Praveen Dang And Ors vs Bank Of Baroda And Ors

The appellants in these three appeals, which are going to be disposed of by this common order, are brothers but they have chosen to fight their legal battle separately against Bank of Baroda which is fighting to recover 'public money' to the tune of over twenty crores from them. The appeal is against one and the same common order dated 16.09.2020 passed by the tribunal below(DRT-I, Delhi) in the Original Application filed by the Bank of Baroda under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Áct of 1993' in short) whereby one miscellaneous application no. 691/2020 filed by Bank of Baroda in its pending O.A. was allowed.

The relevant portions of the impugned order which narrate the factual background of the case leading to the filing of present three appeals are being re-produced below:-

"IA No. 691/2020

This application has been filed on behalf of the applicant bank thereby recalling the order dated 04.02.2018 and stay the operation and effect or any other order dealing materially with the application filed vide diary no. 9988 dated 13.09.2017. In the said application, it is being stated that defendant no. 2 had died who was survived by Sh. Harish Dang as well as Sh. Praveen Dang, who happens to be defendants no. 3 & 4 in the present OA, as well as Sh. Rajendra Dang as well as Sh. Devendra Dang. As per the application, there had been two sets of defendants who were sought to be impleaded as LRs. One set comprising of two LRs being Sh. Rajendra Dang as well as Mr. Devendra Dang were nowhere in the litigations and they were strangers to the same. Rather, the defendant no. 1 filed its reply to the application wherein it was admitted the status of four individuals as the LRs of the deceased defendant no. 2. It is further prayed that the applicant bank could not come across the order dated 05.02.2018 and inadvertently, the same has as 04.02.2018 in the present been typed In fact, the defendant no. 2 had already supplied the copy of WS on 19.08.2015 and the evidence was supplied on 08.07.2016. It is further being submitted that in case the application filed vide diary no. 9988 dated 13.09.2017 is not allowed, it may cause irreparable loss and injury to the applicant and the orders which may not survive in view of the legal position, may also remain on record and no prejudice would be caused to those proposed LRs i.e. Mr. Rajendra Dang and Mr. Devendra Dang who never appeared and had actual knowledge of whatsoever.

Reply to this IA has been filed on behalf of defendant no. 1 & 2 raising preliminary objections that the present application is nothing but abuse of process of law and there is material suppression of facts. In fact, IA under Order 22 Rule 4 of CPC came to be listed on 13.09.2017 and besides that two other IAs were also listed and matter was adjourned to 01.12.2017, however, on said date Court was not held and matter was adjourned to 05.02.2018 and on that date along with applications i.e. IA No. 1605/2017, 1937/2017 and IA filed vide diary no. 9988 dated 13.09.2017 were there on record and IA filed vide diary no. 9988 was disposed-off after hearing arguments of respective counsels and defendants were directed to file affidavit that they have not inherited anything from the defendant no. 2. Thereafter, speaking order was passed, therefore, no review application can be filed under Order 47 Rule 1 of CPC read with Section 22 of the RDDB&FI Act and the present review application has been filed at belated stage, accordingly, the same is not maintainable. Further, it is also submitted that present IA is liable to be dismissed on the grounds of doctrine of res judicata.

On merits, all the paras of IA were denied and it is being submitted that the IA was rejected by virtue of dismissal of said application dated 13.09.2017, accordingly, prayed for dismissal of present application.

Heard and the record has been thoroughly perused. In the present matter, Ld. Presiding Officer of this Tribunal heard the parties concerned and 1605/2017, 1937/2017 as well as IA filed vide diary no. 9988 dated 13.09.2017, by which, the applicant herein prayed for impleadment of LRS of deceased defendant no. 2 who was stated to have been died on 27.05.2017, Order dated 05.02.2018, on IA filed vide diary no. 9988 dated 13.09.2017 is as under:-

"Heard on this application.

Ld. counsel for the defendants submits that the defendants have not inherited anything from deceased defendant no. 2, therefore, they are not require to be impleaded in the present matter. In the light of the submission of learned counsel for the defendants, the defendants are hereby directed to file an affidavit pertaining to the submissions that defendants have not inherited anything from deceased defendant no. 2. On furnishing the said affidavit by the LRs of the deceased defendant no. 2 they are hereby discharge from the present matter however during the recovery proceeding in case they are required the recovery officer may proceed against them as per law.

With the above said directions this IA is hereby disposed-off."

