Deshpal Singh vs Punjab And Sind Bank And Ors

P.K. Bhasin, J

Order on application of appellant for condonation of delay in filing of this Appeal against order dated 6.6.2007 passed by DRT

By way of this appeal under Section 20 of the Recovery of Debts and Bankruptcy Act, 1993 (earlier known as the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and hereinafter to be referred as 'the Act of 1993') the appellant has challenged the legality of the recovery certificate issued by the Debts Recovery Tribunal (DRT) on 6.6.2007 in respondent No. 1 Punjab and Sind Bank' Original Application (O.A.) No. 260/1995 under Section 19 of the Act of 1993. That O.A. was earlier a civil suit for recovery of the Bank's dues filed in Delhi High Court and which civil suit with the establishment of DRTs in 1993 came to be transferred to the DRT where it was registered as O.A. No. 260/1995. The DRT had issued recovery certificate for a sum of Rs. 63,31,611/- with interest thereon in favour of the applicant Bank (hereinafter to be referred as 'the Bank') against respondents 2 and 3 in this appeal and the appellant and his brother Jaswant Singh, respondent No. 4 herein, as the legal heirs of deceased defendant No. 3 in the O.A. late Smt. Veeran Wali who was being sued as a guarantor and mortgagor of House No. 7/27, West Patel Nagar, New Delhi (hereinafter to be referred as 'the property in dispute'). She had though initially contested the Bank's O.A. by filing her written statement and partly cross-examining the Bank's witnesses but then she expired in August 2001 before the O.A. could be finally disposed of. The Bank, however, did not take any steps for bringing on record her legal heirs within the prescribed period and consequently the O.A. as against her was rejected as having abated vide order dated 14.1.2002 by the learned Presiding Officer of the DRT. Thereafter, the appellant approached the DRT with an application for release of the title deeds of the property in dispute which the Bank was claiming to be its mortgaged property while the deceased defendant Veeran Wali was refuting that claim of the Bank. In that application the death of late Veeran Wali came to the notice of the Bank but despite that no application was moved by the Bank to bring on record her legal heirs including the appellant herein who was claiming to have become the owner of the property in dispute on the basis of a Will allegedly executed in his favour by her mother.

However, the Bank eventually moved applications before the DRT sometime in 2003 for bringing on record the appellant and his brother Shri Jaswant Singh as the legal representatives (LRs) of late Smt. Veeran Wali and vide order dated 30.5.2006 the DRT set aside the abatement of the O.A. and also brought on record the appellant and his brother as the LRs of the deceased defendant. Since the appellant had in the meanwhile stopped appearing in the DRT to pursue his application for return of the title deed of the property in dispute which he claimed to have become entitled to get back being the sole beneficiary in respect of the property in dispute under the Will of his deceased mother the DRT did not consider it necessary to issue any notice for appearance to the two LRs of the deceased defendant and both were directed to be proceeded against ex parte on 30th May, 2006 itself. And finally the O.A. came to be disposed of on 6.6.2007 with the issuance of a recovery certificate for the claim amount with interest.

The appellant filed the present appeal sometime in the year 2015 to challenge the final order dated 6.6.2007 in the Bank's O.A. The appeal was filed after a delay of 2818 days and, for seeking an order of condonation of that much delay from this Appellate Tribunal the appellant had also moved an application for condonation of delay, being I.A. No. 253/2015.

The present appeal came to be heard by my learned predecessor Chairperson on 23.4.2015 for admission of that date itself the appeal was dismissed in limine. At that time it was noticed that there was an application for condonation of delay of 2818 days in the filing of this appeal and while rejecting the appeal it was observed that "........... Once the appellant could not succeed in his effort to get ex parte judgment set aside in the O.A. in the year 2007, he seems to have been ill advised to challenge the order passed in the O.A. now. Appeal/Inward No. 162/2015 filed to challenge the order dated 6.6.2007 is nothing but abuse of process of Court..... How can the appellant be heard in this appeal which is nothing but a second appeal? In any case, this appeal is filed with inordinate delay.........the appellant even cannot justify the delay in filing the appeal against the order passed in O.A. The appellant had the knowledge of this order, when it was passed in the year 2007. He cannot be heard now at this stage to seek condonation of this delay."

The appellant then approached the Hon'ble Delhi High Court by filing a writ petition (being CWP No. 10663/2015) to challenge the order of this Tribunal rejecting his appeal in limine. That writ petition came to be allowed on 13.1.2016 and the matter was remanded back to this Tribunal for a fresh decision. While remanding back the matter to this Tribunal Hon'ble High Court observed that ".................. We find an observation by the Debts Recovery Appellate Tribunal that the writ petitioner cannot justify the delay in filing the appeal, but the observation is sans a detailed reasoning dealing with the application filed by the writ petitioner in which facts have been pleaded with the prayer that delay in filing the appeal be condoned."

