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Manilal Govindji Khona vs Indian Bank decided on 29.08.12 by High Court of
Bombay
Comments by DRT Legal Solutions:-
The following ‘Bombay High Court’ judgment proves that the Limitation Act
is applicable in DRTs. We have been opining on this line past several years and
finally our contentions have been proved true. It is needless to mention that
the basic objective and purpose of the courts and tribunals in our country to
award justice. Naturally such process will take time which can only be cut down
by increasing the number of judges and by use of advanced technology but not by
short cuts and summary trials.
MANILAL GOVINDJI KHONA VS. INDIAN BANK
Citations - [2013 (1) DRTC 162 (Bom.)], LAWS(BOM)-2012-8-117
HIGH COURT OF BOMBAY
Judges :- D.D.Sinha , V.K.Tahilramani J.
Decided on August 29, 2012
WRIT PETITION NO. 3652 OF 2012
MANILAL GOVINDJI KHONA
Appellant
VERSUS
INDIAN BANK
Respondents
Advocates :- V.V.Tulzapurkar
Ï¿½ , Rafeeq Peer Mohiddin , T.N.Tripathi , Sapana Ranchure , Satish Shetye ,
M.Shah , Pandya Gandhi , R.A.Kapadia
JUDGEMENT
D.D.SINHA,J. -
(
1. ) HEARD the learned counsel for the petitioner and the learned counsel for
the respondent. Rule returnable forthwith. Heard finally by consent of the
parties.
(
2. ) THE petitioner is questioning validity and propriety of the order dated
10.4.2012 (impugned order) passed by Debt Recovery Appellate Tribunal (DRAT)
whereby the petitioner's appeal against the order dated 22.2.2012 passed by Debt
Recovery Tribunal (DRT) in Misc. Application No. 7 of 2012 dismissing the
application for condonation of delay came to be upheld. FACTS STATED BY THE
PETITIONER :
On 7.9.1987 High Court Suit No. 2636 of 1987 was filed by the respondent for
recovery of Rs.69,50,213.59 paise with interest against the petitioner and for
enforcement of mortgage. On 9.12.1996 decree was passed by the Bombay High
Court. On 31.5.1997 petitioner tendered the amount in terms of decree dated
9.12.1996 which was refused by the respondent. On 8.7.1997 petitioner took out
Chamber Summons No. 1066 of 1997 for recording tender of payment by the
petitioner in terms of the decree. (Chamber Summons now stands transferred to
DRT and is still pending).
(
3. ) ON 8.9.1998 and 7.12.1998 Court Receiver, High Court, Bombay, issued
notices for auctioning the mortgaged property. On 16.7.1999 DRT was constituted,
as a result of which, the pending execution proceedings stood automatically
transferred to the DRT and the High Court ceased to have any jurisdiction to
proceed with the execution. On 6.5.2000 Court Receiver held auction in which
respondent purchased the subject property for Rs.2,00,00,000/-. High Court
approved the sale. On 3.2.2004 respondent made application before DRT for
Recovery Certificate on the basis of the decree passed by the High Court. On
29.11.2004 Recovery Certificate was issued by DRT and the property was ordered
to be sold by the Recovery Officer. In 2010 petitioner filed Original Suit No.
682 of 2010 before the Principal Sub District Court, Coimbatore claiming
declaration in respect of suit property. The plaint was rejected on 22.12.2011
for want of jurisdiction. The petitioner filed Writ Petition No. 12943 of 2011
in the Madras High Court seeking enforcement of One Time Settlement (O.T.S.). On
29.4.2011 the petitioner filed Suit being Suit (L) No. 1236 of 2011 in this
Court which was rejected on 19.10.2011.
(
4. ) IN the second week of November 2011 respondent commenced levelling and
digging work on the suit property, hence on 28.11.2011 petitioner filed
application (Exhibit "11") before the Recovery Officer contending that the sale
was bad in law. On 2.12.2011 Recovery Officer rejected the application of the
petitioner as not maintainable. On 15.12.2011 petitioner filed an Appeal against
the order of rejection dated 2.12.2011. At the time of hearing of the Appeal on
27.12.2012 it was transpired that the petitioner's remedy is to file an
application for rectification of the Recovery Certificate. Petitioner therefore
withdrew the Appeal.