From the bare perusal of the above said order, it is clear that it was held that on furnishing the affidavit, the LRs of deceased defendant no. 2 were discharged, whereas Sh. Harish Dang and Sh. Praveen Dang were already arrayed herein as defendants no. 3 & 4 who were also co-directors along with defendant no.2 (since deceased). In this regard, it would be appropriate to go through Order 22 Rule 4 of CPC which is as under:

"Rule Order XXII or Code of Civil Procedure 1908 "Procedure in case or death or one of several defendants or sole defendant"

(1) Where one of two or more defendants dies and the night to sue does not sue against the surviving defendant or defendants alone, or a sole defendant or sole surviving defendant dies and the right to sue survives the Court on an application made in that behalf shall cause the legal representative of the deceased defendant to be made a part and shall proceed with the suit.

(2) Any person so made a party may make any defence appropriate to his character as legal representative of the deceased defendant.

(3) Where within the time limited by law no application s made under sub-rule (1) the suit shall abate as against the deceased defendant.

(4) The Court whenever it thinks fit, may exempt the plaintiff from the necessity or substituting the legal representatives of. any such defendant who has failed to file a written statement or who, having filed it has failed to appear and contest the suit at the hearing and Judgment may in such case be pronounced against the said defendant notwithstanding the death or such defendant and shall have the same force and effect as if it has been pronounced before death took pace.

(5) Where

(a) the plaintiff was ignorant of the death of a defendant and could not, for that reason, make an application or the substitution of the legal representative or the defendant under this rule within the period specified in the Limitation Act 1963 (36 of 1963) and the suit has, in consequence, abated, and

(b) the plaintiff applies after the expiry or the period specified therefore in the Limitation Act 1963 (36 of 1963) for setting aside the abatement and also for the admission of that application under section 5 of that Act on the ground that he had, by reason or such ignorance sufficient cause for not making the application within the period specified in the said Act the Court shall, in considering the application under the said section 5 have due regard to the fact of such ignorance, if proved.

An application for impleadment of legal heirs, vide diary no. 9988 was filed on 13.09.2017, as defendant no. 2 was expired on 27.05.2017, Admittedly, the defendants no. 3 & 4 were also LRS of defendant no. 2, who were under obligation to disclose the name of other LRs and also to arrive at conclusion for impleadment of LRs as by no stretch of imagination, it could be said that the applicant bank would easily come to know about the death of any of the defendants herein and all legal heirs. A duty was casted upon the defendant no. 3& 4 who are also legal heirs to disclose the names of the other legal heirs and to bring them on record. Apart that, on behalf of defendant no. 3 & 4 reply has been filed admitting the position of legal heirs as stated in application filed on behalf of applicant bank, wherein, it is pleaded that they have not inherited any immovable property from Mr. Hansraj Dang. On that basis, the Ld. Presiding Officer passed the above said order dated 05.02.2018. Further, in response to the order dated 05.02.2018, only Mr. Harish Dang, i.e., defendant no. 3 filed the affidavit that the defendant no.2, has not left behind any Estate. Whereas, at that stage, the Ld. Presiding Officer was supposed to look into only to the fact whether the defendant no. 3 & 4 as well as Rajinder Dang and Devendar Dang were actually legal heirs of defendant no. 2 or not and whether they can be impleaded being legal heirs of defendant no.2 i.e., Hansraj Dang. To that extent, in the order dated 05.02.2018, nothing was mentioned rather the legal heirs were directed to file affidavit that they have not inherited any property. Thus, in the above said order there is a mistake and error apparent on the face of order itself. In this context, it would be relevant to go through Section 19(25) of RDDBI Act, which is as under:

"The Tribunal may made such orders and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice."

Similarly, Section 151, CPC is relevant to mention in this context which is also as under:

"Nothing in this code shall be deemed to limit or otherwise affect the inherent powers or the court to make such orders as may be necessary or the ends of the justice or to prevent abuse of the process of the court."

From the bare perusal of the above said provisions, it is apparent that both the provisions are akin to each other and recognize the inherent power given to the Courts/Tribunal to meet the end of justice, since, it is not always possible to foresee all the possible circumstances that may arise to provide for appropriate procedure to meet those situations. Thus, to prevent abuse of the process of law, it is duty casted upon all the Courts to correct the decision, which runs counter to the law settled and it is to correct a mistake of the type inter alia inherent power under S. 151 has been conferred on the courts. Section 151 is not substantive provision, which creates or confers any power or jurisdiction on Courts. It merely recognizes the discretionary power inherent in every Court as a necessary corollary for rendering justice in accordance with law, to do what it "right" and undo what is "wrong", that is, to do all things necessary the ends of justice and prevent abuse of its process. Section 19(25) of RDDBI Act is also of same nature to that of Section 151 CPC.

