MS NCDEXE MARKETS LTD vs CANARA BANK on 31 December 2025

ORDER

The appellant filed the above appeal on 25.10.2022 under sub-rule (5) of R.5 of the Debts Recovery Tribunal (Procedure) Rules, 1993 (as amended from time to time) – for short 'the Rules' praying to set aside the order dated 30.09.2022 passed by the Registrar in UMA Dy No.707/2020. The appellant is none other than the 2^nd defendant in OA 483/2019 filed by the 1^st respondent/applicant bank before this Tribunal.

2. The case set out by the appellant/2^nd defendant in the memorandum of appeal in brief is as follows:- The 1^st respondent/applicant bank filed OA 483/2019 as against the defendants before this Tribunal. The said OA was disposed of as per the final order dated 19.10.2019. Aggrieved, the appellant/2^nd defendant filed UMA Dy No.707/2019 before this Tribunal praying to set aside the final order dated 19.10.2019. On scrutiny of the same, the office of this Tribunal raised some defects. The counsel representing the appellant/2^nd defendant could not appear before the Registrar on 30.09.2022 to comply with the objections as he was held up before the Hon'ble High Court of Karnataka in a part heard matter and due to his non-appearance the Registrar declined to register the same as per the order dated 30.09.2022.

3. The 1^st respondent/applicant bank filed a statement of objection on 24.06.2025 and resisted the prayer.

4. The only point arises for consideration is as to whether the relief prayed for by the appellant/2^nd defendant can be granted?

5. The Point:- The 1^st respondent/applicant bank on 01.04.2019 filed OA 483/2019 before this Tribunal for recovery of the sum of ₹53,98,519/- from the defendants. The OA was allowed as per the final order dated 19.10.2019. Pursuant thereto a recovery certificate bearing No.1272/2019 was issued on 02.01.2020 for recovery of the certificate debt. Aggrieved, the appellant/2^nd defendant on 17.03.2020 filed UMA Dy No.707/2020 before this Tribunal praying to set aside the aforesaid final order dated 19.10.2019 passed by this Tribunal in OA 483/2019.

Typed in Kaja

6. On scrutiny, the Registry of this Tribunal noted a few defects as per the scrutiny hand's remarks dated 17.03.2020. The Registrar vide order dated 17.03.2020 granted time up to 03.04.2020 for curing the defects noted by the Registry. However, the appellant/2^nd defendant did not cure the defects in spite of time granted up to 30.09.2022 vide adjournment on twelve occasions. In the above circumstances, the Registrar vide order dated 30.09.2022 declined to register the application. The order dated 30.09.2022 of the Registrar reads as below:- *"Case called out twice today. None appears. This application was filed by the applicant, which is numbered in Dy No.707/2020. Office has raised some objections. Counsel for the applicant not complied with office objections in spite of sufficient opportunities till today. It shows that the applicant or the counsel for the applicant is not interested in prosecuting the case. Therefore, the office has no option other than to decline to register the case. Acting under R.5(4) of the Rules, I hereby decline to register this case. Accordingly, Dy No.707/2020 is closed."*

7. R.5 of the Rules deals with presentation and scrutiny of applications, and it reads so:- *"(1) The Registrar, or, as the case may be, the officer authorised by him, shall endorse on every application the date on which it is presented or deemed to have been presented under R.4 and shall sign endorsement.*

*(2) If on scrutiny, the application is found to be in order, it shall be duly registered and given a serial number.*

*(2A) After registration of the application under sub-rule (2), the Tribunal shall issue summons to the defendants in Form IV.*

*(3) If the application, on scrutiny, is found to be defective and the defect noticed is formal in nature, the Registrar may allow the party to rectify the same in his presence and if the said defect is not formal in nature, the Registrar, may allow the applicant such time to rectify the defect as he may deem fit.*

*(4) If the concerned applicant fails to rectify the defect within the time allowed in sub-rule (3), the Registrar may by order and for reasons to be recorded in writing, decline to register the application.*

*(5) An appeal against the order of the Registrar under sub-rule (4) shall be made within 15 days of the making of such order to the Presiding Officer concerned in chamber whose decision thereon shall be final."*

8. Sub-rule (5) of R.5 of the Rules says that an appeal against the order of the Registrar under sub-rule (4) shall be made within fifteen days of the making of such order as per which Appeal 10/2022 ought to have been filed on or before 15.10.2022 but the same was happened to be filed only on 25.10.2022 with a delay of ten days.

