Standard Chartered Bank vs Radnik Exports And Ors.

S.N.H. Zaidi, J

This appeal impugns the order dated 14.1.2011 passed in OA No. 345/2009 by the Presiding Officer of the Debts Recovery Tribunal (DRT) II, Delhi whereby the application IA No. 376/2010 filed by the respondents for the recall of the order dated 31.12.2009 has been allowed and the order has been recalled. The facts on record indicate that the appellant Bank had filed the said OA for the recovery of certain amount from the respondents and the DRT while issuing notice on that OA on 31.12.2009 directed the respondents to appear in person on 4.01.2010 and disclose their assets on affidavit. This order was reconfirmed after the respondents appeared through their Counsel on that date. The respondents filed application IA No. 376/2010 on 27.4.2010 for recalling the order dated 31.12.2009, which has been allowed by the DRT by the impugned order dated 14.1.2011 and the order dated 31.12.2009 has been recalled. Feeling aggrieved, the Bank has filed this appeal.

Mr. Navneet Gupta, the learned Counsel appearing for the appellant, contended that the review application (I.A. No. 376/2010) was time-barred as it was filed after about four months of the order dated 31.12.2009, whereas under Rule 5A of the DRT (Procedure) Rules, 1993, the period of limitation for the review application is only 60 days from the date of order, He further contended that neither the respondents filed any application for condonation of delay nor they gave any explanation as to why the review application could not be filed within the aforesaid period of limitation. He has placed reliance upon the judgment of the Delhi High Court rendered on 2.5.2012 in W.P.(C) No. 7253/2011, Inderjeet Arya and Anr. v. ICICI Bank Ltd. in support of his contention. The Hon'ble Court, while considering the issue of limitation qua filing of the review application, has held that Rule 5A of the DRT (Procedure) Rules, 1993 gives leeway to DRT to entertain an application for review only if it is filed latest by 60th day from the date of the order of which the review is sought and since there is an express bar imposed under Sub-rule (2) of Rule 5A on the DRT in entertaining the review application after the expiry of 60 days, there is no scope for entertaining that application for review beyond that period.

Mr. Navneet Gupta, referring to the observation of the Hon'ble Supreme Court made in the case of A.P.S.R. T.C. and Ors. v. Abdul Kareem, (2007) 2 SCC 466, that the Court should not permit hearing of an application for "clarification", "modification" or "recall" if the application in substance is a clever move for review, contended that application IA 376/2010 is in effect a review application.

He also contended that as the loan in question was unsecured, the DRT, besides requiring the defendants to appear in person and give details of their properties/personal assets on affidavit, on the request of the appellant, had also issued notices, under Section 19(12) of the RDDBFI Act, to them to show cause as to why their properties be not attached for which the DRT was fully competent, therefore, the order dated 31.12.2009 was rightly passed and its recall in its entirety was unwarranted.

Mr. Navneet Gupta also contended that before the filing of the O.A. by the appellant Bank, the respondents had filed a suit (No. 2296/2009) before the High Court challenging their liabilities on the basis of various transactions, which were alleged to be in the nature of wager, whereas in the written statement filed in the OA they have taken a different stand and as such their conduct is not proper and dubious. He also contended that the order impugned is not a speaking one as no reasoning has been given and mere mention that no substance was found in the contentions of the appellants is not sufficient. He also contended that the respondents have failed to show any error apparent on the face of the order dated 31.12.2009.

Mr. S.L. Gupta, the learned Counsel for the respondents, however, contended that since the order dated 31.12.2009 was passed ex parte behind the back of the respondents, therefore, no review thereof could be sought and the only legal remedy available to the respondents was to seek the recall of the that order and thus the application (I.A. No. 376/2010) was filed only for recalling of the said order without seeking any review thereof. He pointed out that the Supreme Court has observed in Asit Kumar Kar v. State of West Bengal and Ors., (2009) 2 SCC 703, that there is a distinction between a review petition and a recall petition and while in a review petition the Court considers on merit whether there is an error apparent on the face of record, in a recall petition the Court does not go into the merit but simply recalls an order which was passed without giving an opportunity of hearing to the affected party. He also submitted that the Hon'ble Gwalior Bench of the Madhya Pradesh High Court in Smt. Shanti Devi Aggarwal v. V.H. Lulla, AIR 2004 MP 58, has also differentiated between the terms "recall of judgment" and "review" by referring to the Black's Law Dictionary (5th edition) that "recall of judgment" means to revoke, cancel, vacate, or reverse a judgment for matters of fact; whereas, "review" means re-examine judicially or administratively; a reconsideration; a reexamination; revision; consideration for purposes of correction; used especially of the examination of a cause by an appellate Court or appellate administrative body. According to him, neither the respondents had sought for the review of the order dated 31.12.2009 in application IA 376/2010 nor the learned Presiding Officer had reviewed it and had only recalled that order through the impugned order. Mr. S.L. Gupta, thus, contended that the bar of limitation of 60 days as envisaged under Rule 5A, as well as the law laid down in Inderjeet Arya's case (supra) do not apply to the facts and circumstances of this case.

