VIJAYA BANK vs M/S SILICONSPHERE SOLUTIONS on 31 July 2024

ORDER

IA 159/2023 was filed on 19.01.2023 under S.5 of the Limitation Act, 1963 praying to condone the delay of 67 days in filing MA 6/2023. The petitioner is none other than the applicant bank in OA 1149/2018.

2. The case set out by the petitioner/applicant through the notary attested affidavit of its Senior Branch Manager accompanying the IA in brief is as follows:- The petitioner/applicant bank on 20.04.2018 filed OA 1149/2018 under S.19(1) of the Recovery of Debts and Bankruptcy Act, 1993 (as amended from time to time) – for short 'the Act' - for recovery of the sum of ₹12,28,207/- due under cash credit (hypothecation) loan account No.181006211000019 with interest thereon @12.25% per annum plus penal interest @2% per annum from the defendants. However, the same was dismissed for default as per order dated 14.10.2022. In response to the enquiry made by the petitioner/applicant bank with its counsel, he had been apprising the bank that he was following up the matter. But after some time, he stated that during the transit he had misplaced the office file while shifting the office and lost the track of the case file. This caused the delay in filing the MA.

3. The respondents/defendants were duly served with notice. But they never appeared nor were they represented and thus they remained absent.

Typed by Raj

4. The only point arises for consideration is as to whether the relief prayed for by the petitioner/applicant can be granted?

5. The Point:- The petitioner/applicant bank on 20.04.2018 filed OA 1149/2018 under S.19(1) of the Act for recovery of the sum of ₹12,28,207/- due under cash credit (hypothecation) loan account No.181006211000019 with interest thereon @12.25% per annum plus penal interest @2% per annum from the defendants. However, the same was dismissed for default as per order dated 14.10.2022 for not taking any steps for issue of summons as against the defendants.

6. 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 application filed under S.19(1) of the Act. Needless to say, the instant application is governed by Art.122 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>122</td> <td>To restore a suit or appeal or application for review or revision dismissed for default of appearance or for want of prosecution or for failure to pay costs of service of process or to furnish security for costs.</td> <td>Thirty days</td> <td>The date of dismissal</td> </tr> </tbody> </table>

7. A mere glance at (*Tagore Law Lectures*) U N Mitra's *Law of Limitation and Prescription (14^th Edition)* Vol.2 (by Lexis Nexis) says that restoration to file is the relief to which an application governed by Art.122 is projected. This article provides a period of limitation of thirty days for an application to restore a suit which has been dismissed. The dismissal should have been for any of four reasons, namely, (i) for default of appearance; (ii) for want of prosecution; (iii) for failure to pay costs of service of process or (iv) for failure to furnish security for costs. The terminus a quo for the application is the date of dismissal of the suit. Limitation of thirty days under Art.122 of the Limitation Act, 1963 applies to application for restoration of suit dismissed for non- Typed by Ragu prosecution and limitation begins to run from the date of dismissal and not from the date of knowledge of dismissal. O.9 R.2 of the Civil Procedure Code, 1908 provides: "Where on the day so fixed it is found that the summons has not been served upon the defendant in consequence of the failure of the plaintiff to pay the court-fee or postal charges (if any) chargeable for such service, the Court may make an order that the suit be dismissed. Provided that no such order shall be made although the summons has not been served upon the defendant, if on the day fixed for him it appear and answer he attends in person or by agent when he is allowed to appear by agent." Where a suit has been dismissed for default of the plaintiff in paying the process fee an application for restoration of the suit may be made under R.4 and this article will apply to such an application.

8. In the instant case, OA 1149/2018 was dismissed for default of the petitioner/applicant for not taking any steps for issuing summons to the respondents/defendants as per the order dated 14.10.2022. Therefore, taking cue from Art.122 of the Limitation Act, 1963, the period of limitation commences from the date of dismissal and as such MA 6/2023 praying for setting aside such order and restoration of OA 1149/2022 ought to have been filed on or before 14.11.2022 but the same was happened to be presented before this Tribunal only on 19.01.23023 with a delay of 66 days.

9. According to the petitioner/applicant bank, in response to the enquiry made by it with its counsel, he had been apprising the bank that he was following up the matter and after some time, he stated that during the transit he had misplaced the office file while shifting the office and lost the track of the case file and this caused the delay in filing the MA. Though such averment has been made by the Senior Branch Manager of the petitioner/applicant bank, no affidavit from the concerned counsel relating to such event has been furnished before this Tribunal. In the given facts of the case, the petitioner/applicant bank acted promptly and diligently but the advocate engaged by it was responsible for the delay. Then, it may not be procedurally correct to decide the Typed by Karp matter on the averments in the affidavit of the petitioner/applicant bank alone, who may not be in a right position to show sufficient cause for the lethargy shown by the advocate in handling its case. In the above circumstances, it is desirable and apposite to adjudicate the matter in terms of the procedural law to have an affidavit sworn by the person who is actually responsible for the delay. A single affidavit in evidence of the facts of more than one deponent cannot be a good legal practice as one person cannot swear for the acts done by another person.