On 26.1.2012 petitioner filed Misc. Application (L) No. 34 of 2012 for avoiding
the sale and seeking rectification of Recovery Certificate. On 25.1.2012
petitioner filed Misc. Application No. 7 of 2012 for condonation of delay in
filing the Misc. Application (L) No. 34 of 2012. Vide order dated 22.2.2012
petitioner's application for condonation of delay was dismissed by DRT, Mumbai.
On 27.2.2012 petitioner filed an Appeal being Misc. Appeal No. 35 of 2012 before
DRAT. On 10.4.2012 DRAT dismissed the Appeal filed by the petitioner as barred
by limitation, hence the petitioner filed the present petition by impugning the
order dated 10.4.2012 passed by the DRAT. FACTS STATED BY THE RESPONDENT :
(
5. ) IT is not in dispute that on 7.9.1987 the respondent filed the High Court
Suit No. 2636 of 1987 for recovery of the amount as mentioned above. Passing of
the decree by the High Court on 9.12.1996 is also not disputed. However, as per
the respondent the said decree provided stipulation that if the decretal amount
was paid on or before 31.5.1997, the rate of interest would be 12% per annum.
However, petitioner failed to pay the amount. In terms of decree, on failure of
the petitioner making payment of the amounts and interest of costs mentioned
therein on or before 31.5.1997, the immovable properties at Coimbatore were to
be sold by the Court Receiver by and under the decree and directions of this
Court in public auction or private treaty and the net sale proceeds be applied
in or towards the satisfaction of the respondent's decretal claim herein. The
decree on admission was also provided that on failure to make the payment, the
decree will be passed in terms of prayer clauses (b), (c), (d) and C.
(
6. ) RESPONDENT bank purchased the subject property and the Court Receiver duly
issued a Sale Certificate dated 29.8.2000 in favour of the respondent bank and
since August 2000 the respondent bank is in possession of the suit property and
for last 11 years the respondent bank is paying the property tax. The petitioner
has no right, title and interest in the subject property.
The petitioner has been harassing the respondent bank by filing several suits
and writ petitions. The suit filed by the petitioner in Coimbatore bearing No.
682 of 2010 was rejected by the Court in Coimbatore The petitioner is seeking
the same relief which was sought by the petitioner in the said suit. The
petitioner filed another suit in this Court bearing No. 1236 of 2011 which was
rejected by this Court. The petitioner then filed Writ Petition in the High
Court of Madras being Writ Petition No. 12943 of 2011. The said petition was
also dismissed.
(
7. ) IT is not in dispute that in 2004 the respondent bank applied for issuance
of Recovery Certificate which was directed to be ordered. This became necessary
because even after giving credit for the amount recovered by sale i.e.
Rs.2,00,00,000/- the amount of Rs.42,24,98,000/- as on 30.7.2012 still remained
due and payable by the petitioner to the respondent bank. It is not in dispute
that the Recovery Certificate was issued by DRT on 29.11.2004. CONSIDERATION AND
CONCLUSIONS :
(
8. )
IN view of the above referred facts and circumstances placed before us by the
petitioner as well as the respondent, the question which fell for consideration
of DRAT in Appeal was: "Whether the delay in preferring the Interim / Misc.
Application (L) No. 34 of 2012 should be condoned or not"?
In the present petition the petitioner is questioning the validity and propriety
of the order passed by the DRAT and therefore the question that arises for
consideration by this Court is: "Whether the order impugned whereby the Appeal
of the petitioner came to be dismissed as barred by limitation is sustainable in
law"? However, this Court cannot ignore the other contentions canvassed by the
learned counsel for the petitioner as well as the respondent which have a
positive bearing in respect of opinion expressed by the DRAT, Mumbai, in the
impugned order whereby the Appeal filed by the petitioner came to be dismissed
as barred by limitation.
