Gade Sreenivas Reddy vs State Bank Of India

Instant appeal is preferred against an order dated 01.10.2024 passed by Learned DRT-I, Hyderabad in I.A. 766 of 2024 in MAIR No. 171 of 2024 in O.A. No. 625 of 2019 whereby the Learned DRT dismissed the I.A. for condonation of delay in filing the application to set aside the ex parte order dated 31.01.2020 passed in O.A. No. 625 of 2019.

As per pleading of the parties, Appellant herein is the Applicant before the Learned DRT who moved the application on 21.02.2024 for setting aside the ex parte judgment passed in O.A. 625 of 2019 dated 31.01.2020. It is alleged that the Applicant received the warrant of attachment dated 21.02.2024 on 9.2.2024 from the Bank. On enquiry he came to know that he is Defendant No. 4 in the O.A. proceedings filed by the Bank. No summons was ever served upon the Appellant. Service was held to be sufficient through publication in Nava Telangana Daily News Paper dated 8.11.2019. Accordingly, Appellant moved an application for setting aside the ex parte judgment with an application for condonation of delay of 148 days in moving the application.

Opposition filed by the Bank disputing the contentions raised by the Appellant stating that the Respondent No. 5 is the Borrower who availed credit facilities from the Bank. Appellant herein is Defendant No. 4 in the O.A. proceedings, who is the Director of the Borrower Company and is a Guarantor. Notices issued to the Appellant were returned unserved and notices were served through publication. Notices were sent on the same address wherein the attachment order was sent. In the Writ Petition No. 20989 of 2019 filed by the Appellant, an I.A. was filed wherein in reply to the same Bank stated that the O.A. proceedings filed by the Bank against the Appellant are decided on 31.01.2020, hence, Appellant was having full knowledge of the O.A. proceedings. No ground is made out for condonation of delay.

Learned DRT dismissed the application for condonation of delay on the ground that the Appellant was having sufficient knowledge and there is no ground made out for condonation of delay in preferring an application for setting aside the ex parte judgment.

Feeling aggrieved by the impugned judgment the Appellant preferred the appeal.

Heard the Learned Counsel for the parties and perused the record.

Learned Counsel for Appellant would submit that notices issued in the O.A. proceedings were never served upon the Appellant. It was the bounded duty of the Bank to serve the Defendant in the O.A. proceedings. Substituted service cannot be an alternative of the personal service unless and until it is shown that the Appellant is avoiding the service. Reliance is placed upon a judgment of the Hon'ble Calcutta High Court in Shiw Murat Sharma -vs- Allahabad Bank (2001 SCC OnLine Cal 190). Learned Counsel has also placed reliance upon another judgment of the Hon'ble Bombay High Court passed in Writ Petition No. 101 of 2019 (M/s. Real Gem Buildtech Private Limited -vs- M/s. East Tradvest Private Limited) decided on 9th July, 2026.

Learned Counsel for Appellant would further submit that despite the fact that notices are not served upon the Appellant, substituted service, through publication, cannot be held to be sufficient service. Accordingly, when a warrant of attachment was served upon the Appellant and the Appellant came to know about the order in the O.A. proceedings, Appellant preferred an application for condonation of delay along with setting aside the ex parte judgment.

Per contra, Learned Counsel for Respondent submits that Appellant was having full knowledge of the O.A. proceedings. Sufficient service was made upon the Appellant through publication as the notices sent on the same address were not served. It is further submitted that on the same address the order of attachment was sent which got served. Hence, the substituted service was held to be sufficient by the Learned DRT.

Learned Counsel would further submit that the factum of O.A. proceedings having been decided on 31.01.2020 was well within the knowledge of the Appellant as the same was mentioned in the reply in the writ petition filed by the Bank in July 2023. Hence, the Appellant cannot take a plea that he has no knowledge of the O.A. proceedings before service of the order of attachment.

Learned Counsel further submits that in the letter dated 29.10.2019 by the Bank to the Appellant for O.T.S. specifically it was mentioned that a suit is filed against all the guarantors at DRT-I Hyderabad for recovery of loan dues. In the letter dated 22.11.2020 the same fact was mentioned. There is no denial about the receipt of those letters. Hence, Appellant was having full knowledge of the O.A. proceedings.

Hon'ble Calcutta High Court in the case of Shiw Murat Sharma (supra) held that in that case Bank could not produce any material before the Tribunal that the Defendant or the Petitioner in the Writ Petition had otherwise knowledge of the proceedings. Law laid down by the Hon'ble High Court on the issue of service of summons would apply to the facts of the case but as on facts the judgment would not be applicable in the present case as in the letters dated 29.10.2019 and 24.11.2020, issued by the Bank to the Appellant it was categorically mentioned that the O.A. proceedings have been filed against the Appellant. Hence it was well within the knowledge of the Appellant that O.A. proceedings are pending against him. Further in the month of July 2023 when reply was filed before the Hon'ble High Court in the Writ Petition, it was mentioned that O.A. proceedings have already been decided in favour of the Bank. It would be the sufficient knowledge of the fact that O.A. proceedings were filed and decided against the Appellant. Despite that the application for setting aside the ex parte judgment and the judgment was filed on 21.02.2020 along with an application for condonation of delay which was rightly dismissed by the Learned DRT. We do not find any impropriety in the impugned order. Appeal lacks merit and is liable to be dismissed.

In the facts of the present case, the Appellant cannot take advantage of the judgment of the Hon'ble Bombay High Court in the case of M/s. Real Gem Buildtech Private Limited (supra).

Accordingly, appeal is dismissed.

File be consigned to Record room.

Copy of the Judgment/Final Order be uploaded in the Tribunal's Website.

Order pronounced in open Court.