Accordingly after the remand of the matter by High Court this Tribunal specifically heard arguments on the application of the appellant seeking condonation of delay in the filing of this appeal against the order dated 6.6.2007 passed by the DRT.

In paras No. 7 to 14 of the delay condonation application the appellant pleaded and which factual averments have not been disputed are as under:

"7. The appellant was all throughout bona fidely acting on the legal advice given to him. The appellant, upon gaining knowledge of the final order dated 6.6.2017, immediately filed a MA bearing No. 35/2007 in T.A. No. 122/00 (OA No. 260/1995) under Section 22(2) of the RDDBFI Act, 1993 read with Order 22 and Order 9 Rule 13, CPC for setting aside the ex parte decree dated 6.6.2017 on the grounds of non-issuance of notice to the appellant therein.

In the said MA, the learned DRT was pleased to stay the recovery proceedings vide order dated 6.11.2007.

However, thereafter, the learned DRT proceeded to dismiss the application of the appellant vide its order dated 18.1.2010.

The said order of dismissal of the application under Section 22(2) read with Order 9 Rule 13, CPC was challenged by the appellant before the Hon'ble DRAT vide its order dated 22.11.2010 thereafter dismissed the appeal of the appellant, while partially modifying the order dated 18.1.2010.

Thereafter, the learned RO-II, DRT-II, New Delhi initiated recovery proceedings against the appellant. As per the advice received by the appellant, the appellant filed his objections under Rule 11 of the Second Schedule to the Income Tax Act, 1961 on 27/29.11.2012, against the attachment orders passed by the learned RO.

The said objections came to be dismissed by the learned RO only on 20.8.2014. Against the said order, the appellant immediately filed an appeal bearing Appeal No. 61/2014 before the learned DRT.

The learned DRT, after considering the appeal of the appellant, dismissed the same vide the order dated 3.3.2015, which is also challenged herein.

That there is no intentional or deliberate delay in preferring the appeal qua the said order dated 6.6.2007 and the appellant had all along been bona fidely following the advice given to him. The appellant had in fact been trying to bona fidely pursue the case before the appropriate authorities. The delay caused is totally unintentional and has been occasioned for the aforesaid justifiable grounds and circumstances."

Undisputedly the delay of 2818 days in filing this appeal is huge but certainly it cannot be said that much delay cannot be condoned at all under no circumstances, as was the submission of the learned Counsel for the Bank.

Learned Counsel from both sides cited some judgments of the Hon'ble Supreme Court on which legal position as to what constitutes 'sufficient cause' to condone delay under Section 5 of the Limitation Act. The sum and substance of all the judgments cited from both sides is the same. Way back in the year 1987 the Hon'ble Supreme Court had while dealing Section 5 of the Limitation Act observed in a judgment rendered by it and which is reported as 1987 (SLT Soft) 185 : AIR 1987 SC 1353 : 1987 SCR (2) 387, Collector Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors., that:

"The legislature has conferred the power to condone delay by enacting Section 5 of the Indian Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on 'merits'. The expression "sufficient cause" employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice-that being the life-purpose for the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other Courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that-

"1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.

Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.

"Every day's delay must be explained " does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.

When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.

There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.

I" must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

(Emphasis laid)

Then in N. Balakrishnan v. M. Krishnamurthy, VII (1998) SLT 334 : IV (1998) CLT 63 (SC) : AIR 1998 SC 3222 the Hon'ble Supreme Court observed as under:

".......Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to want of acceptable explanation whereas in certain other cases delay of very long range can be condoned as the explanation thereof is satisfactory.

The reason for such a different stance is thus: The primary function of a Court is to adjudicate the dispute between the parties and to advance substantial justice. Time limit fixed for approaching the Court in different situations in not because on the expiry of such time a bad cause would transform into a good cause.

Rules of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly................

A Court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the Court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi Jain v. Kuntal Kumari, AIR 1969 SC 575 and State of West Bengal v. The Administrator, Howrah Municipality, AIR 1972 SC 749. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the Court must show utmost consideration to the suitor..............While condoning delay the Court should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when Courts condone the delay due to laches on the part of the applicant the Court shall compensate the opposite party for his loss."

