KRITIKA AGRO INDUSTRIES PVT LTD vs BIHAR GRAMIN BANK on 31 December 2021

**JUDGMENT**

1. 1. This Miscellaneous Application has been filed by the applicant under section 22(g) and 22(h) of RDDB Act, 1993 for recalling the ex-parte order dated 22.03.2019 passed in O.A. NO. 579 of 2018.

2. 2. It is submitted by the Applicant that the applicant is a Pvt. Ltd. Company and others are its Director, Promoters and Guarantors.

3. 3. It is submitted that the promoters and petitioner company with a view to establish an Agro-based Industry, approached the Respondent Bank for Term Loan and Cash Credit facilities for running its Agro based business. On the request of Applicant, Respondent Bank sanctioned Term Loan of Rs.1413.83Lakhs and working capital limit of Rs.80.17 Lakhs.

4. It is submitted that Branch Manager of Respondent Bank in his appraisal note has categorically stated that the vegetables and some fruits are easily available on cheaper rate there and unit is viable.

5. It is further submitted that Respondent Bank illegally declared the account NPA without exhausting internal mechanism and filed O.A. No. 579 of 2018 before this Hon'ble Tribunal.

6. The applicant entrusted all defence papers and vakalatanama to their Advocate Mr. Awadhesh Jee in Patna. The applicant's Advocate did not appear in this Hon'ble Tribunal and this Tribunal decided the O.A. ex-parte against all defendants except Defendant No.3 and the said order and Judgment dated 22.03.2019 was received by applicants on 20.05.2019.

7. It is further submitted that the applicant will suffer irreparable loss and injury as the order against them has been passed ex-parte and that they could not defend the case. That for the ends of justice, applicants may not be allowed to suffer for the fault of their Advocate, as there is no laches, lapses on the part of the applicants and they may be allowed to submit their defence before this Hon'ble Tribunal.

8. In view of the above circumstances applicant prayed to allow this application and recall the ex-parte order dated 22.03.2019 passed in O.A. NO. 579 of 2018.

9. In reply thereto Respondent Bank filed an affidavit of Shri Akhilesh Kumar Singh, S/o Shri Narendra Singh, Branch Manager, Maturapur of Bihar Gramin Bank.

10. It is submitted therein that M.A. filed on behalf of the applicants is fully misconceived being devoid of any merit and as such, it is fit to be dismissed. It is further submitted that details of applicants have not been mentioned on whose behalf this application was filed.

**11.** That in the present application, the applicants have admitted about sanction of loan by the Bank. The ground taken in the present application for recall of Judgment dated 22.03.2019 is totally misleading and misconceived and only with intention to delay the recovery proceeding, hence the present M.A. has been filed, which is fit to be rejected.

**12.** It is further submitted that notices were sent to the applicant by registered/speed post thereafter notice was published in two newspapers for appearance. In OA Defendant No. 3 appeared and filed written statement and contested the case but applicants intentionally did not appear and they were proceeded ex-parte.

**13.** It is further submitted that OA filed on behalf of the Bank was fully examined by the Ld. Presiding Officer and after hearing Defendant No. 3 passed the Judgement in accordance with law and as such the present M.A. is fit to be dismissed. The defence taken for recall for the Judgement is not tenable as it was incumbents upon the applicants to see that the case is properly represented. That only with intention to delay the entire recovery proceeding, present M.A. has been filed, which is fit to be rejected.

**14.** On perusal of case records, it is observed that Applicant has filed a supplementary affidavit dated 02.08.2021 stating therein that Respondent Bank sanctioned a Term Loan of Rs.1412.83 Lakhs and working capital of Rs.80.17 Lakhs on 16.12.2013. It is further submitted that Respondent Bank on first count failed to notice how a unit of such huge capacity work with working capital of just Rs.80.17 Lakhs and on repeated request for enhancement of the same it failed to correct the limit of Cash Credit and due to this the applicant faced lot of difficulties in running his unit properly and it became a hindrance in smooth functioning of the unit and subsequently the unit failed to give the desired result.

**15.** It is further submitted that Government of Bihar gave a subsidy of Rs.500.00 Lakhs to the applicant's unit but the Bank also failed to capitalise the same. The Respondent Bank insured the loan and the unit was insured vide policy no. 5404041160100000403 of the New India Insurance Company Ltd. It is alleged that Bank did not take any steps when there was leakage of Ammonia gas and left the applicant to face all trauma caused by the Insurance Company.

**16.** It is further submitted that The General Manager, District Industries Centre, Samastipur vide his letter no. 489 dated 05.10.2016 stated therein that the applicant unit is an eligible unit for remission under clause 2(VI) and 3(II) of the Industrial Incentive Policy 2011. It further states that the unit is eligible for exemption in the tariff order of BERC with the effective date of new IIP, 2011 on the date of production or whichever is later up to five years. It also said that the unit is also eligible for 100% reimbursement of Electricity duty for seven years and this shows that unit started production from 04.02.2015. Despite this letter electricity Department never raised question on short payment and suddenly on 08.10.2017 came for disconnection of electricity of the unit. In this connection, applicant wrote a letter to G.M. District Industries Center, Samastipur on 10.10.2017 but no action was taken on the same, which also caused the failure of the unit.

