M S KANPUR MILKPROUCTS PVT LTD vs CENTRAL BANK OF INDIA on 20 September 2024

**ORDER**

1. 1. The applicant/defendant no.3 had filed this M.A. under section 22(2)(g) of the Recovery of Debts & Bankruptcy Act, 1993 for recalling the exparte judgment and order dated 29.3.2022 passed in O.A. No. 104 of 2004.

2. 2. The applicant/defendant no.3 had filed this Misc. Application for recalling the order dated 29.3.2022 along with one delay condonation application with the averments that the management of the defendant no.1 was changed in the month of 09.11.2000 with the consent of the applicant bank and thereafter new directors namely Mr Sudhish Kumar (Defendant No. 5) and Mr. Anil Krishana Narayan (Defendant No. 6) were inducted in place of Mr. Ashustosh Narain Pandey (Defendant No. 2) and Mr. Rakam Singh (Defendant No. 4) and the applicant of the present M.A. namely Laxman Singh (Guarantor) (Defendant No. 3) was also replaced by new guarantors namely Mr Vinod Bihari Saxena, Mr. Hari Ram Ladhani and Mr. Anant Pandey (defendant no.7, 8 & 9). The management of defendant no.1 had filed particulars of appointment of directors in Form No. 32 of the Companies Act, 1956 on payment of requisite fee with ROC. Thus the guarantee of defendant no.3 had become nonest and is not legally enforceable after execution of new loan agreement on 10.08.2021.

2M.A. No. 99 of 2022

1. 3. The applicant/defendant no. 3 had come to know about the OA only on 9.4.2022 when his brother who is financial consultant had informed him. On receiving this information, the applicant/defendant no.3 engaged an advocate at Lucknow and on enquiry it was informed to the applicant that O.A. No. 104 of 2004 filed by the Central Bank of India against M/s Kanpur Milk Products Pvt. Ltd. and prior to the said information the applicant had no knowledge of the pendency of O.A. nor did he ever received any notice/information from this Tribunal during the pendency of the proceeding.

2. 4. The advocate of the applicant had inspected the file on 29.4.2022 and thereafter applied for the certified copy of the order sheet and ex-parte judgment. The certified copy was made available to him on 29.4.2022 itself. From the record it is transpired that no notice of the OA proceeding was served upon the applicant. The bank had concealed the discharge of the applicant from the guarantee. The bank had also concealed that the secured asset had been sold at Rs.80.00 lacs and the bank had received insurance claim of Rs.30.00 lacs. It is submitted that the surety/guarantee of the applicant/defendant no. 3 had been discharged in terms of section 133 of the Indian Contract Act, 1872. He prayed for recalling the ex-parte order dated 29.3.2022 passed in the O.A. No.104 of 2004.

3. 5. In the delay condonation application, the applicant had reiterated the facts stated in the recall application and stated that prior to 09.4.2022 the applicant was not aware of the pendency of the O.A. and no notice had been served upon him. From the date of production of the certified copy of the order sheet and ex-parte judgment, the present M.A. is well within limitation and prayed for condonation of delay.

4. 6. Heard the ld. counsel for both the parties and perused the record. The bank appeared in the case, but had failed to file its written objection to negate the averments made in the M.A.

5. 7. After filing of the O.A. before this Tribunal, the notices were issued to the defendants under the orders of this Hon'ble Tribunal. According to the file O.A. No.104 of 2004, the applicant of Misc. Application was defendant no.3. The instant M.A. has been filed by defendant no. 3. The O.A. was decided by this Tribunal on 29.3.2022 and the proceedings of DRC had commenced.

3M.A. No. 99 of 2022

1. 8. According to order sheet of the OA the summons/notices were sent to the defendants pursuant to the order dated 11.8.2004 but no report is reflected in the order sheet regarding service upon the defendant no. 3. The publication was ordered in respect of defendant no.1, 4, 5 & 9. It is further seen from the record that only defendant no. 8 had appeared and contested the O.A. but at the last stage of proceeding the defendant no. 8 also failed to appear, hence the case was proceeded ex-parte. From the record it is also reflected that except defendant no.8 no other defendant had appeared. Hence, the service of notice upon defendant no.3 (applicant of this M.A.) issued from DRT Lucknow is not clear. The case was decided ex-parte against applicant on 22.3.2022. The copy of ex-parte judgment was not sent to applicant. There is no proof of service regarding supply of free copy of judgment as per Rule 16 of the Debts Recovery Tribunal (Procedure), Rules, 1993 to the parties in the record file of said case.

2. 9. It is the further averment of the applicant in the M.A. that the management of the defendant no.1 was changed in the month of Novemeber, 2020 with the consent of the applicant bank and and thereafter new directors namely Mr Sudhish Kumar (Defendant No. 5) and Mr. Anil Krishana Narayan (Defendant No. 6) were inducted in place of Mr. Ashustosh Narain Pandey (Defendant No. 2) and Mr. Rakam Singh (Defendant No. 4) and the applicant of the present M.A. namely Laxman Singh (Guarantor) (Defendant No. 3) was also replaced by new guarantors namely Mr Vinod Bihari Saxena, Mr. Hari Ram Ladhani and Mr. Anant Pandey (defendant no.7, 8 & 9). The guarantee of defendant no.3 had become nonest and is not legally enforceable after execution of new loan agreement on 10.08.2021. Once the bank had admitted resignation and change of management and the bank had also admitted replacement of defendant no.7, 8 & 9 in place of defendant no.2, 3 & 4, it appears that bank had wrongly filed OA against the defendant no.3 (applicant) and had obtained decree from this Tribunal. However, the facts mentioned in the M.A. was not available at the time of disposal of the O.A. therefore, the liability of the defendant no.3 requires fresh determination.

3. 10. The above fact indicate that service was not sufficient on applicant no.3 in the proceeding of O.A., the delay in filing the M.A. is, therefore, liable to be condoned. The exparte judgment passed against applicant/defendant no. 3 only is also liable to be set aside.

4M.A. No. 99 of 2022ORDER

The delay condonation application moved under Section 5 of the Limitation Act is allowed.

The exparte judgment passed against the defendant no.3 in OA No. 104 of 2004 on 29.3.2022 is set aside against defendant no.3 only.

The Recovery Officer can proceed against the remaining Judgement Debtors in accordance with law.

The defendant no. 3 is directed to appear in OA No.104 of 2004 on 25.10.2024 before the Registrar. He is directed to file written statement.

Let the M.A. be consigned to record.

(A.H. Khan) Presiding Officer