(Emphasis laid)

These views continue to be reiterated in subsequent judgments also by the Apex Court. Similarly in Perumon Bhagvathy Devaswom v. Bhargavi Amma (D) Thr. L.Rs., VI (2018) SLT 647 : III (2008) CLT 425 (SC) : (2008) 8 SCC 321, the Apex Court had observed as under while dealing with the question as to what constitutes "sufficient cause" for the purpose of Section 5 of Limitation Act:

"6. What should be the approach of Courts while considering applications under Section 5 of Limitation Act, 1963, has been indicated in several decisions. It may be sufficient to refer to two of them. In Shakuntala Devi Jain v. Kuntal Kumari, AIR 1969 SC 575, this Court reiterated the following classic statement from Krishna v. Chathappan, 1890 ILR 13 Mad 269:

"... Section 5 gives the Courts a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words 'sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fides is imputable to the appellant."

In N. Balakrishnan v. M. Krishnamurthy, II (1998) SLT 334 : IV (1998) CLT 63 (SC) : 1998 (7) SCC 123, this Court held:

"It is axiomatic that condonation of delay is a matter of discretion of the Court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory.............."

The primary function of a Court is to adjudicate the dispute between the parties and to advance substantial justice.......... Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly.

A Court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the Court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice.

It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the Court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the Court should lean against acceptance of the explanation."

(Emphasis supplied)

In Ram Nath Sao v. Gobardhan Sao, 2002(3) SCC 195, this Court observed thus:

"12. Thus it becomes plain that the expression "sufficient cause" within the meaning of Section 5 of the Act or Order 22 Rule 9 of the Code or any other similar provision should receive a liberal construction so as to advance substantial justice when no negligence or inaction or want of bona fides is imputable to a party. In a particular case whether explanation furnished would constitute "sufficient cause" or not will be dependent upon facts of each case. There cannot be a strait-jacket formula for accepting or rejecting explanation furnished for the delay caused in taking steps. But one thing is clear that the Courts should not proceed with the tendency of finding fault with the cause shown and reject the petition by a slipshod order in over-jubilation of disposal drive. Acceptance of explanation furnished should be the rule and refusal, an exception, more so when no negligence or inaction or want of bona fides can be imputed to the defaulting party..........."

8..........(i) The words "sufficient cause for not making the application within the period of limitation" should be understood and applied in a reasonable, pragmatic, practical and liberal manner, depending upon the facts and circumstances of the case, and the type of case. The words 'sufficient cause' in Section 5 of Limitation Act should receive a liberal construction so as to advance substantial justice, when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the appellant."

(Emphasis supplied by me)

In early sixties the Apex Court in Ramlal, Motilal and Chhotelal v. Rewa Coalfields Ltd., 1961 (SLT Soft) 51 : AIR 1962 SC 361 : 1962 SCR (3) 762 had, however, also held that even after sufficient cause has been shown by an appellant form the delay in filing appeal the Courts will still examine whether the discretion to condone the delay should be exercised or not. It was observed as under:

"It is, however, necessary to emphasise that even after sufficient cause has been shown a party is not entitled to the condonation of delay in question as a matter of right. The proof of a sufficient cause is a condition precedent for the exercise of the discretionary jurisdiction vested in the Court by Section 5. If sufficient cause is not proved nothing further has to be done; the application for condoning delay has to be dismissed on that ground alone. If sufficient cause is shown then the Court has to enquire whether in its discretion it should condone the delay. This aspect of the matter naturally introduces the consideration of all relevant facts and it is at this stage that diligence of the party or its bona fides may fall for consideration; but the scope of the enquiry while exercising the discretionary power after sufficient cause is shown would naturally be limited only to such facts as the Court may regard as relevant. It cannot justify an enquiry as to why the party was sitting idle during all the time available to it. In this connection we may point out that considerations of bona fides or due diligence are always material and relevant when the Court is dealing with applications made under Section 14 of the Limitation Act.........."

In another judgment rendered on 19.9.1997 by the Apex Court in the case of P.K. Ramachandran v. State of Kerala & Anr., 1997 (SLT Soft) 867 it was observed that:

"Law of limitation may harshly effect a particular party but it has to be applied with all its rigour when the statute so prescribe and the Courts have no power to extend the period of limitation on equitable grounds."

