Arihant Industries Limited & Anr. vs DRT-II & Ors.

JASGURPREET SINGH PURI, J. (Oral)

The present Civil Writ Petition has been filed under Articles 226/227 of the Constitution of India seeking issuance of a writ in the nature of certiorari for setting aside the order dated 21.05.2022 (Annexure P-9) passed by respondent No.1, vide which the application filed by the petitioners seeking production of documents as well as their statutory exhibited by respondent No.2 has been dismissed and a cost of Rs.1,00,000/- has been imposed upon the petitioners.

Learned counsel appearing on behalf of the petitioners submitted that in the present case, respondent Nos.2 and 3, which is a financial institution had filed an Original Application before the learned Debts Recovery Tribunal vide Annexure P-1. The written statement was filed by the petitioners before the learned DRT and thereafter, the pleadings were also completed. He submitted that there is a provision under the Recovery of Debts and Bankruptcy Act, 1993, which is contained in Section 19(5-A), which was inserted by way of an amendment with effect from 04.11.2016 and has been reproduced in paragraph No.14 of the writ petition, wherein it has been specifically provided that on receipt of the written statement of the defendant, or on expiry of the time granted by the Tribunal to file the written statement, the Tribunal shall fix a date of hearing for admission or denial of documents produced by the parties to the proceedings. He further submitted that, in pursuance of the aforesaid provision being inserted in the aforesaid statute, the petitioners had moved an application vide Annexure P-6 dated 18.08.2021, which was after the aforesaid amendment came into force but at the time of consideration of the aforesaid application by the learned DRT, the aforesaid provision of Section 19(5-A), although has been noted in the contentions but has not been considered or discussed by the learned DRT. He submitted that it was imperative and obligatory on the part of the learned DRT to have at least considered the aforesaid provision in accordance with law and, thereafter, to have passed an order.

Learned counsel further submitted that his limited prayer in the present petition is to the extent that the aforesaid provision of law ought to have been considered by the learned DRT, and prayed that the impugned order may be set aside and the matter may be remanded back to the learned DRT for consideration of the same in accordance with law. He also submitted that the costs which have been imposed upon the petitioners were also uncalled for because it was the learned DRT who had not considered the statutory provision of law.

On the other hand, Mr. Baldev Singh Badhran, learned counsel appearing on behalf of respondents No.2 and 3, through video conferencing submitted that on facts, he cannot dispute that the aforesaid provision of law, which was inserted by way of an amendment on 04.11.2016 vide Section 19(5-A) has not been discussed or considered by the learned DRT. He has however submitted that the petitioners ought to have filed an appeal before the learned DRAT before coming to this Court.

We have heard the learned counsels for the parties.

The only short issue involved is with regard to whether the aforesaid provision under Section 19(5-A) was required to be considered by the learned DRT or not. One of the reasoning given by the learned DRT in the impugned order was that in case the prayer of the petitioners was to be accepted in the application, then it will delay the proceedings. However, the present writ petition has been filed in the year 2022, in which interim stay has been granted vide order dated 19.07.2022, whereby it was so directed that there shall be a stay of all further proceedings before the learned DRT. In this way, rather there has been a further delay of four years. The objection raised by the learned counsel appearing on behalf of respondents No.2 and 3 with regard to the existence of an alternative statutory remedy of appeal would therefore not be of much relevance because a large delay has already been caused and the only limited prayer of the petitioners is that a fresh order be passed by the learned DRT after considering the aforesaid provision of law contained in Section 19(5-A), in accordance with law.

It was also stated by the learned counsel for respondents No.2 and 3 that there is no dispute regarding the fact that the aforesaid provision of law has not been considered.

We are of the considered view that in the aforesaid peculiar facts and circumstances of the present case, it will not be proper to relegate the petitioners to the alternative remedy at this stage, after about four years and when there was already an interim order passed by this Court.

Considering the limited prayer made by the learned counsel for the petitioners and the factual position not being disputed by the learned counsel for respondents No.2 and 3, the present petition is allowed. The impugned order dated 21.05.2022 (Annexure P-9) is hereby set aside. The matter is remanded back to the learned Debts Recovery Tribunal-II, Chandigarh, to pass a fresh order after considering the provision of Section 19(5-A) of the Recovery of Debts and Bankruptcy Act, 1993, and after giving adequate opportunity of hearing to all the parties, strictly in accordance with law. The fresh order shall be passed by the learned DRT within a period of two months from today. Both the parties shall be entitled to take all pleas, including pleas of law before the learned DRT, in accordance with law.

Consequently, the interim order dated 19.07.2022 stands vacated.