At the outset, we would like to express that there is a long chequered history
pertaining to the dispute between the parties to the petition. The parties have
initiated various proceedings in the Civil Courts, High Court, DRT and DRAt
seeking different reliefs. In the present petition this Court is not called upon
to consider whether the reliefs claimed by the petitioner in various proceedings
are overlapping rendering subsequent proceedings not maintainable either on the
ground of resjudicata or otherwise. Similarly this Court is also not called upon
to consider and decide whether on establishment of DRT all suits and/or
execution proceedings initiated by the banks or financial institutions stood
automatically transferred to DRT, Mumbai, by operation of law, including
"execution proceedings" in view of Section 31 of the Recovery of Debts Due to
Banks and Financial Institution Act, 1993 (hereinafter referred to as the "RDDB
& F.I. Act" for the sake of brevity) and therefore the action of the Court
Receiver, High Court, Bombay, auctioning the suit property on 6.5.2000 was
unsustainable in law for want of jurisdiction.
(
9. ) HOWEVER , we want to express that it is well settled that a decree passed
by the Court without jurisdiction is a nullity and that its invalidity can be
questioned whenever and wherever it is sought to be enforced or relied upon even
at the stage of execution and even in collateral proceedings. Law declared by
the Apex Court in case of Kiran Singh and Ors. vs. Chaman Paswan and Ors. [
A.I.R. 1954 S.C. 340] clearly demonstrates that defect of jurisdiction whether
it is pecuniary or territorial or in respect of subject matter of the action,
strikes at the very authority of the court to pass any decree and such a defect
cannot be cured even by consent of the parties. The relevant observations made
by the Apex Court are in paragraph 6 of the decision, which reads thus :
"6. The answer to these contentions must depend on what the position in law is
when a Court entertains a suit or an appeal over which it has no jurisdiction,
and what the effect of section 11 of the Suits Valuation Act is on that
position. It is a fundamental principle well- established that a decree passed
by a Court without jurisdiction is a nullity, and that its invalidity could be
set up whenever and wherever it is sought to be enforced or relied upon, even at
the stage of execution and even in collateral proceedings. A defect of
jurisdiction, whether it is pecuniary or territorial, or whether it is in
respect of the subject-matter of the action, strikes at the very authority of
the Court to pass any decree, and such a defect cannot be cured even by consent
of parties. If the question now under consideration fell to be determined only
on the application of general principles governing the matter, there can be no
doubt that the District Court of Monghyr was 'coram non judice', and that its
judgment and decree would be nullities. The question is what is the effect of
section 11 of the Suits Valuation Act on this position."
(
10. ) THE learned counsel for the petitioner has submitted that the petitioner
in his Misc. Application (L) No. 34 of 2012 raised a specific ground i.e. ground
Nos. 5.13 and 5.14, which reads thus :
"5.13 On establishment of Debts Recovery Tribunal (23rd July, 1999 in Mumbai)
all Suits and/or execution proceedings initiated by the Banks or Financial
Institutions stood automatically transferred to the Debts Recovery Tribunal,
Mumbai by operation of law. After 23rd July, 1999 the jurisdiction of the Civil
Court in the matter of recovery of Banks "debt" and/or "execution" of decree
above Rs.10 lacs was expressly barred by statutory provision contained in
Sections 17 and 18 of the RDDBI Act, 1993. From 23rd July, 1999 the Learned
Recovery Officer alone has "exclusive" jurisdiction to execute the said decree,
if permissible in law passed by the Hon'ble High Court. The Apex Court in the
case of Allahabad Bank v/s. Canara Bank reported in (2004) 4 SCC 406 has clearly
held that the expression "proceedings" in Section 31 of the RDDBI Act shall
include the "execution proceedings" pending before civil court to the
commencement of the said Act. 5.14 Despite the clear statutory mandate contained
in Section 31 of the said Act, Respondents illegally and wrongfully persuaded
the Court Receiver, High Court Bombay to put the said property for auction on
6th May, 2000. Neither Hon'ble High Court nor Court Receiver, High Court, Bombay
had jurisdiction to entertain the "execution proceeding" in respect of the said
decree dated 9th December, 1996 which stood transferred to this Hon'ble Tribunal
by statutory force of law contained in Section 31 of the said Act."
