Eider Technologies Ltd. And Ors. vs Canara Bank

Ranjit Singh, J

The appellants herein had filed an application (M.A.) under Order 9 Rule 13, CPC for setting aside the ex parte judgment dated 30.3.2004 passed by the Tribunal below in O.A. 139/2002. The Tribunal below has dismissed the said MA. and accordingly the appellants have filed the present appeal. Some of the appellants like Mrs. Rama Sinha had filed two appeals (Nos. 326/2012 and 327/2012) challenging the ex parte order passed by the Tribunal below while allowing the O.A. Nos. 137/2002 and 138/2002 respectively. These two appeals came up for consideration before this Tribunal and vide order dated 15.7.2014 both the appeal were dismissed by a common order.

Similar are the grounds of challenge in the present appeal to impugn the order dated 8.2.2013 passed in this case where the appeal field by some of the appellants herein had been dismissed.

The Counsel appearing in the present appeal had appeared to make submission in the earlier two appeal Nos. 326/2012 and 327/2012 and thus he is well aware of the order dismissing these appeals passed by the Tribunal. The Counsel for the appellants, however, has still insisted to make submission in the present appeal afresh on the ground that some of the issues now raised had not been raised by the appellants in the said two appeals.

The primary question in those two appeals and in the present appeal, however, is common that is if the appellants had been properly served in the O.As. or not. Once in its order dated 15.7.2014 this Tribunal has held that the appellants were properly served, it may really not be possible for this Tribunal to take a different view, especially when no case is made out in this regard. Nothing new is pleaded in the present appeal so far as the aspect of service is concerned.

Since the Counsel for the appellants has still persisted with his pursuit to bring two issues which were not addressed by him, he has been heard though these, in my view, would not lead to change of view by this Tribunal.

When this appeal came up for consideration on 14.11.2014, Counsel for the appellants was reported to be unwell. In the interest of justice, the case was adjourned to 8.1.2015 for arguments, observing that the Counsel for the appellants had not even shown courtesy to make a request for adjournment. On 8.1.2015 also none had come present for the appellants and this appeal was dismissed for non-prosecution. An application (Misc. Case No. 83/2015) has now been filed for setting aside the order dated 8.1.2015 and consequently for restoration of appeal. Since the appeal has been permitted to make submission on merit today, the order dated 8.1.2015 dismissing the appeal for non-prosecution would be deemed have been recalled.

To recapitulate the challenge, some mention to the facts may be called for.

As already noted in the earlier order, the appellants had obtained certain credit facilities from respondent Canara Bank. When the appellants failed to repay the loan liability, the Bank had filed three O.As. which included O.A. No. 139/2002. The two O.A. Nos. 137/2012 and 138/2002 were decided on 25.8.2004, whereas, the present O.A. No. 139/2002 was decided on 30.3.2004. Like in other two cases, appellants filed M.A. under Section 19(25) read with Section 22 of the RDDBFI Act coupled with Order 9 Rule 13 for setting aside the order of 29.1.2003 whereby the appellants were proceeded ex parte and also to challenge the judgment dated 30.3.2004 passed in O.A. No. 139/2002.

While rejecting this M.A. the Tribunal below has noticed that only one issue has been raised by the appellants and that is they were not sufficiently served in O.A. No. 139/2002, which was allowed ex parte.

The issue in regard to effecting service on the appellants properly was raised in the earlier appeals in the following manner:

"....To elaborate this plea, the appellants had pleaded that the O.A. was fixed for hearing on 22nd March, 2002 and notice was issued to the defendants by way of speed post, registered post and dasti affixation. As per the appellants, no notice by registered post or speed post or by way of dasti was ever served on the appellants. The record show that on the first date of hearing, the Counsel had put in appearance on behalf of the defendants (including the appellants) in the O.A. and they were directed to file their power of attorney. The appellants would deny if any power of attorney was issued to the Counsel and that they were never served. Despite this position, the O.A. was finalized and the judgment was passed on 25th August, 2014 and Recovery Certificate was issued pursuant thereto. As per the appellants, it is only after receiving copy of the judgment through registered post that they made efforts to verify the factual position. After taking legal opinion, the present application for setting aside the ex parte judgment and Recovery Certificate was filed after engaging a Counsel. It is at the time of filing of this application that the appellants could learn from the inspection of the record that the respondent Bank had submitted before the Tribunal that notices were duly served on the appellants. This, as per the appellants, was done with deliberate and mala fide intention in order to militate and harm the appellants and their reputation by judgment at their back. Reference was made to judgment in the case of Virender Singh Bahl v. Y.K. Kapoor, 2001 (2) RCR (Civil) 190, to urge that service of summons normally has to be effected on the party in person. As per the appellants, in the present case summons had been received by one Shri Hardam Singh who was not a party in person and hence service of notice to said Shri Hardam Singh could not be therefore sufficient service to the appellants. The appellants would also take support from Order 5 Rule 9A, CPC in this regard."

