AI Structured Summary
Not yet generated for this judgment
Judgment
R. Sudhakar, J.—The bank has filed this writ petition to set aside the order of the Debt Recovery Appellate Tribunal extending the time
given to the respondents 1 and 2 to pay the bank as per the award of the Lok Adalat dated 30.11.2006 in M.A. No. 203 of 2006.
The facts of the case for disposal of the writ petition is as follows: The first respondent, who is the proprietrix of Sakthi Industries availed loans
from the petitioner bank for four different purposes, viz., (1) Open Cash Credit; (2) Supply Bills Purchase; (3) Medium Term Loan (building) and
(4) Medium Term Loan (machinery) with interest at 20.25%. There was an hypothecation agreement in respect of movables, plant and machinery
and the first respondent also deposited the documents of title deeds of properties by way of equitable mortgage. The loan amount, according to the
bank, was not properly settled and therefore, notice was issued for recovery of the same and on the failure on the part of the first respondent to
settle the claim, Original Application No. 450 of 2000 was filed by the bank against the first respondent Proprietrix of the company and V.
Padmanabhan, the guarantor, the second respondent for recovery of a sum of Rs. 62,96,582.68 with interest at 19.8% per annum with quarterly
rests from the date of application till date of realisation. The other reliefs sought for are as follows:
(b) directing the Recovery Officer to sell the property more particularly described in the schedule ""A"" & ""B"" hereunder and apply the sale
proceeds to the certificate amount, after defraying the expenses for sale.
(c) in the event of deficiency, directing the respondents 1 and 2 to pay the balance amount after appropriation of sale proceeds with further interest
at 19.89% per annum compounded quarterly upto the date of payment by passing a personal decree.
(d) directing the respondents to pay cost of this application and granting a recovery certificate in favour of the applicant for the above reliefs and
further reliefs as this Hon''ble Tribunal may deem fit and proper and render justice.
From the pleadings, it appears that the matter was taken up by the Debt Recovery Tribunal in March, 2002 for trial. Respondents 1 and 2 filed
proof affidavit and before documents were marked, at the request of the parties the case was referred to the Lok Adalat to be held on 10.9.2004.
Before the Lok Adalat, it appears, the respondents 1 and 2 submitted that they are also willing to settle the outstanding in respect of another
company, M/s. Sivan Precision Works, run by the second respondent for which loan was availed and extended by the petitioner bank. A proposal
for settlement of claim, on behalf of both the respondents were made and a sum of Rs. 34.5 lakhs was arrived at as one time settlement.
The petitioner bank and the respondents 1 and 2 settled their claim, before the Lok Adalat on 10.9.2004 and an Award was passed by the Lok
Adalat as follows:
The claim amount for O.A. No. 450/2000 is Rs. 62.97 Lakhs. The claim amount for Sivan Precision Works is Rs. 7.80 Lakhs.
The total claim for Sivan Precision Works is 7.80 Lakhs. The parties have settled the both the matters on the following terms and conditions:
(1) The defendant agrees to settle in both the matter for a sum of Rs. 34.5 lakhs.
(2) The defendant agrees to pay the said amount on or before 10.12.2004 with PLR interest. If the defendant pays the entire amount on or before
11.10.2004, the said amount shall not carry any interest.
If the defendant fails to pay the entire amount as per the above compromise, the bank is at liberty to claim the entire claim amount as per OA
450/2000 without reference to this compromise.
On the same day, i.e., on 10.9.2004, the Debt Recovery Tribunal, Chennai, Presided by Member, passed an order in Original Application No.
450 of 2000 as follows:
The case is taken up today on the basis of the Joint Memo of Compromise presented at by both parties before DRT-1 Lok Adalat (15th Lok
Adalat) held on 10th September, 2004. The Lok Adalat panel has reported settlement and has passed the Award as per the terms and conditions
contained in the Memo of compromise recorded before the Lok Adalat. As per Award, both the parties have arrived at for settlement of this case.
The above stated memo of settlement is duly approved and recommended by the panel of Lok Adalat consisting of Presiding Judge Shri A.S.
Khan (Retd. Judicial Member, CAT, Chennai) and Members Shri T. Veeraraghavan, (Retd. DGM) and Smt. Sudharashana Sundar, Advocate,
under their Signatures. The orders passed/observation made by the Lok Adalat (the Panelists) is reproduced here below:
When the matter was taken up for hearing the party represented by Thiru K. Balasubramani, Advocate and the Bank is represented by Thiru L.
Mohan, Advocate and Thiru R.N. Giriloganathan, Chief Manager, Indian Bank, Chromepet Branch, Chennai. When the matter was taken up, the
parties wanted to settle another connected matter M/s. Sivan Precision Works. The claim amount for OA No. 450/2000 is Rs. 62.97 Lakhs. The
claim amount for M/s. Sivan Precision Works is Rs. 7.80 Lakhs.
The total claim for Sivan Precision Works is Rs. 7.80 Lakhs. The parties have settled both the matters on the following terms and conditions:
1) The Defendant agrees to settle both the matters for a sum of Rs. 34.5 Lakhs.