The Apex Court in case of Punjab National Bank, Dasuya vs. Chajju Ram and Ors.
[(2000) 6 S.C.C. 655] in paragraphs 5 and 6 has observed thus :
"5. The point in issue is no longer res integra. After analysing the provisions
of the Act, this Court, in Allahabad Bank v. Canara Bank ( JT (2000) 4 SC 411)
held that the word "proceeding" in Section 31 of the Act would include an
execution proceeding pending before a civil Court before the commencement of the
Act. It was further held that the suits and proceedings so pending would stand
transferred to the Tribunal. This conclusion emanated from the fact that the
definition of the word "debt" contained in Section 2(g) of the Act, inter alia,
meant any liability which was due to a bank and was payable under a decree or
order of a civil court. The decretal amount being a debt as envisaged by Section
2(g) would clearly attract the provisions of Sections 17 and 18 of the Act.
which give exclusive jurisdiction to the Tribunals constituted thereunder to
decide the questions regarding recovery of debts due to the banks and financial
institutions. Section 31 which deals with transfer of cases reads as under :
"31. Transfer of pending cases. - (1) Every suit or other proceeding pending
before any court immediately before the date of establishment of a Tribunal
under this Act, being a suit or proceeding the cause of action whereon it is
based is such that it would have been, if it had arisen after such
establishment, within the jurisdiction of such Tribunal, shall stand transferred
on that, date to such Tribunal: Provided that nothing in this sub-section shall
apply to any appeal pending as aforesaid before any court. (2) Where any suit,
or other proceeding stands transferred from any court to a Tribunal under sub-
section(1), - (a) the court shall, as soon as may be after such transfer,
forward the records of such suit or other proceeding to the Tribunal; and (b)
the Tribunal may, on receipt of such records, proceed to deal with such suit of
other proceeding, so far as may be, in the same manner as in the case of an
application made under Section 19 from the stage which was reached before such
transfer or from any earlier stage or denovo as the Tribunal may deem fit. 6. A
bare reading of the aforesaid Section shows that execution application being a
proceeding pending in a civil court when the Act came into force was liable to
be transferred to the Tribunal because the amount for which the execution
application had been filed as per the decree which had been passed, was over Rs.
10 lakhs." Similarly, the relevant observations in paragraph 9 of the said
judgment reads thus : "9. The aforesaid Section 31-A is clearly applicable in
the present case. The decree was passed by Court before the commencement of the
Amendment Act and the same has not yet been executed. At least after the
amendment, it is only the Tribunal which would have the jurisdiction of
entertaining the application for execution of the decree inasmuch as the amount
due for which the decree was sought to be executed is over Rs. l0 lakhs. We are
also unable to agree with the High Court that because the original decree which
was passed was for principal sum of Rs.6,19,250/- the Tribunal would get no
jurisdiction. It is to be seen that decree was for a sum of Rs.6,19,250/- plus
interest at the rate of 16-1/2 per cent per annum from the date of filing of the
suit till the recovery of money. As and when the amount due to the bank under
the decree became more than Rs.10 lakhs and an application for execution was
filed, it could only be entertained by the Tribunal and not by the Civil Court.
It is clear that in view of the provisions of Section 34 of the Act, the
provisions of Order 21 Rule 10 C.P.C. Would have no application."
(
11. ) THE decision of the Apex Court in case of Allahabad Bank vs. Canara Bank &
Anr. [AIR 2000 S.C. 1535] expressed the similar view which has been relied by
the Apex Court in case of Punjab National Bank.
(
12. ) THE decision of the Division Bench of this Court in case of Bank of
Tokyo-Mitsubishi Ltd. & Ors. vs. Chembra Estates & Ors. And Court Receiver, High
Court Bombay [2001(1) Bom.C.R. 842], in paragraph 13 of the judgment has
observed thus :
"13. After carefully considering the judgments of the two learned Single Judges
(Kapadia, J. and Kochar, J.), we are inclined to agree with the view taken by R.
