE REGISTRAR DEBTS RECOVERY TRIBUNAL, EAST BORING CANAL ROAD, PATNA ----------- Counsel for the Petitioner : Mr. Gautam Kejriwal. Counsel for the Bank : Mrs. Nilu Agrawal. ------------ 05 11.01.2010 By this writ application the petitioner Company challenges the order dated 13.07.2009 passed in Miscellaneous Application No.30 of 2005 by the Debt Recovery Tribunal, Bihar, Patna. By this order the miscellaneous application filed by the Company for setting asides the ex parte judgment and decree dated 03.05.2005, passed by the Debt Recovery Tribunal (hereinafter referred to as DRT) in O.A. No.40 of 2003 and for restoration of the said original application have been dismissed. Counter affidavit has been filed by the State Bank of India, parties have been heard and with consent of parties this application is being disposed of at this stage itself. It is not in dispute that the petitioner Company is a debtor in respect of financial accommodation extended by - 2 - the State Bank of India. It is in substantial default. The State Bank of India instituted O.A. No.40 of 2003 against the petitioner Company, its Managing Director, its Directors and its guarantors. On the original application being filed by the State Bank of India (hereinafter referred to as the Bank) notices by registered post were issued to all the defendants including the petitioner. This is not in dispute. The matter was adjourned several times awaiting appearance of the defendants. None put in their appearance. Bank with permission of the DRT took steps for substituted service by publishing the notice in Times of India Newspaper, Patna, as the all the defendants are of Patna. On the notice being so published in the newspaper, the same was brought on record and the matter was then fixed for ex parte hearing by the DRT. Again none of the defendants appeared. After detail consideration of the facts, ex parte judgment and decree was passed by the DRT on 03.05.2005. In the writ petition, it is averred that soon thereafter on 11.06.2005 one of the Directors of the petitioner Company happen to visit the respondent Bank where she alleges that she learnt about the said proceedings and thereafter on 13.07.2005 filed the present Miscellaneous Application No.30 of 2005, for recall of the ex parte judgment and decree dated 03.05.2005. The Debt Recovery Tribunal entertained the miscellaneous application and after hearing the parties dismissed the same - 3 - holding that the defendants had been given sufficient notice and opportunity to appear and defend but had chosen not to avail of those opportunities, till after the adverse judgment and decree was passed ex parte and, as such, no case was made for recalling the ex parte judgment and decree. This is what has brought the petitioner Company to this Court. On behalf of petitioner, it is submitted that Rule- 16 of the Debts Recovery Tribunal (Procedure) Rules, 1993 having been violated, it was a fit case in which the Tribunal ought to have recalled the ex parte judgment and decree. To the contrary, on behalf of the Bank, it is submitted that the petitioner nowhere states that the registered notices sent to the Company, its Managing Director, its Directors and guarantors were not duly served. It is further submitted that the petitioner has not even pleaded that it was unaware of the substituted service in the shape of newspaper publication. It is lastly submitted that against the said order passed by the Tribunal refusing to recall the ex parte order an appeal lies in terms of Section-20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, which having not been preferred, this Court should not interfere in the matter. Having heard the parties and considered the matter, I think that respondents are correct. Petitioner has statutory remedy of appeal before the Appellate Tribunal in terms of Section-20 of the Act, which should be availed by it - 4 - first before this Court is called upon to interfere. It is not that this Court lacks the power to interfere at this stage but this case does not fall within the exceptions to the Rule of alternative remedy, as prima facie, neither the order impugned is without jurisdiction nor has it been passed in gross violation of principles of natural justice. On behalf of the petitioner, it is submitted that in a manner principles of natural justice stood violated by virtue of non-compliance of provisions of Rule-16 of the Rules aforesaid. Rule-16 is quoted hereunder:- “Rule-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.” It is submitted that Rule-16 makes it obligatory on the Tribunal to communicate to the applicant and to the defendants all orders passed by it and failure to communicate the order would vitiate the proceedings. To the contrary, on behalf of the Bank, it is submitted that this Rule is limited to only applications and not the main order or the final order in any respect. In my view, Rule-16 obliges the Tribunal to communicate all orders passed by it to both the parties either in person, if the parties are appearing or by registered post - 5 - free of cost. If an order is passed on a date fixed, parties appearing, then it will be deemed to be communication to the parties in person, as it is passed and/or delivered in their presence. In case, any of the parties is not appearing for any reason then the order must be sent to the said party by registered post free of cost that is the clear obligation under Rule-16. We will consider the effect of non-communication slightly later. To the argument of the respondent Bank that not all orders are to be communicated, it must be remembered that Section-19(21) of the Act obliges the Tribunal to send a copy of every order passed by it to the applicant and the defendants. Rule-16 is a subordinate legislation under Rule making power to that effect and if the two provisions are read, it would be clear that every order passed by the Tribunal which includes orders passed by the Registrar or the Recovery Officer of the DRT must be effectively communicated to the parties. As noted above, if it is passed in presence of parties then they know it, if the parties are not appearing or has not appeared then there is an obligation to send it by registered post free of cost. This is the general responsibility and duty of the Tribunal. As to the effect of non-communication, it must be remembered that though both Section-19(21) and Rule-16 use the expression ‘shall’. That does not make it mandatory - 6 - in the manner that non-communication thereof would render the non-communicated order of no effect or null and void. Though, the provisions are expressed in mandatory terms by use of expression ‘shall’, it is nevertheless directory in application especially as no consequences are provided for failure to follow the said procedure. In my view, the only effect would be that so far as a non-appearing person is concerned, as appeal against such order is to be preferred within 45 days from the date on which a copy of the order sent by the Tribunal is received by him. That period would not commence. This flows from Section-21(3) of the Act. Thus, if an order against which an appeal is available is not communicated to the parties concerned, as specified above, then if he applies for a copy thereof later on, then for computing the period of limitation, the period would start from the date when copy thereof, is made available to him and not when the order was passed. Apart from this no other effect is discernible from the provisions of the Act or the Rules made thereunder. Thus, to my mind, unless the petitioner can show grave prejudice by non-compliance of Rule-16 or for that matter Section-19(21) mere non-communication of the order could not inure to the benefit of the complaining party. No prejudice has been pleaded except that had the order of proceeding ex parte being communicated the petitioner could have appeared. - 7 - This is a lame excuse. Prima facie, when party chose to ignore registered notices and notices published in Times of India newspaper then to say that it could have appeared and save the proceeding from being ex parte does not appear to be natural nor bona fide. This adverse situation has been brought about by petitioner’s own conduct. In view of the aforesaid conduct and in view of the interpretation of Rule-16, as given above, I am not inclined to interfere in the matter. The petitioner must prefer his statutory remedy of appeal, if he is aggrieved by any order. However, if the petitioner prefers an appeal, the same would be dealt with on merits in accordance with law by the Appellate Authority, without being prejudiced by observations made above by this Court or the delay. The writ application is, thus, dismissed. Trivedi/ (Navaniti Prasad Singh, J.)