N.S. John Vs S B T

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

DATED THE 26^TH OCTOBER, 2005

PRESENT:  HON’BLE MR. JUSTICE K. GNANAPRAKASAM

CHAIRPERSON

MA-131/2005

(IA-460/2004 in OA-366/2002:  DRT, Ernakulam)

BETWEEN:

N.S. John,

Nediyamannil,

Vallikode-Kottayam,

Pathanamthitta District,

Kerala.

…  Appellant

AND

SBT

Pathanamthitta, Kerala.

Represented by its Chief Manager

…  Respondent

Counsel for Appellant:  Mr. Isac T. Paul for M/s. Peter & Karunakar

Counsel for Respondent:  Mr. Girish Kumar

:  O R D E R  :

1.         This Appeal is directed against the Order dated 4.2.2005 passed by the DRT, Ernakulam, in IA-460/2004 in OA-366/2002.

2.         The Appellants are the defendants in the OA and they have filed an Application in IA-460/2004, to condone the delay of 446 days in filing the Reply Statement and the same came to be dismissed by the DRT by its Order dated 4.2.2005, and the same is under challenge in this Appeal.

3.         I have heard the Learned Advocate for the Appellant and Respondent and also perused the relevant papers placed before this Tribunal. 

4.         The Appellant in the Affidavit filed before the DRT had stated that they were directed to file the Written Statement within two weeks from 20.11.2002 and they did not do so.  The Written Statement was filed on 24.2.2004 and there was a delay of 446 days in filing the Written Statement.  The delay was explained in the Affidavit by stating that the defendants were trying to settle the claim with the Applicant Bank and the defendants were optimistic of settling the claim and unfortunately the defendants could not raise sufficient funds from the expected sources and hence they were constrained to file the Written Statement and only in the said circumstances, there was a delay and the said delay was neither willful nor wanton.

5.         The Respondent Bank herein filed a Counter opposing the said Petition stating that the defendants after receipt of the summons appeared through their Advocate on 7.10.2002 and four weeks time was given to file the Written Statement and the case was posted on 20.11.2002.  Subsequently, the case was posted to 24.4.2003, 18.7.2003, 17.10.2003, for filing the Written Statement of the defendants.  The case was then posted to 1.12.2003 for want of time and it was adjourned to 9.2.2004 for the Proof Affidavit of the Applicant Bank and the Bank also filed the Proof Affidavit on 15.10.2003 and finally the case was posted on 25.2.2004 and only in the meanwhile, the defendants filed the Written Statement. The Bank does not admit the effort said to have taken by the defendants to settle the matter.  The defendants have also not filed any Application for extension of time as provided under Rule-12 of the DRT (Procedure) Rules, 1993, and hence prayed for the dismissal of the Petition.

6.         The Ld. PO of the DRT after taking into consideration all the aspects and after having heard both sides, came to the conclusion that Order-8 Rule-1 of the Code of Civil Procedure (CPC) as amended with effect from 1.7.2002, states that, “The defendant shall, within thirty days from the date of service of summons on him, present a written statement of his defence.”  The proviso thereto says that, “Where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the same on such other day, as may be specified by the Court, for reasons to be recorded in writing, but which shall not be later than ninety days from the date of service of summons.”  The Tribunal was also guided by the decision of the three Judge Bench of the Hon’ble Supreme Court in the case of Dr. J.J. Merchant & others, Appellants Vs. Shrinath Chaturvedi, Respondent – (2002) 6 SCC 635, wherein it was held that, “Under Rule-1 of Order-8 of the Code, there is a legislative mandate that written statement of defence is to be filed within 30 days and if there is failure to file the Written Statement within the stipulated time, the Court can at the most extend further period of 60 days and no more.”  After having observed so, the DRT came to the conclusion that it has no power to extend the period for filing written statement beyond 90 days from the date of service of summons on the defendant.  Reliance was also made to Sub-section (4) of Section-19 of the RDDB&FI Act, 1993, and Sub-section (5) of the said Act was also taken into consideration.  The DRT ultimately placing reliance upon the case of Dr. J.J. Merchant & others, held that time beyond 90 days from the date of service of summons cannot be granted to the defendants to file the Written Statement and dismissed the Petition of the defendants.  Aggrieved by the same, the 2^nddefendant has preferred this Appeal.

7.         The Ld. Advocate for the Appellant would contend that they have been under the bonafide impression that the matter could be settled and they have been approaching the Respondent Bank and as they could not settle the matter, they have filed the Written Statement and only in the said circumstances, there was a delay and the said delay was neither willful nor wanton.  It is further submitted that the post of Presiding Officer was kept vacant somewhere between November, 2002 upto August, 2003.  It is also one of the reasons, which prevented them from filing the Written Statement.  But however, it is prayed that the Appellant have filed the Written Statement alongwith the Application to condone the delay and they may be given an opportunity to defend the case, as they have got a good and valid defence.