The respondents' Counsel further contended that Section 19(20) of the RDDBFI Act imposes an obligation upon the DRT to give an opportunity of hearing to the other party before making any interim or final order to meet the ends of justice, whereas, the order dated 31.12.2009 whereby the defendant/respondents were directed to appear in person and to disclose their assets on affidavit was made without affording any opportunity of hearing to them. He pointed out that Subsection (25) of the said Section 19 as well as Rule 18 of the DRT (Procedure) Rules empower the DRT to make orders and give directions to prevent the abuse of its process or to secure the ends of justice. According to him, the said power is similar to the inherent power vested with the Civil Courts under Section 151, CPC, as it also empowers the Courts to make orders necessary to meet the ends of justice or to prevent the abuse of its process. Relying upon the judgments of the Hon'ble Supreme Court in the cases of Sunita Devi Singhania Hospital Trust & Anr. v. Union of India & Anr., (2008) 16 SCC 365, Deepa Gourang Murdeshwar Katre v. Principal V.A.V. College of Arts & Ors., (2007) 14 SCC 108, Lajwanti v. Union of India & Ors., : (2000) 10 SCC 345 and Indian Bank v. Satyam Fibres (India) Pvt. Ltd., (1996) 5 SCC 550, Mr. S.L. Gupta contended that the power to recall the earlier order is an inherent power which is vested in a Court or forum and the DRT being vested with that inherent power has rightly recalled its order dated 31.12.2009 to meet the ends of justice as sufficient cause was shown to it by the respondents.

The respondents' Counsel also contended that the disclosure of assets by the defendant/respondents, as was ordered by the Tribunal on 31.12.2009, was bound to adversely affect the business interest/reputation of the respondents and would have caused them irreparable injury.

I have considered the submissions of the parties' learned Counsel and perused the record. A perusal of the application (I.A. No. 376/2010) would show that the defendant/respondents had not sought for the review of the order and had only asked to recall the order dated 31.12.2009 on the ground that it was made without hearing them and disclosure of their assets would adversely affect their business interest and reputation. There is no dispute between the parties that the order dated 31.12.2009, calling upon the defendant/respondents to appear in person on a particular date and to disclose their assets, movable and immovable, on affidavit, was made in their absence and without hearing them. I am inclined to accept the contention of the respondents' Counsel that since the said order was an ex parte one, therefore, the same could not have been reviewed and it could only be recalled for which application IA 376/2010 was filed by the respondents. Since a review application is different to an application for recall as explained by the Hon'ble Supreme Court in Asit Kumar Kar v. State of West Bengal and Ors., (supra) by observing that in a review petition the Court considers on merit whether there is an error apparent on the face of record, whereas in a recall petition the Court does not go into the merit but simply recalls an order which was passed without giving an opportunity of hearing to the affected party, the application IA 376/2010 is held to be a recall petition and not a review petition and thus the provisions of Rule 5-A of the DRT (Procedure) Rules would not apply to that application and as such the law laid down by the Delhi High Court in Inderjeet Arya's case (supra) does not apply to the facts and circumstances of this case and the plea raised by the appellants qua limitation is untenable.

A perusal of the recall application would show that the respondents were aggrieved with only that portion of the order dated 31.12.2009 whereby they were directed to appear on a particular date and to disclose their assets on affidavit and not by that order whereby notices were to be issued to them to show cause for the attachment of their properties. Section 19(12) of the RDDBFI Act empowers the DRT to make an interim order, whether by way of injunction, stay or attachment. The recall application I.A. No. 376/2010 had though not disputed the order qua issue of show-cause notice, yet it had sought the recall of the entire interim order dated 31.12.2009, including the order qua issue of notice to show cause. The DRT has recalled the entire interim order dated 31.12.2009 by the impugned order. The contention of the appellant's Counsel thus appears tenable that the order for issue of notice to the defendant/respondents to show cause as to why their properties be not attached was in accordance with the provisions of Section 19(12) of the RDDBFI Act and thus the order dated 31.12.2009 qua it was not warranted to be recalled and the impugned order to that extent is untenable.

The contention of the appellant that the conduct of the respondents is not proper as they had taken a different stand in their written statement than the one taken in the Suit No. 2296/2009 filed before the High Court is untenable, being irrelevant, as it does not relate to the issue in question in this appeal.

The Hon'ble Supreme Court in Sunita Devi Singhania Hospital Trust's case (supra) has held that it is true that the period of limitation as specified in terms of Section 129-B(2), Customs Act was required to be observed, but the Tribunal has inherent power of recalling its own order if sufficient cause is shown therefor. It has further observed that the principles of natural justice envisage that a mistake committed by the Tribunal would attract the ancillary and/or incidental power of the Tribunal necessary to discharge its functions effectively for the purposes of doing justice between the parties. In the cases of Deepa Gourang Murdeshwar Katre (supra) and Indian Bank (supra), the Hon'ble Apex Court has held that the Court in exercise of its inherent power can recall its own order obtained by fraud and misrepresentation. In view of the law laid down in the above cases, it is clear that the DRT is vested with inherent power to recall any order if sufficient reasons exist for that.

On the basis of above discussion, I am of the view that I.A. No. 376/2010, being a recall application, the Tribunal below has rightly exercised its inherent power in recalling the ex parte order dated 31.12.2009 whereby the defendant/respondents were directed to appear on the given date for the disclosure of their assets on affidavit and as such the order impugned qua the recall of the said order is not suffering with any infirmity or illegality. It is, however, held that the order impugned recalling that order qua issue of notice to show-cause for attachment of the properties is, not in accordance with the law and to that extent it is liable to be interfered with.

The appeal is, thus, partly allowed and the order impugned recalling the order dated 31.12.2009 relating to issue of notice to the respondents to show cause for attachment of their properties is set aside, but the appeal against the order impugned qua recall of the order dated 31.12.2009 for directing the respondents to disclose their assets on affidavit is allowed and the order impugned is set aside to that extent. Parties to bear their own cost of this appeal. Copy of this order be furnished to the parties as per law and be also sent to the Tribunal concerned.