2) The Defendant agrees to pay the said amount on or before 10.12.2004 with PLR interest. If the defendant pays the entire amount on or before
11.10.2004, the said amount shall not carry any interest.
If the defendant fails to pay the entire amount as per the above the compromise, the Bank is at liberty to claim the entire claim amount as per O.A.
No. 450/2000 without reference to this compromise.
Court fee is ordered to be refunded u/s 21(1) of Legal Service Authorities Act.
The Memo of Compromise and Award passed by the Lok Adalat appears to be legally in order and therefore, is accepted and taken on
record. Consequently, the O.A. stands finally disposed as settled in Lok Adalat as per the Award and strictly in terms and conditions contained in
the Memo of Compromise.
Final order is passed in terms of Award passed by the Lok Adalat as per the terms and conditions contained in the Memo of Compromise. A
copy of Adalat''s award shall form part of this order as well as the Recovery Certificate if issued.
Recovery Certificate may be issued in case of default or if deemed necessary. The Recovery Certificate be prepared and issued strictly as per
the terms of compromise and Award passed by the Lok Adalat.
Inform all the parties concerned. Ordered accordingly.
At the request of the respondents 1 and 2 by letter dated 8.12.2004, the petitioner bank extended the time for payment of the amount in terms
of the award of the Lok Adalat till 21.1.2005. Respondents 1 and 2, however, did not pay the amount by 21.1.2005. It is thereafter stated that the
respondents 1 and 2 sought for extension of time and they made part payment of Rs. 3 lakhs on 8.2.2005.
From February, 2005, the matter was in a stalemate and from the affidavit of second respondent, particularly in M.A. Nos. 295 and 296 of
2005 filed in O.A. No. 450 of 2000, it appears that in September, 2005, the bank had moved for early hearing of the matter. Thereafter, on
18.10.2005, a Recovery Certificate was issued in O.A. No. 450 of 2000 as follows:
O.A. No. 450 of 2000
RECOVERY CERTIFICATE
In the matter of
M/s. Indian Bank
10, Bashyam Street,
Radha Nagar,
Chromepet,
Chennai 600 044. ....Applicant Bank
v.
Mrs. P. Vijayakumari,
Prop. Sakthi Industries,
No. 134, Nemilicherry village,
Chromepet,
Chennai 600 044.
Mr. V. Padmanaban,
No. 07, Krishnaswamy Street,
Ganapathypuram,
Chromepet,
Chennai 600 004. ....Defendants
Whereas the above titled application having come up on 10.09.2004 for final disposal under provisions of Section 19 of the Recovery of Debts
due to Banks & Financial Institutions Act 1993 thereinafter referred to as the Act for the determination of debt against the respondents through lok
adalat.
Whereas the above defendants failed to honour the Lok Adalat verdict, it is hereby ordered and certified under Provisions of the Section 19 Sub-
clauses 4 & 7 of the Act for recovery of Rs. 62,96,582.68 with interest at 19.89% from the defendant from the date of application to the date of
realisation, thereon with costs.
It is further ordered that the defendant do pay the sum of Rs. 1,37,24,962.68 comprising of Rs. 62,96,582.68 as principal and Rs. 73,13,647.00
as interest and Rs. 1,14,733.00 as costs from the above named defendant as per the schedule of costs within the time extended if any.
It is further certified that in default of such payment as aforesaid the amount due shall be recoverable by sale of hypothecated movable or
mortgaged immovable property as schedule hereunder to the defendants.
It is further certified and ordered that if the money realised by such sale not be sufficient for payment in full of the amount payable to the Applicant
Bank as aforesaid, the applicant Bank shall be at liberty to proceed against the defendant or defendants personally for the amount to the balance.
On 19.10.2005, a notice was issued by the Recovery Officer in terms of the Recovery Certificate for recovery of a sum of Rs. 1,37,24,962.68
as per the Recovery Certificate. Thereafter on 25.10.2005, the respondents 1 and 2 filed M.A. Nos. 295 to 297 of 2005 in O.A. No. 450 of
2000.
(i) M.A. No. 295 of 2005 has been filed for condonation of delay of 320 days in filing the petition for extension of time in payment of the agreed
amount covered under Lok Adalat order dated 10.9.2004 passed in O.A. No. 450 of 2000.
(ii) M.A. No. 296 of 2005 has been filed praying to extend the time to comply with the order of Lok Adalat dated 10.9.2004 passed in O.A. No.
450 of 2000.
(iii) M.A. No. 297 of 2005 has been filed praying to stay the Recovery Proceedings under DRC No. 92/2005-RO-II in O.A. No. 450 of 2000.
On 14.11.2005, an order of attachment was passed by the Recovery Officer in respect of the lands which were the subject matter of equitable
mortgage by deposit of title deeds. On 16.11.2005, respondents 1 and 2 filed M.A. No. 311 of 2005 praying to recall the Recovery Certificate
DRC No. 92/2005 RO-II and withdraw the same. On 18.11.2005 respondent 1 and 2 filed a memo for advancing the date of hearing before the
Debt Recovery Tribunal from 21.11.2005 to 18.11.2005, such memo was rejected and the matter was posted for hearing on 21.11.2005.