10. This Tribunal is of the view that such kind of lethargy, whether on the part of the petitioner/applicant or the counsel with advanced technology now-a-days is no more acceptable. Shifting of office from one premises to another premises or removal of case records to another premises by itself is a matter relating to the advocate concerned alone and any lapse or mishap occurred during such process is not a lawful ground for condoning the delay occurred in this case. The aforesaid explanation shows only the casual manner in which the petitioner/applicant bank approached this Tribunal without any plausible explanation for the delay caused, which amounts only to the act of lethargy and incapability in handling the court matters. Except such vague reason no lawful reason has been furnished by the petitioner/applicant. The petitioner/applicant has taken a contention that it is dealing with public money and hence the inaction on the part of the advocate shall not prejudice the bank. The inaction alleged on the part of the advocate shows only the lack of follow up by the bank officials in the matter. The petitioner/applicant bank cannot find a refuge under the reason that it is dealing with public money and, therefore, the Tribunal is under obligation to condone the delay. The attitude of the petitioner/applicant bank that it is a public authority dealing with public money and, therefore, it can approach the Tribunal as and when it desires ignoring the period of limitation prescribed by the statute, as if the period of limitation does not apply to it, is not appreciable.

Typed by Rag

11. Notwithstanding the above observation, this Tribunal is of the view that the delay occurred may be condoned and MA 6/2023 shall be accepted into records having regard to the debt involved in this matter, which is having a direct influence in the economy of the country, but not lightly. Looking to the period of delay and the casual manner in which the application has been worded, it shall not be inappropriate if the Tribunal imposes a penalty of ₹1,000/- (Rupees one thousand only) on the petitioner/applicant 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 two weeks from today, failing which the IA shall stand dismissed.

12. In the result, IA is disposed of as above. For reporting compliance by the petitioner/applicant bank, adjourned to 01.08.2024. No costs.

*[Dictated to my PA, transcribed by him, corrected and pronounced by me in the open Tribunal on this the 31^st day of July, 2024]*

[ IMTIAZ ALI ] PRESIDING OFFICER

Typed by Araj

IN THE DEBTS RECOVERY TRIBUNAL - 1, KARNATAKA AT BANGALORE

PRESIDING OFFICER

Dated the 31^st day of July, 2024

**INTERLOCUTORY APPLICATION NO. 159 OF 2023** **IN** **MISCELLANEOUS APPLICATION NO.6 OF 2023** **IN** **ORIGINAL APPLICATION NO.1149 OF 2018**

Between

by its Senior Branch Manager. ....Petitioner/applicant

And

M/s Siliconsphere Solutions, G-5, Ramanashree Complex, 654/13, Sri Ramachandra Road, its Partners, defendants 1 and 2 and three others. .... Respondents/defendants

**ORDER**

31.7.24

IN THE DEBTS RECOVERY TRIBUNAL - 1, KARNATAKA AT BENGALURU

PRESENT: SRI IMTIAZ ALI PRESIDING OFFICER

Dated the 31^st day of July, 2024

MISCELLANEOUS APPLICATION No.6 OF 2023 IN ORIGINAL APPLICATION NO.1149 OF 2018

Between by its Senior Branch Manager.

.....Petitioner/applicant

And

1. 1. M/s Siliconsphere Solutions, G-5, Ramanashree Complex, 654/13, Sri Ramachandra Road,

its Partners, defendants 1 and 2.

2. 2. H V Santosh, G-5, Ramanashree Complex, 654/13, Sri Ramachandra Road, 3^rd Block, Rajajinagar, Bangalore, Karnataka – 560010.

3. 3. M Shwetha, G-5, Ramanashree Complex, 654/13, Sri Ramachandra Road, 3^rd Block, Rajajinagar, Bangalore, Karnataka – 560010.

4. 4. Ganaiah Rajappa, S/o Boroiah Gangaiha, 5, RK Mutt Layout, K G Nagar, Bangalore, Karnataka – 560009.

... Respondents/Defendants

Typed by: Raj

This Miscellaneous Application having been heard on 15.03.2024 in the presence of Advocate Shri Ganesh Shet H for the petitioner/applicant, and the respondents/defendants being absent, and stood over to this day for consideration, the Tribunal delivered the following:-

ORDER

Miscellaneous Application No.6/2023 was filed on 19.01.2023 under S.22(2)(f) of the Recovery of Debts and Bankruptcy Act, 1993 (as amended from time to time) – for short 'the Act' - praying to set aside the final order dated 14.10.2022 passed by this Tribunal in OA 1149/2018. The petitioner is none other than the applicant in the OA.