(Emphasis laid)

Keeping these views and observations of the Hon'ble Supreme Court in mind it is now to be seen whether in the present case the appellant has been able to show that he had 'sufficient cause' in not preferring the present appeal within the prescribed period of appeal. The decision of the DRT which has been impugned in this appeal was given on 6.6.2007. This appeal was filed in the year 2015. But that fact by itself should not be considered good enough to throw out this appeal as time barred as was the submission of the Counsel for the Bank. It is undisputed that the impugned order dated 6.6.2007 was passed after appellant's mother's death during the pendency of the Bank's O.A. and without issuance of any notice to the LRs of the deceased defendant Smt. Veeran Wali on the ground that one of the legal heir, the appellant herein, was already aware of the pending matter since he himself had moved an application after the O.A. had been treated as having abated. Thus, the impugned order was considered by the appellant to be an ex parte order and that too without any evidence having been adduced by the deceased defendant in support of her plea that defendants 1 and 2 in the O.A. in collusion with Bank officials had played fraud on her by forging her signatures on loan documents and had also managed to get the title deed of her property in dispute from another Branch of Punjab and Sind Bank from where she did take loan for the firm of her son, the appellant herein and get the title deed placed with the Branch of the same Bank which had advanced loan to the husband wife duo of respondents 2 and 3 herein, namely, Tejwant Singh and Surinder Kaur. The appellant claims that at that time he was advised by his Advocate to move an application for setting aside the order proceeding ex parte against him and not to challenge the same in appeal. He accepted that advice and took that route. There was nothing wrong committed by the appeal in accepting that legal advice and no mala fides either can be attributed in that decision taken by him at that moment of time. The learned Counsel for the respondent Bank did not dispute the legal position, and as has been observed even by the Hon'ble Delhi Court in its judgment vide which the matter was remanded back to this Tribunal for deciding afresh the delay condonation application which earlier was not disposed of by reasoned order, that when an ex parte order is passed by some Court the affected litigant can either approach the same Court for setting aside of ex parte proceedings or can also file an appeal and both remedies also can be availed of simultaneously also. Even the Hon'ble Supreme Court observed in Appeal (Civil) 8246 of 2004, Bhanu Kumar Jain v. Archana Kumar & Anr., I (2005) SLT 137 : AIR 2005 SC 626, that:

"We have, however, no doubt in our mind that when an application under Order 9, Rule 13 of the Code is dismissed, the defendant can only avail a remedy available there against, viz, to prefer an appeal in terms of Order 43, Rule 1 of the Code."

Here the appellant failed in his fight to get the ex parte proceedings ordered against him in the O.A. set aside. His application moved soon after the passing of the order dated 6.6.2007 by the DRT was rejected on 18.1.2010. Thus, that fight consumed a couple of years and then in appeal also some time was consumed which came to be rejected on 22.11.2010 by DRAT.

Then he was advised, as claimed by him and I find no reason to doubt his bona fides in accepting that piece of advice also of his Counsel, to take the route of objections under Rule 11 of the Rules under Second Schedule to the Income Tax Act for setting a side the attachment of his property by the Recovery Officer vide his order dated 8.10.2012. That advice of his Advocate also cannot be said to be not bona fide advice and even the learned Counsel for the Bank could not point any circumstance from which any ill motive could be inferred for directing the appellant to avail of that remedy also. There also he lost since the Recovery Officer dismissed his objections on 20.8.2014 and DRT dismissed his appeal against that order of the Recovery Officer on 3.3.2015. Thereafter, in April 2015 the present appeal came to be filed.

So, it cannot be said that the appellant was simply sitting idle and waiting for his remedy appeal getting time barred. He had nothing to gain by not filing appeal against the final order in the O.A. but he everything to lose only. His residential house in a prime colony of Delhi and was of the value of crores of rupees was going to be sold and so he could not afford to be lethargic or inactive. He was following the advice of his legal advisor and no mala fides can be attributed to him when he acted as per legal advice. I have no reason to conclude that the legal advice given to the appellant to wait for the orders of the Recovery Officer in execution proceedings in respect of the property in dispute ought not to have been acted upon. After losing before the Recovery Officer also the appellant was finally advised to file an appeal before this Tribunal which he did. Thus, it can be said that the appellant had all along been trying to save his property which he claimed to have inherited from his mother through her Will.

Thus taking an overall and holistic view of the matter this Tribunal has come to the conclusion that the appellant has been able to show sufficient cause for the condonation of delay in filing this appeal and this Tribunal should exercise its discretion in condoning the delay in the filing of this appeal and the appellant should get an opportunity to get the final chance to impugn the final order dated 6.6.2007 passed by the learned DRT and to show that even on the basis of existing pleadings and evidence, documentary as well as oral, the DRT could not have allowed the claim of the Bank and so its final order dated 6.6.2007 is liable to be reversed in appeal.

The delay application is accordingly allowed and the delay in filing this appeal stands condoned. However, considering all the facts and circumstances the appellant is also burdened with costs of Rs. 5 lacs out of which half of the money shall go to the Bank and half to be deposited by the appellant in Kerala Floods Relief Fund through any official channel within ten days and these payments shall be a condition precedent for the hearing of the appeal on merits and only on submission of proof of compliance on or before the next date of hearing the appellant's appeal will be heard on merits.