Aggrieved by the order rejecting the memo for advancing the hearing, appeal M.A. No. 191 of 2005 was filed before the Debt Recovery
Appellate Tribunal and interim orders were passed directing the present respondents 1 and 2 to deposit the entire amount as determined by the
Lok Adalat, less Rs. 3 lakhs already deposited. A sum of Rs. 31.5 lakhs was deposited on 19.12.2005 recorded by memo dated 21.12.2005.
Further on 3.8.2006, the Debt Recovery Appellate Tribunal passed the following order in M.A. No. 191 of 2005:
During the pendency of the appeal, the appellants have represented that the matter was settled in Lok Adalat held on 10.9.2004 for Rs. 34.5
lakhs and they could not pay the amount in time, as agreed. But, however, they represented that they deposited Rs. 3 lakhs on 8.2.2005. When
the matter was taken up on 13.12.2005, interim stay was granted on condition that the appellants should deposit the entire amount agreed before
the Lok Adalat i.e., Rs. 34.5 lakhs together with interest at PLR rate from 10.9.2004 till that date less Rs. 3 lakhs, and the appellants have filed a
memo on 21.12.2005 stating that they have deposited the said amount. Both the parties were directed to settle the matter. But, now, it turns out
that the matter is not settled. The appellants were directed to deposit the amount with the respondent bank, with a hope that the matter could be
settled. But, now, the respondent bank states that the matter cannot be settled for the said amount, and therefore, the settlement could not be
arrived at.
In the above said circumstances, the respondent bank is hereby directed to return the amount deposited by the appellants on 19.12.2005.
Interim stay granted, shall continue for two weeks from today. The appellants are at liberty to move the DRI-I, Chennai for settlement.
On 9.10.2006 auction sale notice was issued by the Recovery Officer, DRT-I, Chennai. On 11.10.2006, M.A. No. 295 of 2005 filed for
condonation of delay was dismissed by DRT-I, Chennai. The main reason for rejecting the M.A. No. 295 of 2005 is on the ground of delay,
laches and lack of bona fides holding that respondents 1 and 2 did not pay the agreed amount in time and there is no valid reason for condonation
of delay.
Aggrieved by the order of the Debts Recovery Tribunal, Chennai, dismissing the M.A. No. 295 of 2005 in O.A. No. 450 of 2000 for
condonation of delay, the appeal M.A. No. 203 of 2006 was filed on 16.10.2006 before the Debts Recovery Appellate Tribunal. Interim stay
was granted on 17.10.2006, on condition, respondents 1 and 2 herein depositing a sum of Rs. 38 lakhs. On 29.10.2006, a sum of Rs. 3 lakhs
was deposited by the respondents 1 and 2 herein to the petitioner bank. The appeal was disposed off holding that the Debt Recovery Tribunal
should have considered the application seeking extension of time instead of dismissing the Miscellaneous Application No. 295 of 2005 filed for
condonation of delay. The Appellate Tribunal also observed that the other applications were kept pending and the condone delay application alone
was taken up and was dismissed. To meet the ends of justice, holding that Tribunal had the power to extend time, the appeal was allowed. The
application seeking extension of time, which was pending, was also allowed.
On consideration of all the above stated factual position, the Debts Recovery Appellate Tribunal passed the order on 30.11.2006 allowing the
appeal, as follows:
(1) The respondent bank is hereby directed to furnish the statement of account to the appellants within 15 days from the date of receipt of copy of
this order, calculating the interest at its PLR rate on Rs. 34.5 lakhs, the amount awarded by the Lok Adalat from 10.12.2004 upto 30.11.2006,
after giving credit to a sum of Rs. 38 lakhs already deposited by the appellants with the respondent bank.
(2) The appellants are directed to pay the balance amount within a month''s time from the date of receipt of the statement of account from the
respondent bank.
(3) Failing which, the respondent bank is entitled to recover the balance amount together with interest at 12% p.a. simple from 1.12.2006 till the
date of realisation.
Aggrieved against the above said order of the Debt Recovery Appellate Tribunal, the present writ petition has been filed by the petitioner bank.
The main contentions raised in the writ petition and by the learned Counsel for petitioner is as follows:
(i) that the Debt Recovery Tribunal dismissed the petition for cononation of delay on the ground of delay and laches and that the plea of
respondents 1 and 2 lacked bona fides. Such finding is not rejected by the Debt Recovery Appellate Tribunal and therefore, the Appellate Tribunal
ought to have dismissed the appeal,
(ii) that the third respondent Debts Recovery Appellate Tribunal has no authority or power to modify the terms of the contract between the parties,
(iii) that the Debts Recovery Appellate Tribunal ought to have dismissed the appeal filed by the respondents 1 and 2 on the ground that they had
participated in the Lok Adalat and failed to show sufficient cause to condone the delay,
(iv) that as per Section 21(2) of the Legal Services Authority Act every Award made by Lok Adalat shall be final and binding on all the parties to
the dispute and no appeal shall lie to any Court against the Award,
(v) that the Court cannot interpose its authority u/s 148 CPC to extend the time agreed upon between the parties to the settlement and
(vi) that the Debts Recovery Tribunal has no locus standi to extend the time or period of payment u/s 22 of the DRT Act read with Rule 18 of the
DRT Rules or any other law that too without the consent of the parties.