After noticing the response of the Bank that Mr. Hardam Singh had accepted notice on behalf of all the appellants who had filed affidavit before the Tribunal in defence of all the defendants and the fact they were represented by a Counsel Mr. Deepak Aggarwal, this Tribunal noticed that the appellant Mrs. Rama Singh and Mr. Sanjay Sinha were wife and son of appellant Mr. A.K. Sinha. The fact that service was effected on appellant Mr. A.K. Sinha was not in dispute. This was duly noticed by this Tribunal in its order dated 15.7.2014. This Tribunal had accordingly noticed that the plea that Mr. Hardam Singh was not an authorized representative would stand negated by the fact that he had thereafter filed affidavit in defence of Mr. A.K. Sinha who was duly served and had acknowledged this fact. After noticing this factual position, this Tribunal, while dismissing the appeal has held as under:

"The submissions made by the Counsel for the appellants are mainly on the ground that no notice was served on the appellants and the appellants as well as the Company being independent entities ought to have been served separately. As per the Counsel, the manner in which service of notice had been effected on the appellants and other defendants would not be sufficient service in the eyes of law. As per the Counsel, Mr. Hardam Singh could not have legally accepted notice on behalf of the appellants. The Counsel would make reference to memo of parties to urge that the address of the Company and that of the appellants and of defendant No. 5 were different. As per the appellants, different defendants, thus, could not have been properly served at the same address and through the same person namely Shri Hardam Singh. The Counsel would also plead that Shri Hardam Singh was not an authorized agent of the Company to accept notice on behalf of the defendants and the manner in which he is shown to have accepted service on behalf of the defendants including the appellants would not satisfy the requirement of law for effecting service on the appellants. The Counsel would rely on Order 5 Rule 9A(2) which provides that the service of such summons shall be effected by or on behalf of such plaintiff by delivering or tendering to the defendant personally a copy thereof signed by the Judge or such Officer of the Court as he may appoint in this behalf, etc. The Counsel, accordingly, would contend that service has to be effected personally as per this provision of the CPC. When the Counsel is asked to explain as to how service is to be effected on company, the Counsel has referred to Order 5 Rule 13, CPC which provides for effecting service on agent by whom defendant carries on business. As per this rule, service on the manager or agent, who, at the time of service, personally carries on such business or work for such person within such limits, shall be deemed to be good service. In this context, the acceptance of service by Shri Hardam Singh on behalf of the Company and the other defendants may have to be considered.

The Counsel for the respondent Bank, however, would refer to the fact that Shri Hardam Singh, who had accepted the notice on behalf of the defendants, was the one who had filed an affidavit before the Tribunal in defence of the appellants. It may also be worth a notice that initially Mr. Deepak Aggarwal, who had appeared for defendant Nos. 1 and 5, had put in appearance on behalf of all the defendants including the present appellants. The Counsel for the respondent Bank has invited my attention to the Vakalatnama filed on record of the Tribunal below where the appellants and other defendants had authorized Mr. Deepak Aggarwal to appear on their behalf and indeed he had put in appearance on their behalf before the Tribunal below. Subsequently, however, he had made a statement that he will appear only on behalf of defendant Nos. 1 and 5.

The fact that the appellants are wife and son of defendant No. 5 cannot be easily ignored. Another significant fact, which cannot be ignored, is that Shri Hardam Singh is not a stranger to the appellants and in fact affidavit filed by the Bank that all the defendants had been served would receive support from the fact that said Shri Hardam Singh alone filed an affidavit in defence of the defendants. Counsel for the respondent Bank would state that whatever was to be urged on behalf of the defendants was so stated and urged by Shri Hardam Singh. Initial remark by the Counsel for the appellants that Shri Hardam Singh was not an authorized agent would stand negated by the fact that he thereafter had filed affidavit in defence of the defendants. No doubt, direction was to serve the defendants by speed post, registered post and dasti, but it would not mean that in case service had been effected through one of the modes permitted by the Tribunal, would not be enough and the Bank would be required to show that service had been effected by all three modes permitted by it. The Tribunal below is also justified in observing that Shri Hardam Singh, who had filed an affidavit in response to the O.A., could have very well been asked to file an affidavit by the appellants that he had not accepted service on their behalf. The case set up by the Bank was that the appellants were served through Shri Hardam Singh, who accepted the notice on behalf of the appellants after talking to them on telephone. If that was not the fact, Shri Hardam Singh could have easily come forward to deny the same. That having not been done, it would be reasonable to presume that he had accepted service of notice on behalf of the appellants as well. Evidence which could be produced and has not been produced, obviously, would mean that the same if produced would have gone against the one who has withheld the same. Such type of presumption can be drawn in terms of Illustration (g) to Section 114 of the Indian Evidence Act, 1872.