Admittedly, the scope of inherent power as per Section 151 by now is fairly settled. As has been observed that the legislature is incapable of contemplating all the possible circumstances which may arise in future litigation and consequently providing the procedure for them, the Code otherwise being not exhaustive. The principle is well established that when the Code of Civil Procedure is silent regarding a procedural aspect, the inherent power can come to its aid to act 'ex debito justitiae' for doing real and substantial justice between the parties. The power under this section, therefore, relates to the matters of procedure. If the ordinary rules of procedure result in injustice and there is no other remedy, these can be broken in order to achieve the ends of justice. The section, otherwise, has been held not to confer any power, but is legislated to indicate that there is power to make such order as may be necessary for achieving the ends of justice and also to prevent abuse of process of the Court. As is observed by the Hon'ble Supreme Court in Raj Bahadur Ras Raja w. Seth Hliralal, 196(SLT Soft) 185 : AIR 1962 SC 527 the inherent power having been conferred on the Courts would itself a power in the Court by virtue of its duty to do justice between the parties before it.

Viewed in this background, the provision of Section 19(25) of the RDDBFI Act is ample power to this Tribunal to do justice between the parties. From the perusal of the above said order dated 05.02.2018, the main issue whether all the legal heirs are to be impleaded to represent defendant no.2(deceased) or not. Admittedly, Hansraj Dang defendant no.2 died leaving behind four legal heirs, therefore, they are to be impleaded as legal heirs/legal representatives of defendant no.2 and state whether they have inherited anything or not has to be seen only after giving opportunity to the applicant bank to verify the said fact. In the present matter, the defendant no. 2 has already filed the WS on 19.08.2015, therefore, LRs were not supposed to file separate Ws further except to the extent of impleadment them as LRS of deceased defendant no. 2. Therefore, exercising the inherent power in order to secure end of justice in accordance with law, the order dated 05.02.2018 stands modified to the extent that the all the legal heirs of the defendant no.2 be arrayed as his legal heirs/legal representative.

Resultantly, the present application i.e. I.A No. 691/2020 stands allowed and order dated 05.02.2018 stands modified to the extent that the LRs of defendant no. 2 be impleaded as Legal heirs/legal representative, of deceased defendant no. 2. Accordingly, Amended Memo of parties shall be filed by the applicant bank which shall be kept by the Registry of this Tribunal on top of Part-I of this case file.

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Now, matter stands adjourned for Notice to all the legal heirs of the defendant no.2, the defendant no. 3 & 4 are already on record and if any reply has to be filed by them on being legal heir the same should be filed within 7 days. Similarly, the other legal heirs shall on receipt of notice shall file the reply and affidavit in support, if any, to the O.A within 10 days of receipt of the notice, failing which the same shall not be taken on record and the right shall deemed to be closed as the present matter is time bound by the order of Hon'ble DRAT dated 315t August 2020.

Further, the copy of the reply if any filed on behalf of the legal heirs of the defendant no.2 shall be delivered to the Ld. Counsel of the applicant bank and the applicant bank, if want to file the rejoinder to that the same shall be filed on or before 30.09.2020, failing which the right to file the same shall also stand closed.

Accordingly, the present matter stands adjourned for 30.09.2020 for final arguments."(emphasis laid)

From a reading of this order of DRT, particularly the highlighted portions, and the submissions made from both sides during the course of arguments and perusal of the record the position which emerges is that during the pendency of the ban bank's O.A. father of the appellants, who was defendant no.1. had expired in May. 2017. To bring on reord his legal representatives other than his two sons Harish Dang and Praveen Dang who were already defendants in the O.A., the bank had moved an application on 13.09.2017 to bring on record the other two sons also of the deceased defendant no.2 Shri Hans Raj Dang, namely appellants Rajinder Dang and Devender Dang. That application was disposed of by the DRT vide order dated 05.02.2018 by holding that since the two sons of the deceased defendant no.2 were claiming that they had not inherited any asset of their father they were being discharged as also the two sons who were not defendants, namely, Rajender Dang and Devender Dang with the further observation that if during the course of recovery proceedings before the recovery officer it is brought to the notice of the recovery officer that the deceased defendant had left behind some assets which were inherited by his children he could then proceed in accordance with law against those assets. That order was passed in the presence of counsel for the bank. The bank did not challenge the correctness of that order anywhere for over two years. Suddenly the bank officials in August, 2020 moved an application no. 691/2020 seeking recall of aforesaid order dated 05.02.2018 and for a fresh decision on the application which had been disposed of on 05.02.2018. It was claimed in that application, which was supported by an affidavit of a senior officer of the bank, that bank's counsel was not aware of the order passed on 05.02.2018 and he was under the impression that that application was at the stage of completion of pleadings.