2. The case set out by the petitioner/applicant bank in the memorandum accompanying MA No.6/2023 in brief is as follows:- The petitioner/applicant bank on 20.04.2018 filed OA 1149/2018 under S.19(1) of the Act for recovery of the sum of ₹12,28,207/- due under cash credit (hypothecation) loan account No.181006211000019 with interest thereon @12.25% per annum plus penal interest @2% per annum from the defendants. Summons in this case was ordered on 31.08.2018. Though the counsel engaged by this petitioner had taken steps on 19.03.2020, he failed to produce a memo of proof for the same before this Tribunal. In the meantime, due to covid-19 and the national lockout, the case was adjourned from time to time. By oversight the counsel had collected a wrong date and the office of the counsel was shifted. The counsel was not able to produce the memo of the postal receipt on 23.04.2020 before the Tribunal. However, the OA was dismissed for default as per order dated 14.10.2022. On the above contentions, the petitioner/applicant prayed for setting aside the final order dated 14.10.2022 and to restore the OA to the file for adjudication.

3. The only point arises for consideration is as to whether the relief prayed for by the petitioner/applicant can be granted?

Typed by Kgp

4. The Point:- The petitioner/applicant bank on 20.04.2018 filed OA 1149/2018 under S.19(1) of the Act for recovery of the sum of ₹12,28,207/- due under cash credit (hypothecation) loan account No.181006211000019 with interest thereon @12.25% per annum plus penal interest @2% per annum from the defendants. However, the same was dismissed for default as per order dated 14.10.2022 for not taking any steps for issue of summons as against the defendants.

5. The order dated 14.10.2022 passed by this Tribunal in OA 1149/2018 reads as below:- *"None represented the matter. It is noticed from the records that the applicant bank has not taken any steps, not turned up for hearing, since long and absent during the last hearing date and even today also. Hence, it is construed that the applicant bank is not interested to prosecute the case further. Accordingly, the OA is dismissed in default."*

6. A perusal of the order dated 14.10.2022 shows that OA 1149/2018 was dismissed for default of the petitioner/applicant bank for not taking any steps within a reasonable time for issuing summons as against the defendants only. Sub-rule (3) of R.4 of the Debts Recovery Tribunal (Procedure) Rules, 1993 (as amended from time to time) – for short 'the Rules' - says that an application under S.19(1) of the Act shall be presented in two sets in a paper book along with an empty file size envelope bearing full address of the defendants and where the number of defendant is more than one, then sufficient number of extra paper books together with empty file six envelopes bearing full address of each of the respondents shall be furnished by the applicant. R.11 of the Rules says that a copy of the application and paper book shall be served on each of the respondents as soon as they are filed, by registered post. Sub-section (4) of S.19 of the Act says that on receipt of the application under sub-section (1) or sub-section (2), the Tribunal shall issue summons to the defendant. R.2 of O.9 of the Code of Civil Procedure, 1908 deals with dismissal of suit where summons not served in consequence of plaintiff's failure to pay costs, and it reads thus:- *"Where on the day so fixed it is found that the summons has not been served upon the defendant in consequence of the failure of the plaintiff to pay the court fee or postal charges, if any, chargeable for such*

Typed by Kap service, or failure to present copies of the plaint as required by rule 9 of O.7, the Court may make an order that the suit be dismissed.

*Provided that no such order shall be made, if notwithstanding such failure, the defendant attends in person or by agent when he is allowed to appear by agent on the day fixed for him to appear and answer."*

7. R.4 of O.9 of the Code of Civil Procedure, 1908 says that where a suit is dismissed under R.2 or R.3, the plaintiff may (subject to the law of limitation) bring a fresh suit; or he may apply for an order to set the dismissal aside, and if he satisfies the court that there was sufficient cause for such failure as is referred to in R.2, or for his non-appearance, as the case may be, the Court shall make an order setting aside the dismissal and shall appoint a day of proceeding with the suit.

8. A perusal of the order sheet in OA 1149/2018 shows that on receipt of the application, the Registry scrutinised the same and found to be defective for want of not recording the number of corrections in the pleadings as per the scrutiny hand's remarks dated 20.04.2018. The Registrar as per his order dated 23.04.2018 granted time up to 01.06.2018 for curing the defects, which got extended from time to time till 31.08.2018. In the meantime, the petitioner/applicant cured the defect as per the scrutiny hand's report dated 06.08.2018 and thereupon the Registrar ordered to register the OA as per his order dated 08.08.2018. Summons was ordered to issue as against the respondents/defendants as per the order dated 31.08.2018. Going by the proceedings sheet no steps were taken for issue of summons as against the respondents/defendants till 23.04.2020. In the meantime lockdown was declared in the country and the case got adjourned to 27.07.2020. Again, the petitioner/applicant was called upon to take steps for issue of summons as against the respondents/defendants by registered post. It is recorded in the proceedings dated 01.09.2022 of the Registrar that no steps were taken for issue of summons as against the respondents/defendant since 31.08.2018. In the above circumstances, the case was placed before the Tribunal for passing of necessary orders on 14.10.2022. When the case was taken up before the Tribunal on 14.10.2022, the petitioner/applicant bank was neither Typed by Karp present nor was it represented in the proceedings and thus the impugned order was passed on that day.

