SRI MAVAJI MUDDAPPA vs CANARA BANK (SYNDICATE BANK) on 29 August 2025

**ORDER**

IA 1908/2022 has been filed on 04.07.2022 under S.5 of the Limitation Act, 1963 r/w S.24 of the Recovery of Debts and Bankruptcy Act, 1993 (as amended from time to time) – for short 'the Act' - by the petitioners praying to condone the delay of 39 days in filing the aforesaid Unregistered Miscellaneous Application (UMA) Dy No.1594/2022. The petitioners are none other than defendants 1 to 3/certificate debtors 1 to 3 in OA 1309/2020.

2. The case set out by the petitioners/defendants 1 to 3/certificate debtors 1 to 3 in IA No.1908/2022 through the notary attested affidavit of the 1^st petitioner/1^st defendant/1^st certificate debtor accompanying the IA in brief is as follows:- These petitioners were not aware of the proceedings and have come to know about the fact recently only.

3. The 1^st respondent/applicant bank/certificate holder filed statement of objection contending as follows:- Summons in the OA were duly served upon the petitioners. On the above contentions, the 1^st respondent/applicant bank prayed for dismissal of the application with costs.

4. The only point arises for consideration is as to whether the petitioners/defendants 1 to 3/certificate debtors 1 to 3 are entitled to the relief prayed for?

5. The Point:- The 1^st respondent/applicant bank/certificate holder filed OA 1309/2020 on 21.10.2020 under S.19(1) of the Act for recovery of the sum of ₹68,05,802/- due under term loan account No.1398540001590 with interest thereon Typed by Kripa

@13.85% per annum with monthly rests from defendants 1 to 3 jointly and severally and by sale of A schedule mortgaged immovable properties and B schedule hypothecated standing crops; the sum of ₹14,54,387/- due under agricultural term loan account No.0139/235/10 with interest thereon @14.25% per annum with monthly rests from defendants 1 to 4 jointly and severally and by sale of A schedule mortgaged immovable properties and B schedule hypothecated standing crops and the sum of ₹12,08,180/- due under overdraft account No.801/874 with interest thereon @11.50% per annum with monthly rests from defendants 1 to 4 jointly and severally and by sale of A schedule mortgaged immovable properties and B schedule hypothecated standing crops.

6. The said OA was allowed as prayed as per the final order dated 25.04.2022. Pursuant thereto, a recovery certificate bearing No.250/2022 was issued on 01.07.2022 to the Recovery Officer for recovery of the certificate debt.

7. The petitioners/defendants 1 to 3/certificate debtors 1 to 3 on 04.07.2022 filed UMA Dy No.1594/2022 to set aside the aforesaid final order as against them and they have come up with this petition to condone the delay of 39 days in filing the same. According to the petitioners/defendants 1 to 3/certificate debtors 1 to 3, they were not aware of the proceedings and have come to know about the fact recently only. Per contra, according to the 1^st respondent/applicant bank/certificate holder, they were duly served with summons and, therefore, no sufficient reason has been shown by them in the petition to condone the delay.

8. A perusal of the OA records shows that summons in this case was sent to the petitioners/defendants 1 to 3/certificate debtors 1 to 3 by registered post and the 2^nd petitioner/2^nd defendant/2^nd certificate debtor was duly served with summons on 12.04.2021 and petitioners 1 and 3/defendants 1 and 3/certificate debtors 1 and 3 were duly served with similar summons on 13.08.2021. But they never appeared nor were they represented in the proceedings and thus they were declared ex-parte in the proceedings on Typed by Krip

05.04.2022. Resultantly, the impugned final order was passed against them on 25.04.2022.

9. S.24 r/w S.2(b) of the Act says that the provisions of the Limitation Act, 1963, shall, as far as may be, apply to an OA filed under S.19(1) of the Act. Needless to say, the instant application is governed by Art.123 of the Limitation Act, 1963, which reads as follows:- <table border="1"> <thead> <tr> <th>Article</th> <th>Description of suit</th> <th>Period of limitation</th> <th>Time from which period begins to run</th> </tr> </thead> <tbody> <tr> <td>123</td> <td><i>To set aside a decree passed ex-parte or to re-hear an appeal decreed or heard ex-parte.</i></td> <td><i>Thirty days</i></td> <td><i>The date of the decree or where the summons or notice was not duly served, when the applicant had knowledge of the decree.</i></td> </tr> </tbody> </table>

10. A careful reading of Art.123 of the Limitation Act, 1963 would clearly show that when summons is duly served on defendant, the period of limitation for filing an application for setting aside a decree passed ex-parte will begin to run not from the date of knowledge of the decree but from the date of the decree itself. Irrefragably, the petitioners/defendants 1 to 3/certificate debtors 1 to 3 were duly served with summons in the OA on 12.04.2021/13.08.2021. The ex-parte final order was passed against them only on 25.04.2022. Therefore, UMA Dy No.1594/2022 ought to have been filed on or before 25.05.2022. But they filed the above application beyond such period i.e., only on 04.07.2022. Thus, there is a delay of 40 days in filing such application.

