Raghunath Rai Memorial Educational And Ors vs Union Bank Of India

P.K. Bhasin, J

Appellants are defendants in respondent Bank's O.A. filed under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act) in which a huge amount of over Rs. 60 lacs is being claimed.

Appellants/defendants did not enter appearance before the DRT despite service of summons, nor did they file written statement within the period prescribed by law. Consequently, they were proceeded ex parte and matter was fixed for ex parte hearing before the DRT. On appellants moving on application seeking setting aside the said order of setting them ex parte, the DRT set aside that order. Despite that, the appellants did not file their written statement within the time granted by the DRT. The appellants then sought acceptance of their written statement on record by filing an application. That application, along with which the written statement was annexed, has come to be rejected by the DRT vide the impugned order.

The explanation given by the appellants-defendants for not filing written statement in time was that they had approached the Bank for a financial restructuring and when the Bank declined their request, they requested the DRT to take on record their written statement, but their prayer was rejected by the DRT.

In my view, if these kind of requests are allowed, it will amount to giving liberty to the litigants to linger on the recovery proceedings initiated by the Banks/financial institutions. The appellants-defendants should not have avoided filing written statement on the pretext that they had approached the Bank for an out of Court settlement. They should have filed the written statement taking all their defences and simultaneously could have approached the Bank to have the relief of financial restructuring, but O.A. proceedings, which have a fixed time-frame for disposal, should not have been got deferred. I am in agreement with the observations made by the learned Presiding Officer of the DRT that defendants were only trying to delay the recovery proceedings. Once an O.A. is filed it is to be accompanied by affidavit of evidence and, therefore, no adjournments should be granted even to the Banks/financial institutions to file their evidence affidavits, which is the normal practice being followed by the DRTs noticed by this Tribunal. If the applicant Bank fails to comply with the requirement of Section 19 which provides that O.A. shall be accompanied by documents relied upon as well as evidence by way of affidavit, it cannot expect any different treatment from the DRTs. DRTS should not also show undue indulgence to Banks/financial institutions in this regard. Their defaults must also be dealt with strictly.

I do not find any merit in this appeal and, therefore, it is dismissed.