CANARA BANK vs M/S.IDEAL TEXTILES REP BY ITS MANAGING DIRECTORR on 9 January 2025

1. M/s. Ideal Textiles No.30/2, 1^st Floor, S.R. Complex, Mangammana Palya Road, Bengaluru – 560068. Rep. by its Managing Partner

2. Mrs. Sheila Khemka Partner Apartment No.202, The SOL, 16, 3^rd Cross, Rustam Bagh, Bengaluru – 560017

3. Mr. Nayan Khemka Partner Apartment No.001, The SOL, 16, 3^rd Cross, Rustam Bagh, Bengaluru – 560017

4. Mr. Mahesh Khemka Guarantor, Apartment No.202, The SOL, 16, 3^rd Cross, Rustam Bagh, Bengaluru – 560017

... **APPLICANTS/ DEFENDANTS**

**AND**

Canara Bank Having its head office at No.112, J.C. Road, Bengaluru – 560002 Having its branch, Overseas Branch, 3^rd Floor, Ramanashree Arcade, 2MA.No.09/2023

No.18, M.G. Road, Bengaluru-560001 Rep. by its Asst. General Manager

**... RESPONDENTS/ APPLICANTS**

**Counsels on record/appeared for:**

Applicant : Sri. Unnikrishnan M Respondent : Sri. D. R. Joshi

**ORDER on MA**

The present miscellaneous application is filed by the defendants, in TA No.52/2017 u/s.22(2)(g) read with Section 19(25) of the Recovery of Debts due to Banks and Financial Institutions Act, with a prayer to stay the execution of impugned Order passed in TA.No.52/2017 dated 05.11.2022 (Annexure-A) consequently stay the operation of the Order dated 05.11.2022 in TA.No.52/2017.

2. The case as put forth by the applicants is that the respondent bank has filed an Original Application numbered OA.No.1369/2016 which was converted to TA.No.52/2017 for recovery of Rs.4,71,46,906/- for loans availed by them.

3. The applicants submits that during the course of proceedings the petitioner filed an application for recall the order dated 05.08.2021 and permit the petitioner/defendant's to lead evidence. However, it came to the knowledge of the petitioner/defendant that the petitioners No.2 and 3 i.e. the 3MA.No.09/2023

Defendant's No.2 &3 in TA.No.52/2017 were placed ex-parte. On request of the petitioner/defendant's counsel this Tribunal was pleased to grant petitioner/defendants time to file necessary applications and listed the matter on 20.09.2022.

4. It is submitted that the applicant counsel being a junior advocate was unaware of the procedure of this Tribunal and did not know that the applications had to be filed prior to the date of hearing i.e., on 20.09.2022. The counsel under bonafides presumption that the said applications could be filed in open court had approached this Tribunal. However, this Tribunal did not take applications and evidence of the petitioners on record on the ground that the same had to be filed prior to the date of hearing and proceeded to post the matter for order on 05.11.2022.

5. It is submitted that the averments regarding the execution of documents covering the aforesaid loan is true, and the claim that the liabilities of the guarantors are not joint and several as claimed by the respondent/applicant is denied. The Deed of Guarantee does not make the guarantor i.e. the petitioner/defendants No.4 to be liable for the entire liability.

6. It is submitted that the averments that the petitioners/defendants failed to keep up the repayment schedule as agreed by them and were not regular in repayment of loan and 4MA.No.09/2023

from 31.03.2015, the operation and conduct of the financial assistance had become irregular and the operation of the account has come to a virtual standstill and thus on 31.03.2015, the respondent/applicant bank classified the account of the first defendant as a Non Performing Asset is not stated in its right perspective.

7. The applicants submit that the necessary application for recall and evidence filed on the same date of hearing i.e, 20.09.2022 which was not considered while passing Orders.

8. The applicants submits that without hearing the contentions put forward by the petitioner/defendant and without appreciating/recording the evidence filed by the petitioner/defendant. Hence, the applicants/defendants prays to recalling the order dated 05.11.2022 passed in TA.No.52/2017.

9. The respondent bank has filed objections inter alia contended that the present application is filed under Section 22(2)(g) of the RDB Act, 1993 is maintainable only if the Tribunal has passed an order of ex parte and not otherwise. The final order passed by this DRT in TA.No.52/2017 is not an ex parte order as the same was contested by the applicants and the order passed by the Tribunal is a detailed and reasoned order. The order/judgment passed on merit is not an appealable order, 5MA.No.09/2023

except as per Section 20 of the RDBI Act. Further, there is no provision under the RDBI Act for an intra-appeal, the Tribunal cannot review its order passed on merit. Therefore, the present application filed by the applicants is not maintainable and against the settled principles of law.