Petitioner bank, therefore, contended that the impugned order dated 30.11.2006 passed by the Debts Recovery Appellate Tribunal should be set
aside as without jurisdiction and contrary to law.
According to the respondents 1 and 2, the Recovery Certificate dated 18.10.2005 is an illegal order and passed without any adjudication and
without notice to the respondents 1 and 2. Learned Counsel for the respondents 1 and 2 referred to the affidavit dated 25.10.2005 filed in support
of M.A. Nos. 295 to 297 of 2005. The contention as stated by the respondents 1 and 2 is extracted hereunder:
No further adjudication are found in the Case File and I am put to confusion that without an Order by the Presiding Officer, how a Recovery
Certificate be issued not upon the Order of compromise but upon the actual claim made in the Main O.A. It is also respectfully submitted before
this Hon''ble Tribunal that in the verdict of the Lok Adalat it is also mutually agreed between the parties that if the petitioner herein fails to pay the
amount, then the respondent Bank can claim the entire claim amount as per the Main O.A. and not that the respondent bank can recover the O.A.
covered amount whileso if at all the respondent Bank has to recover the O.A. covered amount, this Hon''ble Tribunal ought to have provided
sufficient opportunity to be heard to this Applicants before issuing any Recovery Certificate since the matter was referred to Lok Adalat at the time
of marking of documents by the Applicant Bank and no opportunity on merits were given to us. It is also pertinent to note that the Order copy
passed by this Hon''ble Tribunal on 10.09.2004 and the issual of Recovery Certificate Order if any passed on 18.10.2005 were not
communicated as contemplated in Section 19(21) of Debt Recovery Act.
Therefore, counsel for respondents 1 and 2 contended that there was no adjudication of the claim on merits. If at all the petitioner bank is
entitled to recover, it is only the amount specified in the Lok Adalat award which is confirmed by the Debt Recovery Tribunal on the same day
(i.e.) 9.10.2004. The learned Counsel for the respondents 1 and 2 referred to the terms of the award stated that in the event of the amount as
specified in the Lok Adalat is not satisfied, the bank is entitled to claim as per Original Application. Therefore, in default, adjudication on merits
should have been done. It is also contended that the Tribunal has got the power to extend the time granted by the Lok Adalat and in the present
case, the Bank has agreed to extend the time on more than one occasion in the month of January, 2005. The Debt Recovery Tribunal has
dismissed the petition filed for condonation of delay by misreading the terms of the award of the Lok Adalat and without considering the prima
facie case and bona fide plea for extension of time.
The Appellate Tribunal, however, by applying the ratio of the Supreme Court in the case of P.T. Thomas Vs. Thomas Job, held that the
respondents 1 and 2 have come forward to pay the amount as per the award together with interest at the PLR rate and also deposited Rs. 38
lakhs with the petitioner bank proving their bona fides, granted extension of time and allowed the appeal. Counsel for respondents 1 and 2
submitted that the order of the Debts Recovery Appellate Tribunal is in the facts and circumstances of the case is valid in law and the writ petition
should be dismissed.
The appellate Tribunal relying upon the Apex Court''s decision in P.T. Thomas Vs. Thomas Job, , held that the Tribunal in this case is
empowered to extend the time granted as agreed to by the parties before the Lok Adalat. The conclusion of the appellate Tribunal is based on the
factual events that happened in this case, which is found in paragraph 10 of the order impugned, and is set out herender:
On a careful consideration of the rival submissions, it is made out that the award was passed by the Lok Adalat on 10.9.2004 granting time to
the appellants till 10.12.2004 to pay the amount. The appellants did not pay the amount within the time stipulated in the award. But, however, it
appears that at the request of the appellants, the respondent bank had extended the time to pay the amount upto 20.1.2005. Even by that time, the
appellants were not able to pay the entire amount. But part payment of Rs. 3 lakhs was paid on 8.2.2005. Thereafter, the appellants have filed the
application before the DRT for extension of time to pay the amount. The appellants were under the mistaken impression that they have to file an
application to condone the delay in filing the application for extension of time. But, no such application need be filed. It is suffice if an application is
filed for the enlargement of time. The prayer for extension of time is akin to Section 148 in Code of Civil Procedure, which reads, ""Where any
period is fixed or granted by the Court for the doing of any act prescribed or allowed by this Code, the Court may, in its discretion, from time to
time, enlarge such period, even though the period originally fixed or granted may have expired."" As such, it is evident that the court has got an
inherent power to enlarge the time, which was fixed or granted by the Court. In this connection, it will be useful to refer the decision in the case of
Smt. Periyakkal and Others Vs. Smt. Dakshyani, , wherein it was held, ""4. In the case before us, the situation is totally different. Unlike the case of
Hukamchand Vs. Bansilal and Others, where there was a statutory compulsion to confirm the sale on the dismissal of the application under Order
XXI Rule 90 and, therefore, postponement and further postponement of the confirmation of the sale could only be by the consent of the parties, in
the case before us, there was no statutory compulsion to dismiss the application under Order XXI Rule 90 in the absence of an agreement
between the parties.... The time for deposit stipulated by the parties became the time allowed by the Court and this gave the Court the jurisdiction
to extend time in appropriate cases. Of course, time would not be extended ordinarily, nor for the mere asking. It would be granted in rare cases
to prevent manifest injustice."" The time agreed and granted by the Lok Adalat is not under any statute. The time prescribed under any statute alone
could not be extended even by consent of parties. But, when no time is prescribed under the statute, the Court has got discretion and jurisdiction
to enlarge the time in appropriate cases. In the case on our hand, the time was granted by the Lok Adalat and not under any statute. As such, the
Tribunal has got power to enlarge the time in appropriate cases. The compromise arrived at between the parties and the labour taken by the Lok
Adalat in passing the award cannot be frustrated or neutralized merely on certain lapses on the part of the appellants, as they could not pay the
amount within the given period. In fact, the bank itself granted time to pay the amount beyond the time fixed in Lok Adalat, and as such, there is
nothing to fetter the hands of the Courts/Tribunal to enlarge the time, to ensure the ends of justice. Applying the ratio decidendi of P.T. Thomas Vs.