J. Kochar, J., namely, that after the coming into force of the RDB Act, 1993,
this Court would have no jurisdiction to give directions to the Receiver,
whether appointed pending a suit or in execution. In fact, even Kapadia, J. also
took the same view, but recognising the practical difficulties that would arise
on account of the Debts Recovery Tribunal not being equipped with a separate
office of Court Receiver, and the exceedingly high value of the properties
already put in custody of the Court Receiver of the High Court, the learned
Single Judge (Kapadia, J.) was inclined to direct that the Court Receiver should
take directions from this Court for a specified period. We are not inclined to
say that this direction was erroneous in law for, apart from being Civil Court,
this Court is also a Court of Record. In exercise of the powers of this Court,
both as Court of Record and under section 151 of the Civil Procedure Code, the
learned Single Judge was justified in continuing the Receiver and directing
her/him to obtain directions from this Court, ex debito justitiae"
The learned counsel for the petitioner has contended that since the petitioner
has raised the specific issue of jurisdiction of the Receiver High Court to
conduct auction after the RDDB & FI Act came into force in the light of the
judgment of the Supreme Court and High Court, the DRAT could not have rejected
the application of the petitioner for condonation of delay and DRAT should not
have dismissed the Appeal of the petitioner as barred by limitation.
(
13. ) THE learned counsel for the respondent has argued that the auction
conducted by the Receiver, High Court in view of the directions issued by the
High Court in execution proceedings after the RDDB & FI Act came into force does
not fall for our consideration in the present petition nor this Court is called
upon to decide the said issue. This is for the DRT to consider and decide the
said issue in the light of the decisions of the Supreme Court and this Court
cited by the parties to the proceedings.
(
14. ) SIMILARLY , the learned counsel for the respondent has argued that this
Court in case of I.C.I.C.I. Ltd. vs. Patheja Brothers Forgoings and Stampings
Ltd. & Ors. [2000 (3) Mh. L. J. 212] considered the issue i.e....
"If not, whether this Court is empowered to give directions to its Court
Receiver regarding properties which are in the custody of the said Receiver till
such time as the DRT / Central Government sets up alternate office / machinery
with a proper infrastructure?"
It is contended that relevant observations in paragraph 10 of the decision of
the learned Single Judge in case of I.C.I.C.I. Ltd. reads thus:
"Although I have come to the conclusion that all suits and proceedings stood
transferred on 16th July, 1999 an important point which arises on the facts of
these cases is that the DRT has no infrastructure to take possession of the
properties worth Rs. 2000 crores. Although, DRT is now given the power to
appoint receivers, there is no adequate infrastructure provided to DRT to take
possession and charge of the properties which are in the custody of the Court
Receiver, High Court, Bombay. The working of the receiver's office as detailed
hereinabove, the question that arises is what steps this Court should take to
protect and manage the said properties during the transitional period? On one
hand, the Court's jurisdiction has been transferred to DRT and on the other hand
DRT is not in a position to take possession and manage the said properties.
These assets constitute securities created in favour of the banks and financial
institutions. They cannot be permitted to be dissipated. It has been urged on
behalf of the banks and financial institutions that till adequate/alternate
machinery is set up by the Central Government, this Court should manage the
properties which are already custodia legis. On the other hand it has been urged
that once the suits/proceedings stand automatically transferred to DRT, this
Court cannot issue directions regarding preservation and management of the
properties after 16th July, 1999 and such directions can be given only by DRT.
However, DRT can only appoint its receiver. The question is whether the said
receiver would be in a position to take charge of the above properties from the
Court Receiver, High Court, Bombay. The matter involves large number of
administrative problems. At the outset, it may be mentioned that the Central
Government carries a wrong impression that the Court Receiver, High Court,
Bombay in the past has lent its services to other Courts. That is not so. As
stated above, the Court Receiver, High Court, Bombay is an establishment of the
High Court. As stated above, it is required not only to protect the properties,
but it is also required to maintain accounts of the royalty received and the
expenses debited. The remission of the revenue goes to the State Government. It
is not clear as to whether the Central Government and the State Government had
entered into any agreement to share the revenue. Moreover, the Court Receiver,
High Court, Bombay is required to attend a large number of non-banking suits,
which are pending in this Court and if the services of the Court Receiver, High
Court, Bombay are required to be lent to other Courts, additional staff would be
required. The fact therefore, remain that the Central Government should take
immediate steps to set up an independent machinery to assist the DRT and during
the concessional period this Court is of the view that notwithstanding transfer
of suits and proceedings to DRT this Court can continue to give appropriate
directions to the Court Receiver, High Court, Bombay regarding management of the
assets and properties in the hands of the Court Receiver till the receiver
appointed by the DRT takes charge of the said assets and properties."
