SRI SHIVAJI HEGDE PARTNER S B PRISTINE vs BANK OF BARODA on 30 October 2024

**IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU**

Dated this the 30^th day of October 2024

**Present: Sri. Imtiaz Ali Hon`ble Presiding Officer In-charge**

**IA.No.735/2023 in MA.No.19/2023 in OA.No.235/2019**

**BETWEEN:**

Sri. Shivaji Hegde Partner – S.B. Pristine C/o. M/s. Pristine Inc., Flat No.3, Devasandra Indl. Area Opp. Garudacharpalya Bus stop, Bengaluru – 560048

Also at Sri. Shivaji Hegde No.912, 80 ft. Road 6^th Block, Sony World Circle Near Mahindra Showroom Koramangala, Ejipura Bengaluru-560095

Sri. Shivaji Hegde

Embassy Meadows ST Bed Layout, Koramangala Bengaluru-560034

... **APPLICANTS/ DEFENDANTS**

**AND**

Bank of Baroda Having head office at Mandvi, Baroda and branch office at "Sanskriti Signal", No.76, 1^st Cross, BTM Layout, 2^nd Stage, Bengaluru – 560068

2MA.No.19/2023

Rep. by its Chief Manager Mr. Mustaq Ahmed Shaik

2. Sri. Umashankar Dixit M Partner M/s. S.B. Pristine No.6, 2^nd Main Road, Arakere, Bannerghatta Road, Bengaluru – 560076

Also at: Sri. Umashankar Dixit M C/o. Step Up 46, No.912, 80 ft. road, 6^th Block, Sony World Circle, near Mahindra Showroom, Koramangala, Ejpura Bengaluru – 560095

Sri. Umashankar Dixit M

Embassy Meadows, ST Bed layout, Koramangala, Bengaluru-560034

3. M/s. S.B. Pristine No.6, 2^nd Main Road, Arakere, Bannerghatta Road Bengaluru – 560076

Also at: M/s. S.B. Pristine C/o. Step up 46, No.912, 80 ft. road, 6^th Block, Sony World Cicle, Near Mahindra Showroom, Koramangala, Ejpura, Bengaluru – 560095

Embassy Meadows, ST Bed layout, Koramangala, Bengaluru-560034

**... RESPONDENT/ APPLICANT**

**Counsels on record/appeared for:**

Applicant : Sri. J.N. Gangadariah Respondent No.1 : Sri. Vignesh Shetty Respondent Nos.2 & 3 : Exparte

3MA.No.19/2023**:ORDER on MA:**

The present miscellaneous application is filed by the defendant, in OA No.235/2019 u/s.22(2)(g) & (h) read with Section 19(25) of the Recovery of Debts due to Banks and Financial Institutions Act, with a prayer to set aside the Exparte Order passed in OA.No.235/2019 dated 27.12.2021 (Annexure-A2).

2. The case as put forth by the applicants is that the applicant did not receive the summons/notice from this Tribunal and has not received free copy of the Final Order dated 27.12.2021. The 2^nd respondent being the Managing Partner who was looking after the affairs of the petitioner's firm. As such, the applicant's had no knowledge about the OA proceedings. The applicant's came to know about OA proceedings when he received summons from this Tribunal in RC.No.48/2022 in the month of May 2022. Thereafter, the petitioner has verified the records in the Tribunal and came to know that 1^st respondent had obtained the exparte decree/order in recovery proceedings for sum of Rs.52,45,249/- in OA.No.235/2019 which came to be allowed on 27.12.2021. Immediately, the petitioner applied for the certified copies of the final order, entire order sheets and copy of the 4MA.No.19/2023

petition before the Tribunal and obtained it on 29.09.2022 which are marked as Annexures A1, A2 and A3.