11. S.22(2)(g) of the Act r/w O.9 R.13 of the Code of Civil Procedure, 1908 provides for setting aside an ex-parte final order against a defendant, which provides for two reasons, namely (i) summons was not duly served and (ii) sufficient cause preventing the defendant from appearing when the suit was called on for hearing. Undisputedly, the petitioners/defendants 1 to 3/certificate debtors 1 to 3 were duly served with summons in the OA on 12.04.2021/13.08.2021. In the above circumstances, their contention to the tune that they were not aware of the proceedings is only an outright lie, which belies their contention. Although they have contended that they knew about the fact recently only, Typed by: Raj they have not furnished the exact date of knowledge of the proceedings. They have also not pleaded as to how they could be aware of the proceedings. Thus, the reasons shown by the petitioners/defendants 1 to 3/certificate debtors 1 to 3 are only vague and they raised such contentions for the sake of the application only. They have not shown any sufficient and valid reason for their non-appearance in the proceedings. In the above circumstances, the contention raised by the petitioners/defendants 1 to 3/certificate debtors 1 to 3 to the effect that they were not aware of the OA proceedings and could be aware of such proceedings recently only cannot be believed even for a moment, which is only an outright lie. They were aware of the OA proceedings but they chose to abstain from the proceedings. If they wilfully abstained from the proceedings it is at their risk and responsibility only. One cannot take advantage of one's own default.

12. This Tribunal is required to weigh the explanations offered by the petitioners/defendants 1 to 3/certificate debtors 1 to 3 and the acceptability of the same. The delay in this case reflects the inactivity and the inaction on the part of the petitioners/defendants 1 to 3/certificate debtors 1 to 3. The law does not permit one to sleep and to seek one's relief as and when one desires. The failure on the part of the petitioners/defendants 1 to 3/certificate debtors 1 to 3 in not showing due diligence in filing the Miscellaneous Application at the right time and the delay taken in filing the same can only be construed, in the absence of any valid explanation, as gross negligence and lack of bonafides on their part. If ex-parte final orders are set aside on flimsy grounds like these, there would be no finality to the applications filed before this Tribunal, which would adversely affect the avowed object of the Act. Thus, IA 1908/2022 is devoid of any merit and thus is liable to be dismissed.

13. The petitioners/defendants 1 to 3/certificate debtors 1 to 3 in UMA have submitted that the respondent/applicant bank suppressed the material facts before the Tribunal and thus obtained an-exparte order. It is further submitted therein that they have Typed by: Karp good merits in the case but was deprived of prosecuting the case in accordance with law. It is also submitted that they are ready and willing to settle the matter under dispute amicably in full and final satisfaction of the respondent/applicant bank. But they have no reason as to why they did not file a written statement in the case if they had merits of the case. Notwithstanding the above legal position, this Tribunal is inclined to condone the delay of 40 days in filing UMA Dy No.1594/2022 and to afford an opportunity to the petitioners/defendants 1 to 3/certificate debtors 1 to 3 to prove their case and bonafides, but not lightly. In the above facts and circumstances of the case, it may not be inappropriate if the Tribunal directs them to deposit a sum of ₹40 lakhs (Rupees forty lakhs only) on or before 20.09.2025 by way of DD/RTGS/online transmission before the respondent/applicant bank. If the petitioners/defendants 1 to 3/certificate debtors 1 to 3 deposit the aforesaid amount on or before 20.09.2025, the respondent/applicant bank shall keep such amount in a fixed deposit in the name of the Recovery Officer with auto renewal for six months. The respondent/applicant bank shall not disburse, close or transact with the same until further orders from this Tribunal.

14. In the result, IA 1908/2022 is allowed, subject to the strict compliance of the aforesaid condition, failing which the IA shall stand dismissed for non-compliance. For reporting compliance by either side, adjourned to 22.09.2025. No costs.

*[Dictated to my P.A. transcribed by him, corrected and pronounced by me in the open Tribunal on this the 29^th day of August, 2025]*

[ IMTIAZ ALI ]

Typed by Ragu

IN THE DEBTS RECOVERY TRIBUNAL - 1, KARNATAKA AT BANGALORE

PRESENT: SRI IMTIAZ ALI PRESIDING OFFICER

Dated the 29^th day of August, 2025

**INTERLOCUTORY APPLICATION NO.1908 OF 2022**

**IN UNREGISTERED MISCELLANEOUS APPLICATION Dy No.1594/2022 IN ORIGINAL APPLICATION NO.1309 OF 2020**

Between

Mavaji Muddappa, S/o late Aithappa Gowda, Mavaji House, Medekolu P.O, Sullia, Dakshina Kannada, Karnataka – 574256

and two others. ....Petitioners/defendants 1 to 3/ certificate debtors 1 to 3

And

Canara Bank, (erstwhile Syndicate Bank), Sri Ganesh Commercial Complex, Opp Private Bus Stand, Main Road, Sullia, Karnataka – 574239, represented by its Branch Manager and another.

.... Respondent/applicant/ certificate holder

**ORDER**

29.8.25