The other relevant observations in paragraph 10 of the judgment reads thus :
"In the present matter, the suits are pending. The rights to possession of the
funds/properties held by the receiver have not been decided. In the
circumstances, it cannot be said that the Court Receiver appointed by this Court
stands automatically discharged after 16th July, 1999. Till such rights are
determined by DRT, the property remains custodia legis. Even after coming into
force of the DRT Act and the DRT the said rights to the possession of the
funds/properties, held by the receiver remain undecided and, therefore, till DRT
appoints its receiver under the DRT Act, 1993 this Court can certainly issue
directions on the reports of the Court Receiver regarding management and
protection of the assets which are custodia legis. The Court Receiver, High
Court, Bombay is hereby directed to act in all matters pending before her
regarding fixation and recovery of royalties, regarding fixation of sale price,
regarding implementation of agency agreements already executed, etc. In other
words in all cases where the Court Receiver is seized of the properties and
assets she is empowered to take all necessary steps to preserve and manage such
properties. I am informed that there are some cases in which the Court Receiver
was appointed prior to 16th July, 1999. However, before the Court Receiver could
take possession, the notification came to be issued. Such marginal cases are
kept for hearing on 10th March 2000."
The learned counsel for the respondent therefore contended that the directions
given to the Receiver, High Court, Bombay by the learned Single Judge in view of
the above referred observations cannot said to be without jurisdiction and
therefore the auction conducted by the Receiver, High Court, Bombay in view of
said directions cannot be unsustainable in law. It is contended by the
respondent that the Division Bench of this Court in case of Bank of
Tokyo-Mitsubishi which is evident from the observations made by the Division
Bench in paragraph 13 of the said judgment.
(
15. ) IN the instant case we have already observed hereinabove that this Court
is not called upon to decide whether the direction issued by Kapadia, J. in case
of I.C.I.C.I. Ltd. to the Receiver, High Court after the suits and proceedings
stood transferred on 16th July, 1999 are without jurisdiction and nullity and
therefore the auction sale conducted by the Court Receiver is unsustainable in
law. It is for the DRT to consider this aspect in the light of the facts and
circumstances involved in the proceedings before it and decide the same in view
of the decisions of the Apex Court and this Court cited and relied upon by the
petitioner as well as the respondent and therefore we do not propose to express
any opinion on the said issue at all, though, in this judgment we have
incorporated the relevant observations made by the Apex Court and this Court in
the decisions cited by the parties to the present petition. However, we would to
express that decree passed by Court without jurisdiction is nullity and that its
validity can be questioned whenever and wherever it is sought to be enforced or
relied upon even at the stage of execution and also in the collateral
proceedings. We are therefore of the view that order dated 22.2.2012 passed by
DRT dismissing the application of the petitioner for condonation of delay
without deciding the issue i.e. whether the auction conducted by the Receiver,
after the suits and proceedings stood transferred to DRT on 16th July, 1999 in
view of the directions issued by this Court was sustainable in law is not proper
and has resulted in denying the opportunity to the petitioner to contest the
issue on merits, which goes to the root of the matter and amounts to miscarriage
of justice.