3. It is submitted that in the OA.No.235/2019, the applicant is the 2^nd respondent, 3^rd respondent are the Managing Partner and 1^st respondent is the Partnership Firm. The applicant did not appear before this Tribunal in OA.No.235/2019 proceedings to put forth his defense and contest the matter on merits due to non-service of summons/notice on him, but the Tribunal has passed final order in OA.No.235/2019 on 27.12.2021 placing this applicant/petitioner as exparte.

4. It is further submitted that the applicant is not liable to pay the claim of the 1^st respondent bank as claimed in the demand notice of RC.No.48/2022 dated 08.04.2022 which came to his knowledge in the month of May 2022.

5. The present Miscellaneous Application is filed on 06.04.2023 with a delay of 436 days. Hence, the applicant has filed IA.No.735/2023, a petition to condone the delay of 436 days.

6. The respondent No.1 bank has filed objections to the main petition and to IA for condonation of delay inter alia contending that the present application is devoid of merits, misconceived, frivolous and vexatious, the application is filed with 5MA.No.19/2023

malafide intention to frustrate the recovery proceeding against the applicant and to delay the proceedings of recovery of legitimate dues to respondent bank.

7. It is submitted that the applicant has failed to place this present appeal before this Tribunal within the speculated limitation, hence, the present appeal stands to be dismissed *prima facie* on the grounds of limitation. The present appeal is filed with a delay which is violative of the limitation to file an appeal which is of 30 days. The applicant was in knowledge of the proceedings initiated in the OA.No.235/2019.

8. It is contended that the Tribunal has issued summons to the applicant/s by way of RPAD which was duly served upon the applicant/s/respondent/s. Subject to the same, the applicant/s did not adhere to appear before this Tribunal. Hence, the applicant/respondent/s were placed *exparte* on 30.03.2021, later this Tribunal allowed the OA.No.235/2019. The claim of the applicant is that there is no alternative remedy. Hence, the respondent bank prays to dismiss the application with cost.

*Heard the submissions of the applicant counsel and perused the available records of the case.*

6MA.No.19/2023

9. The present Miscellaneous Application is filed by the defendant/s in the OA. The applicant is one of the borrowers to the credit facility availed. It is admitted fact that the applicant herein had availed cash credit facility of Rs.50,00,000/- on 05.10.2013 for the purpose of garment business.

10. There is no dispute with regard to the execution of the loan documents, creation of the properties as security towards the credit facility. As the applicant here in defaulted to repay the loan amount, the respondent bank has filed OA.No.235/2019 for recovery of an amount Rs.52,45,249/- (Rupees Fifty Two Lakh Forty Five Thousand Two Hundred Forty Nine only).

11. Further, in the OA, summons were duly served but the applicant/defendant/s did not choose to contest the matter, on the other hand, remained silent. Hence, this Tribunal set him as exparte and the final order came to be passed on 27.12.2021.

12. The averments in the Para.No.5(c) & (d) clearly reflects that OA.No.235/2019 came to be allowed and Recovery Certificate was drawn in RC.48/2022. It further reflects that respondent have also initiated proceedings and issued demand notice dated 08.04.2022.

7MA.No.19/2023

13. It is pertinent to note that the applicant/s herein did not contest the OA, hence the claim of the bank was allowed based on the documents and evidence adduced by them in the OA.No.235/2019. The application only highlights the admission of loan and execution of loan documents and fact of knowledge of the applicant with regard to the measures initiated by the bank in recovering the amount due in the loan account and only highlights that the applicant/s was sleeping over his rights in contesting the matter either in the OA nor in the recovery proceedings under the Recovery Certificate.

14. The issue for consideration is whether the applicant/defendant has made a case to condone the delay of 436 days in filing the application?

15. On perusal of the final order passed by this Tribunal in O.A. No.235/2019, it is seen from the records in the OA that the Defendants were duly served with the OA summons as seen recorded in the Final Order dated 27.12.2021 and there was no representation for defendants even after due service of the summons, the Defendants remained exparte. The applicant bank adduced the evidence and based on the records, an Exparte Order in OA.No.235/2019 was passed on 27.12.2021. Hence, the contention of the applicant/defendant that the applicant came to 8MA.No.19/2023

know about OA.No.235/2019 only after receiving the demand notice of RC.No.48/2022 dated 08.04.2022 copy by the Debt Recovery Tribunal is unsustainable.