8.         On the contrary, the Ld. Advocate for the Respondent Bank would contend that the Appellant was not at all diligent in defending the case.  When the Tribunal granted two weeks time on 20.11.2002, the defendants could have filed the Written Statement or at least within a reasonable time thereafter, but they have not done so.  The defendants have deliberately delayed filing the Written Statement with a view only to protract the proceedings.  It is also further submitted that the reason given by the Appellant that just because the post of Presiding Officer was vacant for some time, they did not file the Written Statement, cannot be a good and valid ground for non-filing of the Written Statement.  Nothing prevented the defendants from filing the Written Statement.

9.         After having heard the Ld. Advocate for the Appellant and Respondent, it is made out that no doubt, Order-8 Rule-1 C.P.C. states that the defendant shall present a Written  Statement of his defence within 30 days from the date of service of summons on him.  This amendment was introduced to the C.P.C. by the amended Act 46 of 1999, which came into force on 1.7.2002.  Though Section-22(1) of the RDDB&FI Act, 1993 states that the Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the C.P.C., 1908 (5 of 1908), but shall be guided by the principles of natural justice, it is well settled, as it has been rightly observed by the DRT also that the Tribunal can act upon the provisions contained in the Code and can even go beyond the Code so long as it passes orders in conformity with the principles of natural justice, as it has been held in the case of Allahabad Bank, Calcutta Vs. Radha Krishna Maity & Others – (1999) 6 SCC 755.  The 30 days period as provided under Order-8 Rule-1 CPC, could be extended upto a period of 90 days as stated in the proviso to Order-8 Rule-1, which states, “Where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the same on such other day, as may be specified by the Court, for reasons to be recorded in writing, but which shall not be later than ninety days from the date of service of summons.”  Following the proviso and also the Judgement rendered by the Hon’ble Supreme Court in Dr. J.J. Merchant’s case, the DRT came to the conclusion that the Appellant filed the Written Statement after a period of 90 days and, therefore, that cannot be entertained, and dismissed the Petition.

10.       Now the Ld. Advocate for the Appellant relies upon the case of Kailash, Appellant Vs. Nanhku & others, Respondents – (2005) 4 SCC 480, wherein the Hon’ble Supreme Court considered the Judgement delivered by the Supreme Court in the case of Dr. J.J. Merchant Vs. Shrinath Chaturvedi – (2002) 6 SCC 635, and had held, “A careful reading of the judgment shows that the provisions of Order 8 Rule 1 CPC did not directly arise for consideration before the Court and to that extent the observations made by the Court are obiter.”   It was further observed that the attention of the Court was not invited to the earlier decision of that Court in Topline Shoes Ltd. case – (2002) 6 SCC 33.  Ultimately, their Lordships came to the conclusion that, “A prayer seeking time beyond 90 days for filing the Written Statement ought to be made in writing.  In its judicial discretion exercised in well settled parameters the Court may indeed put the defendants on terms including imposition of compensatory costs and may also insist on an affidavit, medical certificate or other documentary evidence (depending on the facts and circumstances of a given case) being annexed with the application seeking extension of time so as to convince the court that the prayer was founded on grounds which do exist.”  Ultimately it was held (Paras 44&45), “The extension of time shall be only by way of exception and for reasons to be recorded in writing, howsoever brief they may be, by the court.  In no case, shall the defendant be permitted to seek extension of time when the court is satisfied that it is a case of laxity or gross negligence on the part of the defendant or his counsel.  The court may impose costs for dual purpose: (i) to deter the defendant from seeking any extension of time just for the asking, and (ii) to compensate the plaintiff for the delay and inconvenience caused to him.

            Howsoever, no straitjacket formula can be laid down except that the observance of time schedule contemplated by Order 8 Rule 1 shall be the rule and departure therefrom an exception, made for satisfactory reasons only.  We hold that Order 8 Rule 1, though couched in mandatory form, is directory being a provision in the domain of processual law.”

            This Judgement was not placed before the DRT, Ernakulam, when it passed Order on 4.2.2005, and only in the said circumstances, the DRT based upon the earlier Judgement of Dr. J.J. Merchant & others, held that time for filing the Written Statement cannot be extended beyond 90 days from the date of service of summons on the defendants.  But now, the pronouncement in Kailash’s case: (2005) 4 SCC 480, enables the Court to extend the time for filing of Written Statement even beyond 90 days, of course, for valid reasons.  In the given case, the Appellant has stated they were optimistic of settling the claim and only on that ground they were not able to file the Written Statement in time.  Though it does not appear to be satisfactory, but however, taking note of the lenient view taken by the Hon’ble Supreme Court, I am inclined to condone the delay in filing the Written Statement, but however, on cost, as the Appellant was not diligent in filing the Written Statement not only within the time stipulated, but even thereafter also.

11.       In the above said circumstances, the Appeal is allowed on condition that the Appellant shall deposit a sum of Rs.10,000/- (Rupees Ten thousand only) by way of costs before DRT, Ernakulam, by Demand Draft taken in the name of “Prime Minister’s National Relief Fund”, on or before 16.11.2005, failing which the Order passed today shall stand erased and recalled.  On such deposit, the DRT, Ernakulam, is directed to send the Demand Draft to the Prime Minister’s National Relief Fund, at Delhi.

(Dictated to PS in the open court today 26.10.2005, typed by him & order signed by me)

                                                                                                                        Sd/-

[ JUSTICE  K. GNANAPRAKASAM ]

CHAIRPERSON