9. A perusal of the proceedings sheet further shows that in spite of strict instructions by the Registry, the appellant/2^nd defendant did not cure the defects to the satisfaction of the Registry but remained absent despite the case was included in the Tripoli Reg

cause list of the Registrar. Sub-rules (3) and (4) of R.5 of the Rules says that if an application filed before the Tribunal is found to be defective for registration, the Registrar may allow the applicant such time to rectify the defect as he may deem fit and if the concerned applicant fails to rectify the defect within the time allowed in sub-rule (3), the Registrar may by order and for reasons to be recorded in writing, decline to register the application, for which a remedy lies under sub-rule (5) of R.5 of the Rules to such applicant. The words '*such time to rectify the defect as he may deem fit*' only refers to a reasonable time to rectify the defects noted. What is reasonable is to be determined by the circumstances and the nature of the defect to be cured. To put it differently, reasonable time as may be deemed fit by the Registrar means such amount of time which may fairly, necessarily and conveniently required by the applicant to cure the defects noted by the Registry, which is neither too short nor too long. In the instant case, more than 2½ years' (from 17.03.2020 to 30.09.2022) time was granted by the Registry for curing the defects, which were formal in nature. The Debts Recovery Tribunals common regulations 2015 made by the Central Government governing the scrutiny of applications by the Registry says that if on scrutiny, an application is found to be defective for registration, the applicant shall be asked to cure the defects within fifteen days, which may be extended for a further period not exceeding one month. It further says that on failure to cure the defects within such period as granted, the Registrar may, for reasons to be recorded in writing decline to register the application. Though such time frame is not mandatory and directory only, the scheme of the Act and the Rules made thereunder would make it ample clear that the Registry shall grant only a reasonable time (as may be deemed fit by it) to the applicant for curing the defects noted by it, failing which it shall exercise its power and jurisdiction conferred upon it under Rr.5 r/w R.23 of the Rules. Granting of time much beyond such reasonable time (even bearing in mind the covid-19 pandemic situation) for curing defects to the applicant would make the avowed object of the Act redundant and otiose. Despite the lapse of more than 2½ years' time granted, the Handwritten mark: A blue checkmark with a small 'P.' next to it, located on the left margin of the page.

Tayyab Khan

appellant/2^nd defendant could not cure the defects noted by the Registry and, therefore, the Registrar vide order dated 30.09.2022 declined to register the same. It may be noted that the scheme of the Act and the Rules made thereunder do not provide for granting such a long time for curing the defects.

10. According to the appellant/2^nd defendant, going by the memorandum of appeal, the counsel representing it could not appear before the Registrar to comply with the objections as he was held up before the Hon'ble High Court of Karnataka in a part heard matter and due to his non-appearance the Registrar declined to register the same as per the order dated 30.09.2022. It may be noted that a long span of 2½ years' time (from 17.03.2020 to 30.09.2022) was given to the appellant/2^nd defendant for curing the defects. But it has not given any sufficient reason as to why it could not cure the defects in spite of granting such a long time, except stating that its counsel could not appear before the Registrar on 30.09.2022. It has not given any valid and sufficient reason for the delay of ten days in filing appeal No.10/2022 also. The appellant/2^nd defendant in paragraph 4 under the head 'limitation' of appeal 10/2022 has stated that the same has been filed within the period of limitation. The averments read as follows:-