Thomas Job, , I come to the conclusion that the Tribunals are empowered to extend the time granted in the Lok Adalat.
Thereafter, the appellate Tribunal proceeded to consider the claim for extension of time accepting the plea of respondents 1 and 2 and it was
allowed. In this case, the Lok Adalat passed an award on 10.9.2004 and the respondents 1 and 2 were given time upto 10.12.2004 to pay the
amount as per the Lok Adalat award with P.L.R. interest. The appellate Tribunal held that the respondents 1 and 2 cannot be penalized for non-
payment of the amount as determined by the Lok Adalat, which has been agreed to by the parties. While coming to this conclusion, the Appellate
Tribunal was of the view that if there was default by respondents 1 and 2, the bank''s right was to make the claim in the Original Application for the
entire amount.
The learned Counsel for petitioner bank relied on several decisions to state that when there is a consent between parties and a decree has been
passed in terms of the compromise entered into by the parties, Court cannot extend such time. Much emphasize is placed on the decision of the
Apex Court in Hukamchand Vs. Bansilal and Others, . In Smt. Periyakkal and Others Vs. Smt. Dakshyani, , the Apex Court held that the Court
has got power to extend time and on facts, the case in Hukumchand 1968 SC 86 (cited supra) was distinguished in Periyakkal''s case. In Smt.
Periyakkal and Others Vs. Smt. Dakshyani, , the Apex Court held in paras 3 and 4 as follows:
In Hukamchand Vs. Bansilal and Others, the real question which was considered was, if a mortgaged property was sold in execution of a
mortgage decree and if the application to set aside the sale under Order 21 rule 90 was dismissed but time was granted by consent of parties for
depositing the decretal amount etc., could time be extended for depositing the decretal amount etc., to avert the confirmation of sale, under Order
34 Rule 5, except with the consent of the parties. The answer was ''no''. The Court said on the dismissal of an application under Order 21 Rule 90,
confirmation of sale under Order 21, Rule 92 had to follow as a matter of course. Order 34, Rule 5 merely permitted the deposit to be made at
any time before the confirmation of the sale and there could be no question of extending the time for such deposit. If parties agreed to have the
confirmation of sale postponed, further postponement would be possible by agreement of parties only. The Court would have no say in the matter.
Section 148 C.P.C. would have no application. The position was clarified by the Court thus (para 8):
The judgment-debtor mortgagor had the right to deposit the amount at any time before confirmation of sale within 30 days after the sale or even
more than 30 days after the sale under Order XXXIV, Rule 5(1) so long as the sale was not confirmed. If the amount had been deposited before
the confirmation of sale, the judgment-debtors had the right to ask for an order in terms of Order XXXIV Rule 5(1) in their favour. In this case an
application under Order XXI Rule 90 had been made and, therefore, the sale could not be confirmed immediately after 30 days which would be
the normal course; the confirmation had to await the disposal of the application under Order XXI, Rule 90. That application was disposed of on
October 7, 1958 and was dismissed. It is obvious from the order sheet of October 7, 1958 that an oral compromise was arrived at between the
parties in Court on that day. By that compromise time was granted to the respondents to deposit the entire amount due to the decree-holder and
the auction-purchaser by November 21, 1958. Obviously, the basis of the compromise was that the respondents withdrew their application under
Order XXI, Rule 90 while the decree-holder society and the auction-purchaser appellant agreed that time might be given to deposit the amount
upto November 21, 1958. If this agreement had not been arrived at and if the application under Order XXI, Rule 90 had been dismissed (for
example, on merits) on October 7, 1958, he Court was bound under Order XXI, Rule 92(1) to confirm the sale at once. But because of the
compromise between the parties by which the respondents were given time upto November 21, 1958 the Court rightly postponed the question of
confirmation of sale till that date by consent of parties. But the fact remains that the application under Order XXI, Rule 90 had been dismissed on
October 7, 1958, and thereafter, the Court was bound to confirm the sale but for the compromise between the parties giving time upto November
21, 1958.
