Sri Chandrashekar C vs CANARA BANK on 20 January 2021

1. The present Miscellaneous Application (for brevity MA) has been filed by the petitioner to set aside the exparte order dated 05.03.2018 passed in original Application No.645/2017 and to contest the matter on merit along with an application I.A.3/2019 to condone the delay of 250 days in filing petition to set aside exparte order dated 05.03.2018.

2. It is the case of the petitioner that the Tribunal allowed the original application (for brevity OA) on 05.03.2018 against the petitioner for recovery of an amount together with interest and costs as mentioned in the OA.

3. It is submitted by the petitioner that he had availed an OCC Limit to the tune of Rs.1,50,00,000/- on 04.06.2015 for his business purpose after executing necessary loan documents and as a collateral security he had mortgaged his immovable property and deposited the title deeds with the respondent bank. It is submitted that the petitioner had made certain payment as per the terms of the agreement, however due to heavy loss in business he could not comply with the terms and condition of the sanction.

4. It is further submitted that the entire loan availed by the petitioner is adequately secured by the mortgage property and there was no alarming situation on the part of the respondent bank in so far as the recovery of the outstanding dues as the application was passing through a rough patch due to certain adverse conditions.

5. It is contended by the petitioner that the respondent bank had obtained an exparte order dated 05.03.2018 without service of notice and the petitioner has no knowledge about the OA filed by the respondent bank before this Tribunal and only during the 2^nd week of December 2018 when the officials of the respondent bank affixed the warrant of attachment of immovable property he came to know about the exparte order.

6. It is further contended that due to Non-service of notice/ summons, the petitioner could not contest the matter on merit. The entire loan was taken for the purpose of improvement of the business and due to unfavorable market situation, the loan could not be repaid in time. On these contentions' petitioner prayed to set aside exparte order by condoning the delay of 250 days.

7. The respondent bank filed objection submitting *inter alia* that the allegations made in the application are false. The petitioner is served with summon in the OA and he did not appear in response to the summons and hence he is placed exparte and matter is proceeded with which culminated in issuance of Recovery Certificate.

8. The further allegation that he is not served with summons is totally false and further allegation that he came to know the exparte order only in the 2^nd week of December 2018 is totally false and denied by the respondent bank. There is no valid and bonafide reasons assigned by the petitioner for the delay that occurred in filing the present application and the petition is filed only with an ulterior motive to drag on the proceedings. Further the petitioner has not properly explained the delay of more than 250 days and hence the application for condonation of delay and also the application to set aside exparte order dated 05.03.2018 are liable to be dismissed with costs.

9. *Heard submissions and perused the records of the case.*

10. A perusal of the materials on record would reveal the fact that the respondent bank filed the above OA before the Tribunal on 30.06.2017 for recovery of a sum of Rs. 1,94,14,420/- [Rupees One crore Ninety Four Laksh Fourteen Thousand Four Hundred and Twenty only] due together with future interest and costs from the petitioner and by sale of the mortgaged property.

11. The records would reveal that the bank had taken summons on the defendant in the OA by registered post acknowledgement due on 22.07.2017 directed to show cause within 30 days of the service of summons as to why the relief prayed for should not be granted.

12. The summons sent to the defendant has returned unserved with postal shara as not claimed'. Hence the Tribunal vide order dated 24.02.2018 placed the defendant as exparte.

13. In the above backdrop, the Tribunal after hearing the arguments advanced by the learned counsel for the respondent bank and on perusing the evidence adduced by the bank which are marked as Exts.A1 to A12 passed order in the above OA on 05.03.2018. Pursuant to the order dated 05.03.2018, Recovery Certificate No. 288/2018 was issued to the learned Recovery Officer on 05.03.2018 for recovery of the amount of Rs.1,94,14,420/- [Rupees One Crore Ninety four Lakhs Fourteen Thousand Four Hundred Twenty Only] with interest @ 18% p.a. including 2% penal interest compounded with monthly rest from the date of filing till realization.

14. The petitioners have come out with the instant applications before the Tribunal on 28.12.2018 seeking to set aside the exparte order dated 05.03.2018 by condoning delay of 250 days in filing the petition to set aside the exparte order. The sole reason cited by the petitioner to set aside the exparte order dated 05.03.2018 is that he has not served with the summon/notice issued from this Tribunal. However, it is palpable from the record that the petitioner is duly served with summons as per the unclaimed RPAD covers and since the defendant did not appear, he was placed and a final order in OA came to be allowed.

15. It is pertinent to mention here that the petitioner herein being aggrieved by the order passed by the Tribunal under S.19 of the RDDBFI Act ought to have challenged the exparte order before the Appellate Tribunal or to have file petition to set aside the final order within the period of limitation as prescribed under the Act before this Tribunal. The delay in filing an application to set aside the exparte order and the reason for his non appearance is very vague which lacks bonafides and does not support their case, no iota of proof has been put forth by him to substantiate the contentions.

16. Sub-section (24) of S.19 of the Recovery of Debts and Bankruptcy Act 1993 prescribes the time-limit of 180 day 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. It is thus evident that the remedies available to an aggrieved person under the Act are both expeditious and effective.

17. In so far as the delay of 250 days in preferring the petition to set aside exparte order is concerned, the party must show why he has not filed the application on the last day of limitation prescribed. That may inevitably mean that the party will have to show sufficient cause not only for not filing the application on the last day but to explain the delay made thereafter day by day. In other words, in showing sufficient cause for condoning the delay, the party may be called upon to explain for the whole of the delay covered by the period between the last day prescribed for filing the application and the day on which the application is filed. In the instant case the petitioner has not come out with any cogent reason which prevented them to approach the Tribunal within limitation.

18. The instant application manifestly appears to be an abuse of the process of this Tribunal and a calculated attempt to protract the proceedings to delay the recovery of money due the secured creditor bank. As the petitioner had acted negligently in putting forth their defence, if any, from the initial stage of the case, the order passed by the Tribunal on 05.03.2018 is not liable to be set aside in the absence of any sufficient cause or good cause to do the same.

19. For the foregoing reasons, this Tribunal holds that I.A.3/2019 an application of condonation of delay is devoid of any merits and therefore fail.

20. In the result, I.A.3/2019 for condonation of delay is dismissed. Consequently, MA.No.53/2020 also stands dismissed. Pending IA/s are also disposed of in terms of this Order. There is no order as to costs.

*(Dictated to the Stenographer, after its transcription and necessary corrections, signed and pronounced by me in the Open Court on this day 20^th January 2021)*

**Sd/-** **Presiding Officer** **DRT-2, Bengaluru.**

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