*"The appellant submit that the 1^st defendant herein had filed an application for recovery of money in OA No.483/2019 on the file of this Hon'ble Tribunal and an ex-parte order came to be passed on 19.10.2019. In terms of he said order, recovery certificate bearing No.DRC No.1272/2019 was drawn and the demand notice was issued on 02.01.2020 which came to be served on the appellant on 27.01.2020. This appellant upon knowledge of the ex-parte order dated 19.10.2019 had filed Dy No.707/2019 seeking to set aside the order and restore OA 483/2019. It is submitted that the Registrar vide orders dated 30.09.2022 in exercise of powers conferred under R.5(4) of the Rules has declined to register the case for want of compliance of office objections. Upon receipt of the certified copy, the appellant has filed the aforesaid petition on the file of this Hon'ble Tribunal."*

11. Once the appellant/2^nd defendant subjected itself to the jurisdiction and authority of this Tribunal, it is for it to follow up its application and to get the defects, if any cured. The Act and the Rules made thereunder do not provide for intimation or notice by the Registrar to the appellant/2^nd defendant for curing the defects.

12. It may be noted that Rr.22 and 23 of the Rules deals with the powers, functions and the duties of the Registrar of a Debts Recovery Tribunal. In addition to the powers conferred upon the Registrar under R.22 of the Rules, he is empowered to decide Tysedh Rupa

all questions arising out of the scrutiny of the applications before they are registered as per sub-rule (ii) of R.23 of the Rules, subject to any general or special order of the Presiding Officer. Further, as per sub-rule (4) of R.5 of the Rules, he was entitled to decline to register an application if the concerned applicant fails to rectify the defect within the time allowed.

13. The appellant/2^nd defendant has not given any valid explanation as to why it could not cure the defects during the period from 17.03.2020 to 30.09.2022. No valid reason also has been shown by it for the delay of ten days occurred in presenting Appeal 10/2022 before this Tribunal. Therefore, the lame excuse shown by the appellant/2^nd defendant for the lapse occurred in not curing the defect for the period from 17.03.2020 to 30.09.2022 is not at all acceptable. No valid and lawful reason has been shown by the appellant/2^nd defendant for the lapse occurred on its part in curing the defect. No explanation is acceptable for not taking any steps for curing the defects noted by the Registry for a period of more than 2½ years. It proves without any doubt the lackadaisical and indolent attitude of the appellant/2^nd defendant in prosecuting its case before this Tribunal, whereas the scheme of the Act envisages expeditious disposal of applications and speedy recovery of debt due to banks and financial institutions. An applicant, whoever may be, cannot be allowed to keep an application defective as per his desire. If an application filed by an applicant is found to be defective by the Registry, then it is the duty of the counsel for the applicant or the applicant, as the case may be, to remove such defects at the earliest. Matters remaining defective despite the lapse of thirty days can be declined by the Registry in terms of the power conferred upon it under sub-section (4) of S.5 of the Rules. Tactics of waiting for rejection of application even after 2½ years and then challenging the same under sub-rule (5) of R.5 of the Rules with lame excuses for delay and lapses occurred cannot be encouraged by this Tribunal. Registry of this Tribunal required to be vigilant. The appellant/2^nd defendant has acted unmindful of all these aspects and against the avowed object of the Act. No sufficient, valid and lawful Tipton Krip

reason has been shown in the application by the appellant/2^nd defendant for the lapses occurred in not taking any step for curing the defects noted by the Registry despite the lapse of more than 2½ years. The story prepared by the appellant/2^nd defendant cannot be believed even for a moment.