**17.** It is further stated that Respondent Bank was just waiting for closure of the unit with cumulative efforts and declared the account NPA without any alimentation and warning and now from the reliable sources the applicant came to know that the Bank took valuation from valuer and he informed the Bank after his calculation that Rs.5,11,19,215/- is the distressed sale price of the unit and its land.

**18.** It is further submitted that applicant may be permitted to sell his unit on the price fixed by the Bank's valuer and further please to discharge him from the liability of the said loan.

**19.** In reply thereto, Respondent Bank filed reply on affidavit dated 17.06.2021 submitted therein that present M.A. NO. 103 of 2019 was filed in the year 2019 and reply on behalf of the Bank was also filed in the year 2019 and thereafter case was fixed for argument. Thereafter more than two years have passed when this supplementary affidavit and IA have been filed, which shows that to delay the recovery proceeding such tactics are being indulged into.

**20.** It is further submitted that in sanction letter it is categorically mentioned that it will be sole responsibility of the company to obtain subsidy as stipulated in the project.

**21.** It is further submitted that Bank sympathetically extended the start-up period of repayment of term loan from March, 2015 vide letter dated 10.02.2015 of the Bank and further before declaring the account as NPA, the applicant was requested to maintain the loan account.

**22.** It is further submitted that proposal is not acceptable to the Bank as total due amount as per recovery certificate is Rs.19,62,40,043/- together with pendentelite and future interest at the contractual rate from 01.11.2017 till realization of the entire sum along with costs. The mortgaged properties shall be sold through auction sale in accordance with law so that maximum value of the properties can be obtained.

**23.** It is further submitted that the notice was issued to the defendants through registered/speed post on 28.06.2018 and paper publication was made in two news papers on 21.08.2018 but it appears that the applicant intentionally did not appear as Defendant No. 3 was contesting the case.

DRT, Patna6MA 103 of 2019 (J)

**24.** It is further submitted that Judgement dated 22.03.2019 passed in O.A. No. 579 of 2018 has attained its finality as no appeal has been preferred before DRAT, Allahabad.

**25.** It is further submitted that Hon'ble Division Bench, Patna High Court vide Judgment dated 11.07.2017 in LPA No. 610 of 2014 and its analogous cases held that "The Debts Recovery Tribunal constituted under the provisions of the DRT Act has been conferred with certain powers as stated under section 22 of the DRT Act, which includes power of reviewing its decisions, however Rule 5-A of the DRT (procedure) Rules, 1993 clearly provides that any party treating itself aggrieved by an order made by the Tribunal on account of some mistake of error apparent on the face of the record desires to obtain a review of the order made against him, may apply for a review of the order to the Tribunal which had made the order.

**26.** In view of the above submissions it is evident that the present application has got no merit and it is fit to be rejected.

**27.** During the arguments the Ld. Counsel for the Applicant emphasized repeatedly that the Defendants have prima facie a good case in which they are bound to succeed. The irregularities on part of the Respondent Bank has not been considered by the Tribunal at the time of adjudication of the matter ex-parte, as there was no event for the Applicant herein to file written statement. Ld. Counsel for the Applicant further emphasized that the Defendants had entrusted their case to the Advocate and it was the duty of the Advocate to file written statement and participate in the proceedings and also if at all required, ask the Defendants to remain present before the Tribunal. The Ld. Counsel for the Applicant has further submitted that the Defendants can not be subjected to the lackadaisical approach of the Advocate. It has been also submitted that the Advocate was required to be diligent towards the Court, but his failure to observe his duty can not be assigned to the Defendants and they should not be made to suffer therefor. The Ld. Counsel for the Applicant has put reliance on 1981 AIR (SC) 1400 Rafiq and Anr vs Munsilal & Anr, wherein for the fault of the Advocate the Hon'ble Supreme Court had ordered to set aside the ex-parte judgment.

**28.** Ld. Counsel for the Respondent has vehemently denied all the submissions made by the Ld. Counsel for the Applicant and has drawn the attention of this Tribunal towards the supplementary affidavits of the Applicant, wherein there are discrepancies. It is further submitted by the Respondent that it is not clear from the application as to on whose behalf it has been filed. It is also submitted by the Ld. Counsel for the Respondent that the Applicants herein are deliberately buying time by way of present MA as the Defendant No.3 joined the proceedings and contested the case but the OA was decreed against them. Hence the Applicants are not entitled for any relief.

**29.** After hearing the rival contention of the counsels appearing on behalf of the parties and taking into the judgment/s relied upon, this Tribunal is of the considered view that though there is no delay in filing the securitization application, however, the delay, if any is entitled to be condoned.

Vide the present order the M.A. No. 103 of 2018 with Supplementary Affidavit dated 02.08.2021 shall be decided.