The learned DRT has accepted that application of the bank vide order dated 16.09.2020 which is now under challenge in the present appeal. The DRT has directed impleadment of Rajender Dang and Devender Dang and issuance of notice of the O.A. to both of them and were given ten days time to file their written statement.

Feeling aggreived, all the four brothers have come up in appeal by filing separate appeals. Harish Dang and Praveen Dang have filed separate appeals while the newly added defendants and their brothers Rajender Dang and Devender Dang have filed one joint appeal against the order dated 16..09.2020 I have heard their learned counsel who filed written submissions also and have perused the record made available to me digitally.

After giving my due consideration to the rival submissions and going through the impugned order I have no hesitation in coming the coming to the conclusion that the impugned order cannot be sustained. By the impugned order the DRT has set aside its earlier order dated 05.02.2018 whereby the application filed by the bank for bringing on record the legal representatives of the deceased defendant Mr. Hans Raj Dang was disposed of in the presence of the counsel for the bank. Thereafter that order could not have been recalled aftet two years and that too without any cogent reasons and without the bank seeking condonation of delay in seekinh recall of that order which had attained finality. It was claimed in the application no. 691/2020 that the counsel for the bank was not aware that the application filed on behalf of the bank on 13.09.2017 stood disposed of on 05.02.2018. However, that reason gets belied from the order dated 05.02.2018 itself which records the presence of counsel for the bank.

The impugned order also records that the earlier order dated 05.02.2018 even otherwise needed to be recalled because his predecessor had committed an error. Which observation shows that the present learned Presiding Officer has assumed the role of an appellate authority over the decision of his predecessor Presiding Officer which is impermissible in law. Rightly or wrongly the application filed by the bank on 13.09.2017 to bring on record the legal representatives of the deceased defendant stood disposed of way back on 05.02.2018 and had attained finality and only the bank could feel aggrieved with that disposal order and it could have challenged the same within the period of limitation which the bank did not choose to do. The DRT has no suo moto powers to pass any order ignoring the specific provision of review in the Act of 1993 by invoking Section 19(25) of this Act.

During the course of arguments when it was put to the learned counsel for the respondent bank as to why at all Application No. 619/2020 was moved by the bank and what prejudice could be said to have caused to the bank by that order he ha really no reason to give. Similarly it was put to all the learned counsel for the appellant brothers as to how they were prejudiced by the impugned order their answer was that with the passing of the order dated 05.02.2018 valuable right had accrued in their favour in asmuch as they could not now be fastened with any liability as the legal representatives of their deceased father as proceedings qua the deceased defendant stood abated on the expiry of ninety days period provided under Order XXII of CPC for bringing on record legal representatives of a deceased party to the litigation. However, now I need not go into these questions since the present three appeals are to be allowed fo4r then reasons aforesaid. It will now be the for the DRT to examine these issues if the same are urged during the course of final hearing and the DRT will be at liberty to take any view, in accordance with law since this Tribunal has not gone into the merits of the respective submissions regarding 'abatement' aspect.

These appeals are accordingly allowed and the impugned order dated 17.09.20 is set aside.

This tribunal had vide order dated 31.08.2020 while allowing an appeal earlier filed by Harish Dang and Praveen Dang when they were directed by the DRT to furnish security of ten crores or to face attachment of their property in NDSE, New Delhi directed the DRT to dispose of the S.A., which had already reached the stage of final arguments, within two months period. However, considering the fact thereafter not only some staff members of Delhi DRTs but even the learned Presiding Officer of DRT-III who was hearing the matter and was expected to dispose of the O.A. within the time given by this tribunal had been found infected with corona virus I deem it appropriate to extend the time for disposal of the O.A. by another two weeks as I am informed that the learned Presiding Officer has started hearing regular matters now through video conferencing.