Jagjit Singh vs Asset Reconstruction Co. (India) Ltd. And Ors.

Ranjit Singh, J

State Bank of Saurashtra had filed this O.A. against the appellant for recovery of a sum of Rs. 2,95,33,244/-. Later, the Bank assigned the debt/security interest to Asset Reconstruction Co. (India) Ltd. (ARCIL). In the impugned order it is noticed that the assignee company is substituted as applicant. The O.A., thereafter came to be dismissed for default on 5.4.2010 and was restored on 6.11.2013 on the basis of M.A. No. 128/2013 filed by the respondent reconstruction company. The Tribunal ultimately has allowed the O.A. holding the reconstruction company (ARCIL) entitled to recover a sum of Rs. 2,95,33,244/- along with simple interest @ 18.5% p.a. from 1.2.1999 onwards until recovery with cost from appellant and respondent No. 2 jointly and severally. Aggrieved against the same, the appellant Mr. Jagjit Singh has filed the present appeal. There was a delay of 12 days in filing this appeal, which was condoned by this Tribunal on 12.11.2015. Thereafter, the case was adjourned for considering the application seeking waiver of the requirement of pre-deposit, During the course of arguments it was pointed out before the Tribunal that ARCIL had not been substituted in place of the Bank which had filed the O.A.

When confronted with this position, Counsel for the ARCIL had prayed for time to show order vide which ARCIL was substituted in place of the Bank. On 9.12.2015, Counsel for ARCIL came up with application for being impleaded as party as the Counsel was unable to find any order passed for substitution of ARCIL in the O.A. decided by the Tribunal below. In this application, it is averred that there is no order available substituting ARCIL in place of State Bank of Saurashtra. An application was accordingly filed by the respondent ARCIL for being substituted in place of the Bank. Notice of this application was issued, which was accepted by the Counsel for the appellant, who prayed for time to file reply. Despite opportunity, no reply to the application has been filed.

I have not been able to understand as to how the Tribunal below has allowed the claim in favour of respondent ARCIL without substituting ARCIL in place of the Bank who had filed the O.A. If ARCIL had not been substituted in place of the Bank, obviously, it could not be taken as party in the O.A.

In fact, this issue had come up before this Tribunal earlier also when it was revealed that substitution application filed by ARCIL was dismissed on 5.4.2010 in default of the Bank and the assignee company. An application (M.A. No. 55/2010) was filed by the assignee company for restoration of the said application, but the said application also came to be dismissed on 4.3.2011. It was also noticed that the assignee company had then filed M.A. No. 65/2012 for setting aside the order dated 4.4.2012, which was allowed by the Tribunal below on 3.6.2012 and thereafter M.A. No. 128/2013 was filed for restoration of the O.A., which was allowed by the order dated 6.11.2013. This order was impugned by the appellant by filing a miscellaneous appeal (No. 10/2014) in which this Tribunal had issued notice to the respondent. At that stage, this Tribunal had noticed that the appellant had not impleaded ARCIL as party in the said appeal whereas the order impugned was made on its application. Finding that ARCIL was a necessary party in this appeal, the appellant was directed to implead ARCIL as respondent and file amended memo of parties impleading State Bank of Saurashtra and ARCIL as parties in the appeal separately.

While issuing notice in the said appeal, this Tribunal gave liberty to the appellant to request the Tribunal below for adjourning the case pending before it. The appellant then filed an application praying stay of O.A. proceedings till the disposal of the Miscellaneous Appeal No. 10/2014. It is alleged that the Tribunal never took up this application for consideration, but adjourned the matter two or three times. Thereafter, the Tribunal below refused to grant further adjournment and fixed the case for passing final order without deciding the application for stay. In this background, the Tribunal below has passed the order on 10.10.2014 without considering the application for stay filed by the appellant. The appeal filed by the appellant was dismissed by this Tribunal on 26.11.2014. This Tribunal found that appeal had become infructuous due to the passing of the final order by the Tribunal below. It is in this background that the appellant has filed the present appeal to impugn the final order passed by the Tribunal below.

Once the appellant was directed to implead ARCIL as well as the Bank in the Miscellaneous Appeal No. 10/2014 filed before this Tribunal, the issue whether ARCIL stood substituted in place of the Bank apparently would be rendered meaningless. The fact remains, however, that there is no order passed by the Tribunal below for substituting ARCIL in place of the Bank which had filed the O.A. It would be appropriate if a proper order is passed on the application filed by ARCIL seeking its substitution in place of the Bank when the debt/security interest stand assigned to ARCIL. An application for substitution of ARCIL had been filed before the Tribunal below. It seems that it has escaped notice of the Tribunal and no order is passed on this application. The Tribunal below has taken the ARCIL as a party without allowing its substitution. The prayer for being impleaded before this Tribunal could have been maintainable if the order had been passed in favour of the Bank, Since without substituting ARCIL the Tribunal has passed an order taking ARCIL as party, it would be appropriate to remand the case back to the Tribunal to pass a proper order on the application filed by the ARCIL for its substitution in place of the Bank. To be fair to the Counsel for the appellant, he has raised objection to ARCIL being substituted in the O.A. in place of the Bank, but was unable to substantiate the same except for stating that the provision quoted in the application would not be applicable to consider the prayer of ARCIL. Counsel for the appellant has failed to appreciate that procedural provisions are handmaid to justice and cannot be allowed to override the cause of justice. If the debt/security interest have been assigned to ARCIL, which course is permissible even in terms of the procedural law, the objection to ARCIL being substituted in place of the Bank is really without substance. It would, however, be appropriate that a proper order is passed on the application filed by ARCIL for being substituted. For this purpose, the case is remitted back to the Tribunal below for passing an order on the application filed by ARCIL seeking its substitution in place of State Bank of Saurashtra. The Tribunal below will consider and pass an appropriate order on the prayer of ARCIL for its substitution. Parties through their Counsel are directed to appear before the Tribunal below on 21.3.2016 for this purpose. After passing the order, the Tribunal shall send the case back to this Tribunal for further dealing with the appeal. This appeal filed by the appellant is adjourned sine die to be taken up after receipt of the order on the pending application filed by ARCIL for its impleadment in place of the Bank.