**30.** So far as the question of proceeding the matter ex-parte and the final decision basing thereupon is concerned the Hon'ble Supreme Court has held in Rafiq and Anr vs Munshilal and Anr 1981 AIR (SC) 1400 has held; *"The disturbing fact of the case is that under our present adversary legal system where the parties generally appear through their advocates, the obligation of the parties is to select his advocate, brief him, pay the fees demanded by him and trust the learned Advocate to do the rest of things. The party may be a villager or may belong to a rural area and may have no knowledge of the Court's procedures. After engaging a lawyer, the party may remain supremely confident that the lawyer will look after his interest. At the time of hearing of the appeal, the personal appearance of the party is not only not required but hardly useful. Therefore, the party*

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*having done everything in his power to effectively participate in the proceedings can rest assured that he has neither to go to the High Court to inquire as to what is happening in the High Court with regard to his appeal nor is he to act as a watchdog of the advocate that the latter appears in the matter when it is listed. It is no part of his job. Mr. A.K.Sanghi stated that a practice has grown up in the High Court of Allahabad amongst the lawyers that they remain absent when they do not like a particular Bench. Maybe he is better informed in this matter. Ignorance in this behalf is our bliss. Even if we do not put our seal of imprimatur on the alleged practice of dismissing this matter which may discourage such a tendency, would it not bring the justice delivery system into disrepute. What is the fault of a party who having done everything in his power and expected of him would suffer because of the default of his advocate. If we reject the appeal, as Mr. A.K.Sanghi invited us to do, the only one who would suffer would not be the lawyer who did not appear but the party whose interest he represented. The problem that agitates us is whether it is proper that the party should suffer for the inaction, deliberate omission, or misdemeanour of his agent. The answer obviously is in the negative. Maybe that the learned advocate absented himself deliberately or intentionally. We have no material for ascertaining that aspect in the matter. We say nothing more on that aspect of the matter. However, we cannot be party to an innocent party suffering injustice merely because his chosen advocate defaulted. Therefore, we allow this appeal, set aside the order of the High Court both dismissing the appeal and refusing to recall that order. We direct that the appeal be restored to its original number in the High Court and be disposed of according to law...."*

31. While considering the proposition as decided in the said matter the Hon'ble Supreme Court was of the considered view that parties generally trust their advocates to handle their matter in the Court of Law as most of them are not aware about the procedure of the Courts and any order emanating out of default of the lawyer should not be assigned to the Party and it can not be subjected to undue hardship therefor. In the present case the contention of the party is that they engaged a lawyer and had handed over documents of the case to him. In the present case the Applicant has even named the said Counsel.

32. In the subsequent additional affidavits the Applicant in a bid to give a new angle to its case for non-appearance to the extent of no service by way of alternative mode, which does not match with its original statement. Maybe the Applicants were not served by way of alternative mode but the service by way of the DRT, Patna9MA 103 of 2019 (J)

postal mode was affected and hence the Applicant has in its MA contended that he had handed over the documents pertaining to his case to an Advocate.

**33.** From the sequence of the incidents it can be gathered that the Applicant herein was duly served and consequent thereupon engaged a lawyer and also handed over him the documents pertaining to its case. However, it was the duty of the Applicant to contact its lawyer from time to time but in the instant case the Applicant lacked therein. Maybe for buying time or whatever, as allegations have been labelled their against by the Respondent Bank the Applicant waited till final disposal of the case and thereafter approached this Tribunal for setting aside the ex-parte judgment. In its MA and subsequent additional affidavits the Applicant has raised certain question in respect of the facilities granted to the Applicant, their advancement and certain concessions it was entitled for, which could be a ground for contesting the OA and would have been incorporated in the final order, had the Applicant given opportunity to contest its case. In the interest of justice the Applicant are entitled to be given an opportunity to contest their case. However, the Respondent is required to be compensated for the delay it has been subjected to for no error of it. Hence the Applicant is liable to pay a cost of Rs.50,000/- payable to the Respondent.

**34.** In view of the above findings this Tribunal is of the considered opinion that the Applicant should be granted opportunity to contest the OA as it was decided ex-parte against it due to non-action on behalf of the Advocate. Hence the final order dated 22.03.2019 passed in O.A. NO. 579 of 2018 is set aside with all consequential effects thereof qua the Applicant. However, the proceedings qua the Defendant No.3 shall remain continuing as those are consequent upon resistance made on this behalf and have got finality in absence of any assault thereof.

**35.** Hence MA No. 103 of 2019 stands allowed with above observations. All the applications pending therewith are disposed of in light thereof. All the interim orders hereby stand vacated.

A copy of this order be sent to the parties through speed post and through electronic mode as well. Order be uploaded on the Tribunal's website. File be consigned to the Record room.

Ranchi 31.12.2021

**(Sanjiv Kumar)** **PRESIDING OFFICER** **DRT, Ranchi** **Additional Charge, Patna** **31.12.2021**