9. According to the petitioner/applicant, though the counsel engaged by it had taken steps on 19.03.2020, he failed to produce a memo of proof for the same before this Tribunal and in the meantime, due to covid-19 and the national lockout, the case was adjourned from time to time. It is also its case that by oversight the counsel had collected a wrong date and the office of the counsel was shifted. The petitioner/applicant bank along with the MA has produced a memo purportedly dated 23.04.2020 and the original postal receipts dated 19.03.2020 for having sent the summons to the respondents/defendants. Except the vague explanation as to the counsel could not produce the same before the Tribunal in time, the petitioner/applicant bank has no explanation as to why the summons could not be taken in time as against the respondents/defendants in spite of the order dated 31.08.2018 for the same till 14.10.2022, whereas R.5 of O.9 of the Code of Civil Procedure, 1908 prescribes the period of seven days to apply for fresh summons after the summons are returned un-served. Normally, a summons is required to be issued and sent by registered post within seven days from the date of the order, unless there is a valid reason for the same. No explanation is acceptable for not taking any steps for issue of summons as against the respondents/defendants for a period of more than four years from the date of the order. It proves without any doubt the lackadaisical and indolent attitude of the petitioner/applicant bank 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 institution. The petitioner/applicant bank has acted unmindful of all these aspects and against the avowed object of the Act. Though such averment has been made by the Senior Branch Manager of the petitioner/applicant bank putting all the blame on the counsel engaged by it, no affidavit from the concerned counsel relating to such lapse has been furnished before this Tribunal. In the given facts of the case, the petitioner/applicant bank acted promptly and diligently but the advocate engaged by it was responsible for the lapses occurred. No sufficient, valid and lawful reason has been shown in the application by the petitioner/applicant for the lapses occurred in not taking any step for issuing summons as against the respondents/defendants despite the lapse of more than four years. The story prepared by the petitioner/applicant cannot be believed even for a moment without a valid affidavit from the concerned counsel. The application also has been drafted in a very careless manner. It is not possible to understand as to what is specifically sought for in the relief prayed for. It is none of the business and duty of the Tribunal to decipher the characteristic griffonage used by the petitioner/applicant in the pleadings. It is not possible to understand as to what exactly sought for by the petitioner/applicant in the relief portion, which reads as below:-

*"For the reasons sworn to in the accompanying affidavit, the applicant in the above case respectfully prays that this Hon'ble Court may be pleased to re-call the order dated 14.10.2022 declining for dismiss for default in OA No.1149/2018 in the interest of justice and equity."*

10. Notwithstanding the above observation, this Tribunal is of the view that MA 6/2023 shall be allowed and the final order dated 14.10.2022 shall be set aside and OA 1149/2018 shall be restored to file, having regard to the debt involved in this matter, which is having a direct influence in the economy of the country, but not lightly. Looking to the period of lapses occurred and the casual manner in which the application has been worded, it shall not be inappropriate if the Tribunal imposes a penalty of ₹2,000/- (Rupees two thousand only) on the petitioner/applicant 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 two weeks from today, failing which the MA shall stand dismissed.

Typed by KAP

7

11. In the result, MA is conditionally disposed of as above. For reporting compliance by the petitioner/applicant bank, adjourned to 01.08.2024. No costs.

*[Dictated to my PA, transcribed by him, corrected and pronounced by me in the open Tribunal on this the 31^st day of July, 2024]*

[ IMTIAZ ALI ] PRESIDING OFFICER

Typed by Kapi

IN THE DEBTS RECOVERY TRIBUNAL - 1, KARNATAKA AT BANGALORE

PRESENT: SRI IMTIAZ ALI PRESIDING OFFICER

**MISCELLANEOUS APPLICATION No.6 OF 2023 IN ORIGINAL APPLICATION NO.1149 OF 2018**

Between by its Senior Branch Manager. ....Petitioner/applicant

And

M/s Siliconsphere Solutions, G-5, Ramanashree Complex, 654/13, Sri Ramachandra Road, its Partners, defendants 1 and 2 and three others. .... Respondents/Defendants

**ORDER**

31.7.24