There is yet another aspect which would confront the appellants directly and would give lie to their submissions made in the present appeal. The Counsel for the respondent Bank has placed before me an order passed by this Tribunal on 24th December, 2009 whereby Inward/Appeal No. 236 of 2003 filed against the order passed in OA No. 138/2001 was dismissed by this Tribunal. This appeal was filed by the Company as well as Mr. A.K. Sinha, who is none other than husband of appellant Smt. Rama Sinha and father of appellant Mr. Sanjay Sinha. This appeal had also been dismissed in default on 20th February, 2006 and plea before this Tribunal was that the Counsel who was entrusted with the appeal had not informed the appellants about the requirement of filing of the Balance Sheet and individual affidavits giving details of the assets and liabilities. The application for restoration of the appeal was filed with delay of 938 days. No body had been appearing on behalf of the appellants since December 28, 2004 i.e. for the period of about four years. The appellants in the said appeal stated to have acquired knowledge about the order dated December 28, 2004 on 24th September, 2008.

Rejecting all these submissions, this Tribunal observed that all these arguments are lame excuses. The Tribunal found that the case was not dismissed in default for negligence on the part of the Advocate. As per this Tribunal, the said appellants were negligent, reckless and have made attempt to evade truth. The said application accordingly was rejected. From this, Counsel for the respondent Bank would allege that the present appellants cannot plead ignorance once the appeal against the order which they have now challenged had been rejected on 24th December, 2009 and which had been filed in the year 2004. It was dismissed in default in the year 2006 when their Counsel had stopped appearing from 28.12.2006.

Though the Counsel for the appellants would urge that merely because the present appellants had given the same address as that of Mr. A.K. Sinha would not mean that they were living together and that would dispense with the requirement of effecting service on the appellants separately. The Counsel for the appellants, in my view, is forgetting the very important aspect of the case that even service had been effected on Mr. A.K. Sinha in the same manner through Shri Hardam Singh as was effected on the present appellants. I can understand that in case Mr. A.K. Sinha had been a stranger or at least not closely related to the appellants, it would be too much to accept that defendant No. 5 in the case would be aware of the proceedings pending before the Tribunal below and his wife and son would be ignorant about the same while they were statedly residing at the same address. Obviously, the present move apparently has been adopted to delay the recovery proceedings. In my view, the Tribunal below has rightly rejected the prayer of the appellants and has dismissed their prayer for recall of the order. No case is made out for calling for any interference in the impugned order The present appeals are, therefore, dismissed."

In view of the detailed discussion in regard to the aspect of service on the appellants, no cause is made out for reconsidering this issue in any manner. It is, however, of a serious concern that Mr. A.K. Sinha is one of the appellants in the present appeal pleading that he was not properly served. The factual position is that he had been served and had filed appeal against the order passed by the Tribunal below in the year 2004. This appeal was dismissed in default in the year 2006 as his Counsel stopped appearing from 28.12.2006 onwards. How then the appellant Mr. A.K. Sinha can make a grievance of he being not served and has become participant in the present appeal whereas he had earlier approached this Tribunal by filing an appeal? Obviously, this may show a misuse and abuse of process of Court by the said appellant. Such litigants are required to be discouraged in making such approach by misstatement of facts and thus amounts to misleading the Court or the Tribunal.

The additional ground now urged by the Counsel for the appellants to insist on re-agitating the issues in the present appeal are that the Order 5 Rule 13, CPC relied upon by the Bank is not applicable and only Order 5 Rule 9-A, CPC would be relevant in this regard. The Counsel for the appellants would contend that Order 5 Rule 13, CPC which talks of service on agent can only be for a person who does not reside in the local limits of the Court from which summons are issued. It is to be appreciated that the summons were issued in the name of appellants and it was accepted on their behalf by Mr. Hardam Singh after taking instruction on phone from them. One of the appellants, Mr. A.K. Sinha who was also served is not a stranger to the other appellants being husband and father of the other appellants. The service was thus properly effected and all the pleas now raised are just red-herring without any basis and substance.

The next submission made by the Counsel for the appellants is that he has filed M.A. pointing out before the Tribunal below that the company was before BIFR in the year 2000 and thus all the proceedings before the Tribunal were required to be stopped. This issue was never raised before the Tribunal below. Filing M.A. to bring out this fact in a case where the O.A. stood allowed cannot be permitted to be raised in the present appeal.

Similarly, the plea that the appellants had raised a counter-claim against the Bank is a plea which is hanging in the air as the counter-claim could be raised only while filing written statement in the O.A. and filing a separate M.A. to make counterclaim is legally impermissible. Therefore, it would not call for any consideration. There is no merit in any of the pleas raised on behalf of the appellants and this appeal is accordingly dismissed. The appellant Mr. A.K. Sinha, however, is saddled with the cost of 20,000/- for abuse of the process of this Tribunal.