M S MAMATHA DEVELOPERS vs CANARA BANK on 29 August 2025

ORDER

IA 365/2020 has been filed on 04.02.2020 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 307 days in filing the aforesaid Unregistered Miscellaneous Application (UMA) Dy No.291/2020. The petitioners are none other than defendants 4 to 6/certificate debtors 4 to 6 in OA 294/2018.

2. The case set out by the petitioners/defendants 4 to 6/certificate debtors 4 to 6 in IA No.365/2020 through the notary attested affidavit of the 2^nd petitioner/5^th defendant/5^th certificate debtor, accompanying the IA in brief is as follows:- The petitioners were not aware of the final order dated 30.03.2019 passed in OA 294/2018 and the said fact came to their knowledge only when they received a demand notice on 03.01.2020 in RC 423/2018. They applied for the certified copy on 17.01.2020 and they received the same on 21.01.2020.

3. The respondent/applicant bank/certificate holder filed statement of objection on 03.02.2025 contending as follows:- The summons were duly served upon the petitioners/defendants 4 to 6/certificate debtors 4 to 6. They have not shown any sufficient reason for the delay in filing the application. There are no merits in the petition.

4. The only point arises for consideration is as to whether the petitioners/defendants 4 to 6/certificate debtors 4 to 6 are entitled to the relief prayed for?

5. At the outset, this Tribunal expresses its displeasure over the conduct on either side in prosecuting and defending the case. UMA Dy No.291/2020 was filed on 04.02.2020 along with IA 365/2020 for condonation of delay. The respondent/applicant bank/certificate holder entered appearance through counsel in the proceedings by filing Typed by Riga vakalath on 22.06.2022 as the summons was served on it much belatedly. However, Ld counsel for the respondent/applicant bank/certificate holder obtained adjournments from 22.06.2022 for filing a statement of objection to IA 365/2020 and eventually the same was filed only on 03.02.2025. Thus, both sides could aid in protracting and prolonging an interlocutory proceeding for the last more than five years.

6. The Point:- The respondent/applicant bank/certificate holder filed OA 294/2018 on 08.03.2018 under S.19(1) of the Act for recovery of the sum of ₹27,13,646/- due under the housing loan account with interest thereon @11.15% per annum with monthly rests from the defendants jointly and severally and by sale of the schedule immovable property.

7. The said OA was allowed as prayed for with interest and costs as per the final order dated 30.03.2019. Pursuant thereto, a recovery certificate bearing No.423/2019 was issued on 31.05.2019 to the Recovery Officer for recovery of the certificate debt.

8. The petitioners/defendants 4 to 6/certificate debtors 4 to 6 on 04.02.2020 filed UMA Dy No.291/2020 to set aside the aforesaid final order as against them and they have come up with this petition to condone the delay of 307 days in filing the same. According to the petitioners/defendants 4 to 6/certificate debtors 4 to 6, they were not aware of the final order dated 30.03.2019 passed in OA 294/2018 and the said fact came to their knowledge only when they received a demand notice on 03.01.2020 in RC 423/2018 and they applied for the certified copy on 17.01.2020 which was received only on 21.01.2020. Per contra, according to the respondent/applicant bank/certificate holder, the summons was duly served upon the petitioners/defendants 4 to 6/certificate debtors 4 to 6 and they have not shown any sufficient reason for the delay in filing the application and there are no merits in the petition.

Typed by Krip

9. A perusal of the OA records shows that summons in this case was sent to the petitioners/defendants 4 to 6/certificate debtors 4 to 6 by registered post on 07.04.2018 and repeated on 16.08.2018. Petitioners 1 and 2/defendants 4 and 5/certificate debtors 4 and 5 were duly served with such summons on 10.04.2018 and 24.08.2018. The summons sent to the 3^rd applicant/6^th defendant/6^th certificate debtor by registered post on 07.04.2018 was not returned and similar summons sent to her by registered post on 16.08.2018 was returned un-served with the postal endorsement 'unclaimed'. However, she was served with summons by substituted service by way of publication in the New Indian Express, Vijaya Karnataka, Free Press Journal and Navasakthi dailies dated 22.01.2019. In view of the provisions of S.114 Illustration (f) of the Evidence Act, 1872 [S.119 (vii) as to Illustration (f) of the Bharatiya Sakshya Adhiniyam, 2023] and S.27 of the General Clauses Act, 1897, there is a presumption that the addressee has received the letter sent by registered post. The Hon'ble Supreme Court in P.T Thomas v Thomas Job [reported in 2005 (6) SCC 478 : (2005) 3 KLT 1042] has held that notice correctly addressed and despite intimation by post office, not accepted and returned un-served, it is presumed that the notice has been served. Except contending that they have not received the summons in this case, they have not rebutted the aforesaid presumption on a consideration of evidence of impeccable character. All the more, the 3^rd applicant/6^th defendant/6^th certificate debtor is a partner of the 1^st applicant/4^th defendant/4^th certificate debtor, which was duly served with summons by registered post. Therefore, the 3^rd applicant/6^th defendant/6^th certificate debtor also is deemed to be served by the summons sent to her by registered post on 07.04.2018. But they never appeared nor were they represented in the proceedings and thus they were declared ex-parte in the proceedings on 29.03.2019. Resultantly, the impugned final order was passed against them on 30.03.2019.