10. It is contended that the applicants who have entered their appearance in TA .No.52/2017 and have filed their detailed written statement contesting the TA. Therefore, there arises no question of DRT having passed an order ex parte. The applicant have urged all their grounds and contentions before the DRT and the DRT has passed a detailed order discussing the contentions of both sides. The applicants by filing the present application are trying to circumvent the procedure established by law and the settled principles of law. The present application is a frivolous application filed by the applicants in abuse of the procedure established by law. Section 22(2)(g) of the RDBI Act is clear as to when the DRT can exercise its jurisdiction and the present application fails to meet the requirements as provided under the RDBI Act warranting this Tribunal to exercise its jurisdiction. Therefore, the present application filed by the applicants is not maintainable, the application to be dismissed in limine with exemplary costs. The contentions raised by the applicants are all 6MA.No.09/2023

denied as false, untenable. Hence, the respondent bank prays to dismiss the application in limine with exemplary costs.

*Heard the submissions of both the counsels and perused the available records of the case.*

11. The present Miscellaneous Application is filed by the defendants in the OA. The 1^st applicant/1^st defendant is a partnership firm and applicant/defendant No.2 to 4 are the guarantors to the loan. It is admitted fact that the applicants herein had availed various financial facilities from the respondent bank.

12. There is no dispute with regard to the execution of the loan documents, creation of the properties as security towards the credit facilities. As the applicants here in defaulted to repay the loan amount, the respondent bank has filed TA.No.52/2017 for recovery of an amount Rs.4,71,46,906/- (Rupees Four Crore Seventy One Lakh Forty Six Thousand Nine Hundred and Six only).

13. Further, in the OA summons were duly served on the defendants through registered post. Defendants entered appearance through counsel and filed written statement. However, they failed to lead the evidence and the final order came to be passed on 05.11.2022.

7MA.No.09/2023

14. It is pertinent to note that the applicants have taken the contention that this court has passed ex parte order in TA.No.52/2017 is unsustainable, wherein, in TA.No.52/2017 the applicants contested by filing written statement and this Tribunal has passed a detailed order discussing the contentions of both sides. On the contrary, all the applicants are duly represented by their Advocates and the same is recorded in the final order passed by this Tribunal where defendant Nos.1,3 and 4 were represented by Advocate Sri. Unni Krishnan M and defendant No.2 was represented by Advocate Mr. Nagendra H.C. Therefore the contention of the applicants that they were placed ex parte is untenable.

15. The applicants have taken contention that the applicants counsel being a junior advocate was unaware of the procedure of this Tribunal and did not know the recall applications had to be filed prior to the date of hearing i.e. on 20.09.2022 is baseless, wherein pleading ignorance of the procedure of this Tribunal cannot be a ground for filing the present application. It is a settled principle of law that "*ignorantia corum guae scire tenetur non excusat*" which means "ignorance of those things which everyone is bound to know excuses not", hence, a procedure of the court which every advocate practicing before a 8MA.No.09/2023

court ought to have known could not be executed for not knowing so. Therefore, the said contention is unsustainable.

16. It is pertinent to note that the applicant admitted the execution of the loan and loan security documents and now cannot challenge the order passed on merit mainly based on the documents produced by the respondent bank. Further, it is a settled principle of law that the liability of the guarantors are joint and several and coextensive with that of the principal debtor. The applicants have taken the same contention in their written statement to in TA.No.52/2017 and the same was discussed by this Tribunal while passing final order in TA.No.52/2017.

17. It is apt to mention that the applicants re-agitated their contentions that were already taken before this Tribunal in TA.No.52/2017 and the Tribunal has passed the detailed order considering the contentions raised by both sides. The applicants were given sufficient chance to lead their evidence in support of their contentions. However, the applicants have forfeited the same by not leading any evidence before this Tribunal. Therefore, at this stage in the present application, now they cannot contend that this Tribunal has passed the final order without considering the evidence led by them.

9MA.No.09/2023

18. On perusal of records, it is submitted that defendants have filed IA.No.2730/2022 a petition to recall the order dated 05.08.2021 to reopen the case for leading evidence on behalf of the defendants. The defendants have filed the IA on 20.09.2022 after the case was reserved/posted for orders. As per the order passed by Hon'ble Karnataka High Court in terms of Rabiya Bi Kassim M. vs The Country Wide Consumer dated 05.04.2004 it was held that once the matter has been heard and posted for judgement, nothing is required to be done by the Court except to pronounce the judgment – Interlocutory Application to reopen the case and record further evidence after the matter is reserved for pronouncement of judgment, is not permissible – No application can be filed after the final arguments have been heard and the matter is posted for judgment.

19. The contentions raised in the present MA are in the nature of an appeal where the applicants have made effort to challenge the order passed by this Tribunal dated 05.11.2022 in TA. If the applicants are aggrieved by the order passed in TA.No.52/2017, the remedy available to the applicants is to file an application to set aside the order under S.20 of the RDB act.

20. For the foregoing reasons, the present Miscellaneous Application fails. Accordingly, MA.No.09/2023 stands dismissed.

10MA.No.09/2023

Interim Order granted, if any stands vacated. Pending IA's are also disposed of in terms of this order. No order as to cost.

*(Dictated to the Stenographer (PR), after its transcription and necessary corrections, signed and Order is passed on this day 09^th day of January 2025)*

✓ 9.01.25 **(IMTIAZ ALI)** **PRESIDING OFFICER** **I/c DRT-2, BENGALURU**