(
16. ) THE learned counsel for the respondent has contended that the petitioner
has suppressed the material facts as well as taken shelter of falsehood and
misrepresentation and therefore this Court should not show any indulgence in
exercise of its extra ordinary jurisdiction under Article 226 of the
Constitution of India and writ petition should be dismissed on ground of
falsehood and suppression of material facts. It is no doubt true that the
petitioner has not mentioned in the pleadings of the petition the facts in a
proper chronology and in an orderly manner, however that by itself, in our view,
is not adequate enough to dismiss the petition on the ground of suppression of
material facts. We cannot ignore the fact that Tribunal by impugned order
rejected the application for condonation of delay without deciding the vital
issue of jurisdiction raised by the petitioner which strikes at the very
authority of the Court and such defect cannot be cured even by consent of the
parties and its invalidity can be questioned whenever it is sought to be
enforced. It is in these circumstance, we are of the view that the contentions
canvassed by the learned counsel for the respondent that the petition deserves
to be dismissed on the ground of suppression of material facts suffer from lack
of merits and is rejected.
It is made clear that merely because we have condoned the delay does not mean
that this Court has either held or expressed that the directions issued by this
Court to the Receiver, High Court, after the suits and stood transferred to the
DRT on 16th July, 1999 are proceedings without jurisdiction and nullity. We want
to reiterate that this issue is required to be decided by the DRT and not by
this Court in present writ petition and hence this Court has not expressed any
opinion in this regard whatsoever in the present case.
(
17. )
IT is well settled that the Legislature has conferred power to condone the delay
to enable the Courts and Tribunals to do substantial justice to parties by
disposing of matters on merits. Similarly, if the delay is not inordinate and
unexplained when is condoned the maximum that can happen is that a cause would
be decided on merits after hearing parties. At the same time the guiding
principle for a Court to exercise discretion while condoning delay should
normally be as to whether the appellant acted with reasonable diligence in
prosecuting the proceedings. The Tribunal and Court cannot ignore that refusal
to condone the delay if results in grave miscarriage of justice, Court would be
justified in such situation to condone the delay. It is well settled that when
the substantial justice and technical considerations are pitted against each
other, cause of substantial justice deserves to be preferred for the other side
cannot claim to have vested right in injustice being done because of a
non-deliberate delay. At the same time if the delay is inordinate, unreasonable
and totally unexplained Court is entitled to pass an appropriate order in the
facts and circumstances of such case, since, condoning the delay is not empty
formality. However judicial discretion needs to be exercised based upon
principles which will advance concept of substantial justice when no negligence
nor inaction nor want of bonafide is imputed to the appellant.
In the instant case the petitioner has raised the substantial issue that the
High Court had no jurisdiction to issue direction to the Receiver, High Court,
Bombay after 16th July, 1999 since all suits and proceedings stood transferred
to DRT with effect therefrom and therefore directions issued by the High Court
to the Receiver, High Court, Bombay were without jurisdiction and nullity. The
issue raised strikes at the very authority of the Court and therefore the
impugned order passed by the Tribunal dismissing the application for condonation
of delay without deciding a vital issue in the facts and circumstances of the
present case, in our view, undoubtedly has resulted in miscarriage of justice
and therefore the impugned order 22.2.2012 passed by the DRT is liable to be
quashed and set aside.
(
18. )
FOR the reasons stated hereinabove, we quash and set aside the order dated
10.4.2012 passed by DRAT as well as order dated 22.2.2012 passed by DRT and
condone the delay in filing Misc. Application (L) No. 34 of 2012 filed by the
petitioner which is restored to the file of DRT, Mumbai. DRT, Mumbai is directed
to decide the Misc. Application (L) No. 34 of 2012 on its own merits in
accordance with law and in the light of the law declared by the Apex Court and
High Court on the subject.
Rule made absolute accordingly. No order as to costs. After the Order was
pronounced, the learned counsel for the petitioner requested that interim order
passed by the DRAT vide Order dated 10.4.2012 may be continued till Misc.
Application (L) No. 34 of 2012 is decided by the DRT. Since the interim order is
in existence for a long time, same is continued for a period of six weeks from
today. It will be open for a party to seek appropriate order thereafter from the
DRT.
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litigant borrowers, guarantors and their advocates to visit the above link
periodically. If one finds judgments useful and favourable to the borrowers and
guarantors, he may mail the full text of such
judgment for publication on our web site.
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