Typed by: Kuj

10. 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 decree or heard ex-parte.</i></td> <td>Thirty days</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>

11. 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 4 to 6/certificate debtors 4 to 6 were duly served with summons in the OA as shown above. The ex-parte final order was passed against them only on 30.03.2019. Therefore, UMA Dy No.291/2020 ought to have been filed on or before 29.04.2019. But they filed the above application beyond such period i.e., only on 04.02.2020. Thus, there is a delay of 281 days in filing such application.

12. 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 4 to 6/certificate debtors 4 to 6 were duly served with summons in the OA by registered post as shown above. In the above circumstances, their contention to the tune that they were not aware of the final order dated 30.03.2019 passed in OA 294/2018 and the said fact came to their knowledge only when they received a demand notice on 03.01.2020 in RC 423/2018 is only an outright lie, which belies their contention. Though they contended that they applied for the certified copy on 17.01.2020

Typed by: Kunal which was received only on 21.01.2020, no such certified copy is produced before this Tribunal. Thus, the reasons shown by the petitioners/defendants 4 to 6/certificate debtors 4 to 6 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 4 to 6/certificate debtors 4 to 6 to the effect that they were not aware of the OA proceedings and could be aware of such proceedings only on 03.01.2020 when they received demand notice in RC 423/2018 (in fact the recovery certificate is bearing No.423/2019) 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 and they awoke from their slumber when they knew that their property is going to be sold in execution 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.

13. This Tribunal is required to weigh the explanations offered by the petitioners/defendants 4 to 6/certificate debtors 4 to 6 and the acceptability of the same. The delay in this case reflects the inactivity and the inaction on the part of the petitioners/defendants 4 to 6/certificate debtors 4 to 6. 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 4 to 6/certificate debtors 4 to 6 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 365/2020 is devoid of any merit and thus is liable to be dismissed.

Typed by: Raa

14. The petitioners/defendants 4 to 6/certificate debtors 4 to 6 in UMA have submitted that the respondent/applicant bank/certificate holder has suppressed material facts before this Tribunal and they are not liable for the amounts claimed as due under the OA as they had already complied with the terms and conditions in the tripartite agreement. But they have no reason as to why they did not file a written statement in the case despite receiving summons, if they had merits of the case. Notwithstanding the above legal position, this Tribunal is inclined to condone the delay of 281 days in filing UMA Dy No.291/2020 and to afford an opportunity to the petitioners/defendants 4 to 6/certificate debtors 4 to 6 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 ₹12 lakhs (Rupees twelve lakhs only) on or before 15.09.2025 by way of DD/RTGS/online transmission before the respondent/applicant bank/certificate holder. If the petitioners/defendants 4 to 6/certificate debtors 4 to 6 deposit the aforesaid amount on or before 15.09.2025, the respondent/applicant bank/certificate holder 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/certificate holder shall not disburse, close or transact with the same until further orders from this Tribunal.

15. In the result, IA 365/2020 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 18.09.2025. 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 ]

Tynsho Kapa

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.365 OF 2020**

**IN UNREGISTERED MISCELLANEOUS APPLICATION Dy No.291/2020 IN ORIGINAL APPLICATION NO.294 OF 2018**

Between

M/s Mamatha Developers, Rathna Nilaya, Veeranagar Padil, Kannur P.O, Mangalore, Karnataka – 575007

and two others. ....Petitioners/ defendants 4 to 6/certificate debtors 4 to 6

And

The Branch Manager, Canara Bank, Subhagriha Saniti Building, Panchamahal, Mulki, Mangalore, Dakshina Kannada, Karnataka – 574154

..... Respondent/applicant bank/ certificate holder

**ORDER**

29.8.25