The Court then referred to the refusal of the Court to extend time by a fortnight on November 22, 1958 and further observed (para 9):
The executing court refused that holding that time upto November 21, 1958, had been granted by consent and it was no longer open to it to
extend that time. The executing Court has not referred to Order XXI, Rule 92 in its order, but it is obvious that the executing Court held that it
could not grant time in the absence of an agreement between the parties, because Order XXI, Rule 92 required that as the application under Order
XXI, Rule 90 had been dismissed the sale must be confirmed. We are of the view that in the circumstances it was not open to the executing Court
to extend time without consent of parties, for time between October 7, 1958 to November 21, 1958 was granted by consent of parties. Section
148 of the CPC would not apply in these circumstances and the executing Court was right in holding that it could not extend time. Therefore, it
rightly confirmed the sale as required under Order XXI, Rule 92 there being no question of the application of Order XXXIV, Rule 5 for the money
had not been deposited on November 22, 1958 before the order of confirmation was passed. In this view of the matter, we are of opinion that the
order of the executing Court refusing grant of time and confirming the sale was correct.
In the case before us, the situation is totally different. Unlike the case of Hukamchand Vs. Bansilal and Others, where there was a statutory
compulsion to confirm the sale on the dismissal of the application under Order XXI Rule 90 and, therefore, postponement and further
postponement of the confirmation of the sale could only be by the consent of the parties, in the case before us, there was no statutory compulsion
to dismiss the application under Order XXI, Rule 90 in the absence of an agreement between the parties. The Court would have then decided the
appeal arising out of the application on the merits. The parties, however, entered into a compromise and invited the Court to make an order in
terms of the compromise, which the Court did. The time for deposit stipulated by the parties became the time allowed by the Court and this gave
the Court the jurisdiction to extend time in appropriate cases. Of course, time would not be extended ordinarily, nor for the mere asking. It would
be granted in rare cases to prevent manifest injustice. True, the Court would not rewrite a contract between the parties but the Court would relieve
against a forfeiture clause; And, where the contract of the parties has merged in the order of the Court, the Court''s freedom to act to further the
ends of justice would surely not stand curtailed. Nothing said in Hukamchand''s case militates against this view. We are, therefore, of the view that
the High Court was in error in thinking that they had no power to extend time. Even so, Shri Jawali submitted that this was not an appropriate case
for granting any extension of time. We desire to express no opinion on that question. The High Court will decide that question. We accordingly, set
aside the judgment dated 15th January, 1979 of the High Court and direct the High Court to dispose of I.A. No. VII in Execution Second Appeal
No. 89/74 afresh in accordance with law. The parties will bear their own costs.
It is apparent from the above decision of the Apex Court in Smt. Periyakkal and Others Vs. Smt. Dakshyani, that time can be extended by the
Court invoking the power u/s 148 C.P.C. on the facts and circumstances of the case and if there is no statutory compulsion not to extend time.
There is no statutory restraint in this case. In this case, time fixed before Lok Adalat was extended by consent between parties. The Apex Court in
P.T. Thomas case and Periyakkal''s case (cited supra) held that time can be extended in appropriate cases by the Court and the said decision will
apply to the present case. The decision of the Apex Court in Hukamchand Vs. Bansilal and Others, , was distinguished on facts.
The Lok Adalath award settling the case between the petitioner bank and the respondents 1 and 2 was passed on 9.10.2004. Immediately
thereafter, the Debt Recovery Tribunal passed a detailed order on the same day (i.e.) on 9.10.2004 recording the award of the Lok Adalat. In this
order, it is stated that the Original Application is finally disposed off and the final order is passed strictly in terms and conditions contained in the
memo of compromise and as per the award of the Lok Adalat. It is further recorded that in case of default or if deemed necessary, the Recovery
Certificate be prepared and issued as per the terms of compromise and the award passed by the Lok Adalat. This order was not challenged.
However, respondents 1 and 2 approached the bank for extension of time by letter dated 8.12.2004 and time was extended upto 21.1.2005. The
respondents 1 and 2 however, paid a sum of Rs. 3 lakhs on 8.2.2005. Thereafter, there is a stalemate and after more than 8 months at the request
of the bank, the Recovery Certificate was issued for a sum of Rs. 1,37,24,962/- which includes the principle, interest and cost as per the claim in
Original Application. Thereafter, notice was issued by the Recovery Officer on 19.10.2005.
Respondents 1 and 2 at this point of time filed M.A. Nos. 295 to 297 of 2005 after almost 10 months from the last date as per the Lok Adalat
Award and 8 months after making the payment of Rs. 3 lakhs on 8.2.2005 as against Rs. 34.5 lakhs payable. On 16.11.2005, M.A. No. 311 of
2005 was filed to recall the Recovery Certificate DRC No. 92/2005 issued by the Debt Recovery Tribunal. Respondents 1 and 2 filed M.A. No.