14. Notwithstanding the above observation, this Tribunal is of the view that appeal 10/2022 shall be allowed and the order dated 30.09.2022 of the Ld Registrar shall be set aside and the appellant/2^nd defendant may be permitted to cure the defects, but not lightly. There is much difference in the approach of the Tribunal in looking at the delay in originally filing the application and the delay in resubmission of the same after curing the defects. However, looking to the period of lapses occurred in curing the defects and the casual manner in which the application has been prosecuted, it shall not be inappropriate if the Tribunal imposes a penalty of ₹15,000/- (Rupees fifteen thousand only) on the appellant/2^nd defendant for wastage of judicial time of this Tribunal, which has its own value, and the same may be deposited in the account of the Karnataka State Legal Services Authority, 1^st Floor, Nyaya Degula Building, H Siddaiah Road, Bangalore, Karnataka – 560027 within ten days from today, failing which the appeal shall stand dismissed.

15. Of course, the defects noted by the Registry as per the scrutiny hand's remarks dated 17.03.2020 are curable defects and an opportunity should be given to the appellant/2^nd defendant to do the needful even at this much belated stage. The Registry was perfectly justified in passing the impugned order dated 30.09.2022 as conferred upon the power under sub-rule (4) of R.5 of the Rules. In the above facts and circumstances of the case and in view of the discussion as above, this Tribunal is of the view that procedural defects and irregularities which are curable should not be allowed to defeat the substantive rights or to cause injustice and that procedure, a handmaiden to justice, should never be made a tool to deny justice or perpetuate injustice, by any oppressive or punitive use as held by the Hon'ble Supreme Court in Haryana State Cooperative Supply Tiptal In Kapa

*and Marketing Federation Limited v Jayam Textiles [reported in (2014) 4 SCC 704]*. In view of the above, empowered with the power and authority under S.19(25) of the Recovery of Debts and Bankruptcy Act, 1993 (as amended from time to time) r/w R.18 of the Rules, the Tribunal may make such orders and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice.

16. In the result, appeal 10/2022 is allowed and the order dated 30.09.2022 of the Ld Registrar is set aside and the appellant/2^nd defendant is permitted to cure the defects, subject to the deposit of the sum of ₹15,000/- (Rupees fifteen thousand only) by the appellant/2^nd defendant in the account of the Karnataka State Legal Services Authority, 1^st Floor, Nyaya Degula Building, H Siddaiah Road, Bangalore, Karnataka – 560027 within ten days from today, failing which appeal 10/2022 shall stand dismissed. The appellant/2^nd defendant may be permitted to cure the defects noted by the Registry in UMA Dy No.707/2020 on production of proof of receipt for payment of the aforesaid penalty before the Registrar (irrespective of the posting date). If such receipt in original is filed with a memo, the Registrar shall accept the same and permit the appellant/2^nd defendant to cure the defects in UMA Dy No.707/2020 as soon as possible but in any case, not later than seven days from the date of production of the receipt. All pending IAs stand closed. For reporting compliance by the appellant/2^nd defendant, adjourned to 12.01.2026 before the Ld Registrar. The parties shall suffer their respective costs.

*[Dictated to my PA directly on the computer, corrected and pronounced by me in the open Tribunal on this the 31^st day of December, 2025]*

[IMTIAZ ALI] PRESIDING OFFICER

Typed by: Ragu

IN THE DEBTS RECOVERY TRIBUNAL - 1, KARNATAKA AT BANGALORE

PRESENT: SRI IMTIAZ ALI PRESIDING OFFICER

Dated the 31^st day of December, 2025

**APPEAL 10 OF 2022 IN UNREGISTERED MISCELLANEOUS APPLICATION Dy NO.707 OF 2020**

Between

M/s NCDEX E markets Limited (NeML), Ackruti corporate Park, 1^st Floor, LBS Marg, Kanjurmarg (W), Mumbai – 400078, represented by its Assistant Vice-President (Legal), Manjunath. ....Appellant/2^nd defendant

And

Canara Bank, Karatagi, Koppal, Karnataka – 583229, represented by its Senior Manager, PBNV Satish Kumar and two others.

..... Respondents/applicant bank and defendants 1 and 3

**ORDER**

4. 31.12.25