Raman Naganlal Bohara vs HDFC Bank Ltd

Ashok Menon, Chairperson

This Appeal is filed by the original Defendant in Original Application (O.A.) No. 242 of 2008 on the files of D.R.T.-III, Mumbai, challenging the order dated 27.02.2015 of the said Tribunal in Miscellaneous Application (M.A.) No.85 of 2014, which rejected the Appellant Applicant’s application for setting aside the exparte order dated 27.06.2014 of the said Tribunal in the aforesaid O.A. HDFC Bank Ltd., the Respondent herein is the original Applicant in the O.A. and was seeking for issuance of a Recovery Certificate for a sum of Rs.29,81,299.54 together with interest and costs from the Defendant-Appellant under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the RDDB&FI Act).

The original Applicant’s case as outlined in the O.A. can be encapsulated thus:

Defendant approached the Applicant Bank for a vehicle Loan of Rs.23 Lakhs as he intended to purchase a Mercedes Benz Car. A Loan Agreement was executed by Defendant on 27.08.2005, and he accepted the terms and conditions of the said Agreement. A Demand Promissory Note for a sum of Rs.23 Lakhs was also executed in favour of the Applicant Bank, on 06.09.2005, and thereafter, Defendant allegedly purchased a second-hand Mercedes Benz Car bearing Registration No. MH 06 AC 2222 which was hypothecated to the Bank to secure the said loan. After having paid three Equated Monthly Installments (EMI) to the Bank, Defendant defaulted further payments. Notice was issued on 04.01.2008 calling upon Defendant to pay a total sum of Rs.29,81,299.54 together with further interest till the date of actual payment. Defendant did not respond despite having received the notice. The Applicant Bank was thus constrained to file the aforesaid O.A.

Summons were issued and served on the Defendant who appeared and filed a Written Statement (W.S.) stating that the claim of the Applicant Bank is misconceived and motivated with manifest fraud against Defendant. He admits that he had approached Applicant Bank for the loan but the Bank committed fraud by not handing over the amount sanctioned to the Appellant in connivance with their direct selling agents namely, M/s. Milestones and M/s. Royal Motors. One Mr Prinu George, the proprietor of M/s. Royal Motors, put for sale a used Mercedes Benz Car allegedly owned by one Mr Rajendra Mahale and it is at the behest of the said Mr Prinu George that Defendant approached the Applicant Bank for a loan through M/s. Milestones. The signatures of Defendant were procured on various documents including a Demand Promissory Note, and 36 Post Dated Cheques for Rs.76,400/- each was also obtained from Defendant allegedly for the payment of EMIs. The repayment commenced on 07.10.2005 and prior to that on 24.09.2005 Defendant was informed by the Applicant Bank that his Loan Application was sanctioned and an amount of Rs.23 Lakhs was disbursed. Defendant, however, did not receive the amount at any point in time, nor was he delivered the car which he had intended to purchase with the loan amount. Under the circumstances, Defendant is neither liable to repay the loan nor is the alleged Agreement binding upon him. Defendant, therefore, insists on the dismissal of the O.A. with compensatory costs.

Though Defendant filed W.S., with the above-mentioned contentions, he failed to file C.A.O.D. in support of contentions in the W.S.

The Applicant adduced evidence by way of the Claim Affidavit of the authorized person. Original documents were handed over to the Economic Offence Wing (EOW) of Police in connection with a complaint that was lodged by Defendant. Secondary Evidence was produced by the Bank and relying on those documents, the Bank was able to prove that the borrower had executed the Loan Agreement on 27.08.2005 and subsequently a Demand Promissory Note was also executed on 06.09.2005,

Since no evidence was forthcoming from the Defendant and no documents were also filed, consequently, the O.A. was allowed directing the Defendant to pay a sum of Rs.29,81,299.54 together with interest @ 12% p.a. The Applicant Bank was given a decree to recover the amount by proceeding against the hypothecated Car bearing Registration No. MH 06 AC 2222.

After the O.A. was allowed vide order dated 27.06.2014, the Appellant Defendant approached the D.R.T. by filing M.A. No. 85 of 2015 for setting aside the order dated 27.06.2014. The Ld. D.R.T. after considering the application and the objections raised by the Bank held that there is no prima facie case in favour of the Defendant and that he did not produce any documents in support of his contentions in the W.S. and that there is no sufficient reason for setting aside the order dated 27.06.2014 in O.A. No.242 of 2008. It was also observed by the Ld. P.O., D.R.T., that Medical Certificate produced by Defendant 02.07.2014 advised him bed-rest from 21.06.2014 to 02.07.2014 is not reliable. Defendant has also not explained the reasons for his Counsel’s absence continuously, therefore, relying on the decision of Hon’ble Apex Court in Parimal V/s. Veena [(2011) 3 SCC 54 SC] it was observed that 'sufficient cause' for not appearing as is required under Order 9, Rule 13 of the C.P.C. has not been explained and, therefore, the application to set aside the order dated 27.06.2014 cannot be allowed and the application was rejected. Aggrieved by that order Defendant has come up with this Appeal.