191 of 2005 for early hearing which was rejected. As against the same, in the first round of appeal to the Debt Recovery Appellate Tribunal stay
was granted on condition that a sum of Rs. 34.5 Lakhs as per the Lok Adalat Award should be deposited by the respondents 1 and 2 herein less
the amount of Rs. 3 lakhs. No doubt on 19.12.2005 the said amount of Rs. 31.5 Lakhs was deposited less the Rs. 3 lakhs already in deposit. This
is recorded by memo dated 21.12.2005. This is almost a year after the date agreed to between the parties before the Lok Adalat. In effect, the
respondents 1 and 2 deposited the said amount as agreed before the Lok Adalat after lapse of one year from the date of the order of the Debt
Recovery Tribunal. Since the bank did not agree for such settlement as recorded by the Debt Recovery Appellate Tribunal in its order dated
3.8.2006, the bank returned the amount. On 9.10.2006 auction sale notice was issued by the Recovery Officer of the Debt Recovery Tribunal.
In this background of the case on 11.10.2006, M.A. No. 295 of 2005 filed for condonation of delay of 320 days in filing the petition seeking
extension of time for the payment of the agreed amount covered under the Lok Adalat, was dismissed by the Debt Recovery Tribunal. The main
reason given by the Debt Recovery Tribunal for rejecting the plea of the respondents 1 and 2 was that inspite of sufficient time given to them,
respondents 1 and 2 failed to make the payment as agreed before the Lok Adalat and also within the time extended. The Tribunal also went into
the plea with regard to condonation of delay as per the statement on affidavit and pleadings and found that the petition was filed only by the
respondent No. 2 on the ground of the alleged illness. The first respondent, who was also a party to the claim has not given any good reason for
the delay. The Tribunal, further, held that the petition filed for extension of time was not within the period specified and agreed to by the parties
before the Lok Adalat. In view of the conduct of the respondents 1 and 2, the Tribunal held that the petition for condonaton of delay of 320 days
in filing the petition for extension of time was not bona fide and was intended to drag on the proceedings. The Tribunal, further, held that even if it is
accepted that the Court or the Tribunal has power to extend time as per the Award of the Lok Adalat, the reasons given in the affidavit filed by the
second respondent are not valid and good enough to condone the long delay. In para 16 of the order dated 11.10.2006 of the Debt Recovery
Tribunal is as follows:
Further, it is found, no proper explanation has been given by the first applicant to condone the long delay of 320 days in filing the petition for
extension of time to pay the agreed amount. Further more, it is found that this petition, as such, is found to be without any merit. Further more, it is
found that to meet the ends of justice also, the long delay of 320 days cannot be condoned, as sufficient cause is not shown to condone the delay
by the applicants. The applicants have not established valid and sustainable grounds, to condone the long delay in filing this petition. The
explanation offered by the applicants is not cogent and it is also found that applicants are not diligent and not disclosed sufficient cause towards
exercise of discretion by this Tribunal, to condone the delay of 320 days. The applicants have not properly explained the long delay in filing this
petition. The inordinate delay of 320 days, has not been properly explained by the applicants. The applicants have not shown any sufficient reason
or valid ground, to show that they were prevented from filing this petition, in time.
The Debt Recovery Appellate Tribunal, on the contrary, recording the interim orders passed by the Appellate Tribunal and the payments made
by the respondents 1 and 2 on the basis of the interim orders of the Appellate Tribunal and the deposit made by the respondents 1 and 2 after
more than one year, held that the respondents 1 and 2 have complied with the order and showed their bona fides. The Appellate Tribunal held that
the balance of convenience is in favour of the respondents 1 and 2 as they are ready and willing to pay the amounts as agreed to before the Lok
Adalat with interest. The Appellate Tribunal rejected the plea of the petitioner bank stating that if the respondents 1 and 2 failed to pay the amount
as agreed to before the Lok Adalat, the petitioner bank is at liberty to claim the entire amount as per the Original Application. Just because the
respondents 1 and 2 herein have committed default in payment of amount, as per the Award of the Lok Adalat, they cannot be penalised as it is
agreed to in the Lok Adalat. Therefore, the Appellate Tribunal recording the deposit of Rs. 38 lakhs as per the interim order of the Appellate
Tribunal granted the relief extending the time for payment in term of the award of the Lok Adalat. In result, the application for condonation of delay
of 320 days, which was dismissed by the Debt Recovery Tribunal, was also allowed and the time was extended as sought for by the respondents
1 and 2 in the M.A. No. 296 of 2005, which is pending before the Tribunal.
The respondents 1 and 2 have to establish a case of bona fide claim for condonation of delay and for extension of time and to what relief. In
the present case, the plea of the petitioner bank to set aside the order of the Appellate Tribunal can be justified only on account of the conduct of
the respondents 1 and 2 and for the following reasons.
The award in this case was passed on 9.10.2004 by the Lok Adalat and the time for complying with the award was fixed as December, 2004.
Even assuming that the petitioner bank had extended the time, it was only upto the month of January, 2005. Thereafter, the respondents 1 and 2 on
a payment of Rs. 3 lakhs did not take further steps to settle the balance amount. It is only on the issuance of Recovery Certificate and the notice
dated 19.10.2005 by the Recovery Officer, after nearly 10 months that respondents 1 and 2 rushed to the Debt Recovery Tribunal and filed M.A.