16. Even according to the IA filed by applicant along with the Affidavit for condonation of delay, there is a delay of 436 days in filing the MA and as such, there is no explanation put forth by the applicant in filing the MA at a belated stage with an enormous delay of 436 days. The applicant has come out with untenable averments that no summons served, hence he could not contest the matter. Further, there are no plausible reasons put forth by the applicant for each day's delay in filing the MA. It is a settled legal proposition that, law of limitation may harshly affect a particular party, but it has to be applied with all its rigour when the statute so prescribes.

17. In the instant matter, applicant has not given any valid and *bona fide* reasons nor made out sufficient cause for the delay in filing the application, where in the application, the applicant is required to explain each and every day's delay as mandated under Section 5 of the Limitation Act and hence, the explanation of the applicant that he is not aware of the proceedings is blatant lie as records reveal that summons were duly served on the applicant. Further, the applicant has not made 9MA.No.19/2023

a justifiable case for condonation of 436 days delay and it is settled position of law that each day's delay has to be justified or a proper cause be made out to condone the delay.

18. It is axiomatic that condonation of delay is a matter of discretion of the Court. However, while there is no sufficient cause assigned by the petitioner/s for the inordinate delay of 436 days without there being a locus in preferring the application praying to set aside the final order passed in the OA.

19. It is the settled legal position that an ex-parte order against defendant has to be set aside if the party satisfies the court that summons had not been duly served or he was prevented by sufficient cause from appearing when the suit was called on for hearing; however, the court shall not set aside the said order on mere irregularity in the service of summons or in a case where the defendant had notice of the date and sufficient time to appear in the court.

20. Sub-section (24) of S.19 of the Recovery of Debts and Bankruptcy Act 1993 prescribes the time-limit of 180 days within which an application made under S.19 is required to be disposed of. The proviso to this sub-section envisages extension of time, but the outer limit for adjudication of an application is six months.

10MA.No.19/2023

It is thus evident that the remedies available to an aggrieved person under the Act are both expeditious and effective.

21. In so far as the delay of 436 days in preferring the MA and to set aside the exparte final order is concerned, the applicant has not come out with any cogent reason which prevented him from approaching the Tribunal within limitation.

22. It is pertinent to note that the reasons given by applicant herein/defendant for the enormous delay in filing MA are very vague which lacks bonafides, does not support his case and not an iota of proof has been put forth by him to substantiate his contention.

23. In the instant matter, the applicant has not justified the reasons for each day's delay and the Tribunal is not inclined to condone the delay even on equitable grounds. The Tribunal's opinion is justified by the judgement of Hon'ble Supreme Court in the case titled Lingeswaran vs Thirunagalingam | SLP 2054-2055/22 where it is held that the Limitation period cannot be extended on equitable grounds.

24. For the foregoing reasons, the Tribunal finds no ground or a prima facie case to condone the delay of 436 days. Accordingly, IA.No.735/2023 a petition to condone the delay of 11MA.No.19/2023

436 days is dismissed. Consequently, MA.No.04/2024 stands dismissed. Interim order granted, if any, stands vacated. Pending IA/s, if any, are disposed of in terms of the 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 30^th day of October 2024)*

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

APPENDIX

LIST OF DOCUMENTS PRODUCED BY THE APPELLANT

<table border="1"><thead><tr><th>SI No.</th><th>Particulars</th><th>Annexure</th></tr></thead><tbody><tr><td>1</td><td>Certified copy of the order sheet in OA.No.235/2019</td><td>A1</td></tr><tr><td>2</td><td>Certified copy of the Judgment and Decree passed in OA.No.235/2019 dated 27.12.2021</td><td>A2</td></tr></tbody></table>

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