Defendant stated that he was cheated by the Bank in collusion with the dealer, M/s. Milestones, by not providing the amount sanctioned for purchase of Mercedes Benz Car and thereafter, the Defendant was forced to pay the amount which he has never received. Despite the fact that the Respondent Bank did not file C.A.O.D., the D.R.T. proceeded to dispose of the matter. The Appellant states that he was suffering from Diabetes and Hypertension and was unwell on 21.06.2014. The Medical Certificate dated 02.07.2014 was also produced to prove that he was unwell. His Advocate never informed the Tribunal about his illness and when he attended the Court, he was informed that the O.A. has been allowed on 27.06.2014. The application filed to recall that order was dismissed vide the impugned order. The Appellant has a very good case to defend, therefore, it is prayed that the impugned order may be set aside and the O.A. be restored on the files for further consideration on merits.

Heard the learned counsel for Appellant and the learned counsel for Respondent Bank.

The learned counsel for the Appellant relied on the decision of the Hon’ble Supreme Court in the case G. P. Srivastava V/s. R. K. Raizad & Ors. [AIR 2000 SC 1221] in support of his contention that the Applicant was set aside and exparte order ought to have been allowed. The Hon’ble Supreme Court as in the above-cited decisions held as follows:

“ Under Order 9 Rule 13 C.P.C. an ex-parte decree passed against a defendant can be set aside upon satisfaction of the Court that either the summons were not duly served upon the defendant or he was prevented by any 'sufficient cause' from appearing when the suit was called on for hearing. Unless 'sufficient cause' is shown for non-appearance of the defendant in the case on the date of hearing, the Court has no power to set aside an ex-parte decree. The words "was prevented by any sufficient cause from appearing" must be liberally construed to enable the court to do complete justice between the parties particularly when no negligence or inaction is imputable to erring party. Sufficient cause for the purpose of Order 9 Rule 13 has to be construed as elastic expression for which no hard and fast guidelines can be prescribed. The courts have wide discretion in deciding the sufficient cause keeping in view the peculiar facts and circumstances of each case. The 'sufficient cause' for non appearance refers to the date on which the absence was made a ground for proceeding ex-parte and cannot be stretched to rely upon other circumstances anterior in time. If 'sufficient cause' is made out for non appearance of the defendant on the date fixed for hearing when ex-parte proceedings initiated against him, he cannot be penalised for his previous negligence which had been overlooked and thereby condoned earlier. In a case where defendant approaches the Court immediately and within the statutory time specified, the discretion is normally exercised in his favour, provided the absence was not malafide or intentional. For the absence of a party in the case the other side can be compensated by adequate costs and the lis decided on merits.”

In the instant case, the Defendant was served with a Summons and he was appearing through Counsel and he has produced a Medical Certificate stating that he was unwell for a limited period from 21.06.2014 to 02.07.2014. The order allowing the O.A. was pronounced on 27.06.2014. The arguments were heard on 03.06.2014 and on 23.06.2014. It cannot be, therefore, said that the Counsel had any reason to absent himself, and not to argue even if Defendant was unwell. The fact that Defendant did not file documents together with his W.S. and that the O.A. had been pending since the year 2008 is also pertinent.

The learned counsel appearing for Respondent submits that whenever a Car is purchased, the loan is not disbursed to the borrower, but to the seller of the Car and accordingly, in this instant case too, the amount was disbursed to the seller. Had Defendant not received the car, he would not have paid three instalments of the E.M.I. that he had paid. Moreover, even after payment of the three instalments, if he had actually not delivered the Car, he would have definitely approached the Police Authorities and proceeded against the seller/dealer. It cannot be believed that the Appellant would have been naive enough never to have taken any action against the seller/dealer for not having delivered the Car despite having received the entire sale consideration paid by the Bank. The Appellant’s story, therefore, appears like a make-believe story.

After having anxiously considered the arguments raised by the learned counsel appearing for Appellant and Respondent, I find substance in the arguments raised by the Respondent Bank and the Appellant has failed miserably to make even a prima facie case in his favour. The Original Application has been pending since 2008, and he has not taken any steps to prove his case of defence by producing any documents. The Bank had produced copies of documents which were relied upon as Secondary Evidence in the absence of any contest by Defendant. It was submitted that the original documents were submitted before the E.O.W. on the basis of a complaint which was lodged by the defendant. The investigation has not made any headway in order to support the contentions of the Defendant-Appellant. There are no documents forthcoming relating to the genuineness of the contentions raised by the Appellant. I find that the Ld. P.O., D.R.T., was perfectly justified in non-suiting the Defendant-Appellant. The decision relied upon by the Appellant is not applicable to the case at hand because the facts are totally different. In that case G. P. Srivastava, the Defendant was unwell and his Counsel could not make representation before the Court for the reason that the Counsel’s nephew met with an accident and had died in a road accident on the date of hearing, therefore, the Hon’ble Apex Court held that there was “sufficient cause” for non-appearance of the party and the counsel, and so allowed the prayer to set aside the exparte decree. Unless “sufficient cause” is shown for the non-appearance of the Defendant or his Counsel on the date of hearing, the Court has no power to set aside the exparte decree. In the instant case, there does not appear a sound and sufficient reason for Defendant to get the exparte judgment set aside. The Appeal is, therefore, to be dismissed and I do so with all its consequence regarding costs.

All Miscellaneous Applications, if any, are dismissed as infructuous.