Nos. 295 to 297 of 2005. It is pertinent to point out that an order of the Debt Recovery Tribunal dated 9.10.2004 was passed immediately after
the award of the Lok Adalat. Respondents 1 and 2 did not challenge the order in the manner known to law. But an application M.A. No. 311 of
2005 was filed on 16.11.2005 to recall the Debt Recovery Certificate. This application is after a long period of time.
In this background it is apparent that respondents 1 and 2 woke up only after the bank started proceedings for recovery. The application M.A.
No. 295 of 2005 was filed for condonation of delay after more than 10 months, seeking extension of time. It does not appear to be a bona fide
exercise on the part of the respondents 1 and 2. It is stated in the affidavit that the delay was on account of illness of second respondent. The Debt
Recovery Tribunal has rejected such plea as one without basis and without bona fides and the delay is not properly explained. The respondents 1
and 2 have not challenged the order of Debt Recovery Tribunal dated 9.10.2004. Even M.A. No. 311 of 2005 has been filed only for recall of the
Recovery Certificate. This is because the respondents 1 and 2 are bound by the terms of the Award of the Lok Adalat and there is a bar u/s 21(2)
of the Legal Services Authority Act. In terms of Section 21 of the Legal Services Authority Act, every award made by the Lok Adalat shall be
final and binding on all the parties to the dispute and no appeal shall lie challenging the Award. The respondents 1 and 2 have not shown any just
and reasonable cause for the inordinate delay and they have not filed application seeking extension of time within the time limit specified in the
Award or within the date as has been mutually agreed to by parties and in any event, the delay has not been reasonably explained and the Tribunal
has discussed it in detail and rejected the plea of respondents 1 and 2. The Appellate Tribunal has not differed on this view and we find no
justification to take a different view with regard to the lack of bona fides on the part of respondents 1 and 2 and on delay and laches as well.
In this case, the application for extension of time has been filed after more than 10 months from the date of Lok Adalat Award and 8 months
after the time agreed by the parties and this is to the knowledge of the respondents 1 and 2. When there is delay and laches, Courts will be loath to
come to the aid of such person (see Bhoop Singh Vs. Union of India and others, . Courts are over burdened with litigation and litigants cannot be
allowed to file application at their sweet will and pleasure and plead for Courts indulgence. When a person is not vigilant of his right and acquiesces
with the situation, the Courts will be very cautious in granting the relief (see Chairman, U.P. Jal Nigam and Another Vs. Jaswant Singh and
Another, and A.P. Steel Re-Rolling Mill Ltd. Vs. State of Kerala and Others, . The bank agreed for one time settlement in a sum of Rs. 34.5
lakhs, eventhough the claim in Original Application is approximately Rs. 62 lakhs with interest. This was agreed to by both parties to put an end to
litigation. Even then, respondents 1 and 2 did not pay the amount within the agreed time, viz., December, 2004. They sought for extension of time
and the bank granted it on two occasions. Even then, a sum of Rs. 3 lakhs alone was deposited and thereafter, respondents 1 and 2 kept quiet.
The bank to break the impasse and having no other way out, proceeded to get the recovery certificate as per the Debt Recovery Tribunal order
dated 10.9.2004 and it is only thereafter that respondents 1 and 2 started filing applications on 25.10.2005 after much delay as stated above. This
conduct of respondents 1 and 2 clearly establishes their gross negligence in agitating their rights. They showed no diligence in pursuing the matter.
There is nothing to show their intention to pay the amount agreed within time limit specified in the Lok Adalat Award or any time thereafter till the
recovery certificate was issued except the token deposit of Rs. 3 lakhs. The further deposit in this case was made as a condition precedent for stay
granted by the Appellate Tribunal and not when the applications were filed for condonation of delay and for extension of time. The Appellate
Tribunal showed indulgence to the reluctant borrower and it is after the order of attachment that further amount was paid. Therefore, even under
equity, the plea of the respondents 1 and 2 for condonation of delay and extension of time is not justified. The decisions of the Apex Court in P.T.
Thomas case also lays emphasis on the finality award of the Lok Adalat. No doubt, Court has power to extend time in appropriate case but that
cannot be done in the present case in view of the delay and laches and the conduct on the part of the respondents 1 and 2 which lacks bona fides.
The Apex Court in Smt. Periyakkal and Others Vs. Smt. Dakshyani, clearly held,
Of course, time would not be extended ordinarily, nor for the mere asking. It would be granted in rare cases to prevent manifest injustice. True, the
Court would not rewrite a contract between the parties but the Court would relieve against a forfeiture clause
All that the Apex Court held was that the power of the Court is not curtailed. However, in the instant case, we find that the order of the Debt
Recovery Appellate Tribunal granting extension of time was unwarranted and uncalled for and should have rejected it only on account of delay and
laches. The Debt Recover Tribunal rightly rejected it on merits and superior Court normally do not interfere with such finding and we find no good
reason to do so.
For the aforesaid reasons, the Writ Petition is allowed, the order of the Debt Recovery Appellate Tribunal is set aside. Consequently,
connected miscellaneous petition is closed.