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Judgment
S.N.H. Zaidi, J
This appeal impugns the order dated 19.10.2011 passed by the learned Presiding Officer of DRT-I, Delhi having additional charge of DRT- II, Delhi on application (I.A. No. 656/2011) filed in O.A. No. 1250/95, dismissing the application for cross-examination of four witnesses who had filed their affidavits in evidence on behalf of the applicant Bank (respondent herein). Briefly stated, the relevant facts of the case are that the respondent Bank had filed a suit for recovery of Rs. 7,99,98,397.84 with pendente lite and future interest on 6.7.1997 before the Hon'ble Delhi High Court, which was subsequently transferred to Debts Recovery Tribunal (for short 'the DRT') and was registered as O.A. No. 1250/95 upon the enactment of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short 'the Act'). The defendant (appellant herein) contested the suit and filed written statement. During the proceedings of the case, affidavits of four witnesses were filed and documents were exhibited as evidence of the Bank. The appellant also filed evidence by way of affidavit in support of his case of written statement and moved an application (I.A. No. 656/2011) for permission to cross-examine the Bank's witnesses. The Bank contested the application by filing reply. The learned Presiding Officer of the DRT dismissed the application by the impugned order, giving rise to this appeal.
I have heard Mr. G.L. Rawal, Sr. Advocate along with Ms. Praveen Rawal for the appellant and Mr. Pallav Saxena for the respondent Bank and perused the record.
It is undisputed that two credit facilities, namely, ABLC and Current Overdraft, were sanctioned by the Bank to the Company (M/s. Jain Shudh Vanaspati Limited, now known as M/s. Elephanta Oil and Vanaspati Industries Limited), proforma respondent No. 2 herein, after hypothecation of plant, machinery, other assets and imported goods and stock in trade. Both the loan accounts, however, became irregular and a suit for the recovery of outstanding amount was filed before the Hon'ble High Court. The defendant/appellant took the plea in the written statement that the defendant Company, acting on the assurances and promises of the Bank to release the amount against the sanctioned limit of Rs. 17 crores in ABLC account and Rs. 5 crores in Bank guarantee account, had entered into contracts with a foreign company and agreed to purchase/import 50.000MTs of Soda Ash and as a reciprocal contract to export 80,000 MTs of Indian De-oiled Rice Bran (Rice Bran Extraction) and after entering into these contracts approached the Bank for opening foreign Letter of Credit (L.C.) within the sanctioned limits, but the Bank not only did not open the L.C, but also refused to execute the Bank guarantee in terms of the contracts entered into by the defendant company with the foreign company. As a consequence thereof, the defendant/appellant not only suffered huge loss in profit on import but also of premium against the export of Rice Bran Extraction, which could not be made. According to Mr. Rawal, it has all been done due to illegalities committed by the Bank in not following the Banking norms and policies of the Reserve Bank of India in regard to export and non-cooperating attitude of the Bank officials and answers to the questions as to why the Banking norms were not followed by the officials of the Bank can only come by cross-examining the witnesses of the Bank. His further contentions is that the Bank is bound by law not only in the contractual obligations with its customers but to fulfill the promises as settled by Hon'ble Supreme Court in the case of Gujarat Stale Financial Corporation v. Lotus Hotels Pvt. Ltd., : AIR 1983 SC 848. He further submitted that the Bank is required to maintain regular accounts and records, and to prove the authenticity of the record relied upon by the Bank, its witnesses are required to be cross-examined.
Mr. Saxena, on the other hand, contended that the factum of sanctioning of the loan facilities is not in dispute. He has further submitted that it is also not in dispute that the Company is indebted to the Bank to several crores of rupees and though set off of the claim has been mentioned in the application (I.A. No. 656/ 2011) by the appellant, on the basis of alleged losses, but neither any prayer of setoff has been made in the written statement nor the required fee has been paid qua that prayer. He has also drawn my attention to the observations of the Hon'ble Supreme Court made in the case of Union of India and Another v. Delhi High Court Bar Association and Others, : II (2002) SLT 556= (2002) 4 SCC 275.
Mr. Saxena further submitted that in para 22 of the deed of Hypothecation Agreement executed on behalf of the Company, the Bank was given full liberty to stop further advances without assigning any reason even though the limit of the sanctioned amount is not reached and as such the Bank was under no contractual obligation to open the L.C. or to give any guarantee qua the agreement of import and export allegedly entered into by the appellant with the foreign company. His further submission is that the case of the applicant is based on documentary evidence and as such no cross-examination could be permitted and the learned DRT had rightly dismissed the application for cross-examination of the witnesses.
The Hon'ble Apex Court in para 23 of its judgment rendered in the case of Union of India and Another v. Delhi High Court Bar Association and Others (supra) has observed that:
In other words, the Tribunal has the power to require any particular fact to be proved by affidavit, or it may order that the affidavit of any witness may be read at the hearing. While passing such an order, it must record sufficient reasons for the same. The proviso to Rule 12(6) would certainly apply only where the Tribunal chooses to issue a direction on its own, for any particular fact to be proved by affidavit or the affidavit of a witness being read at the hearing The said proviso refers to the desire of an applicant or a defendant for the production of a witness for cross-examination. In the setting in which the said proviso occurs, it would appear to us that once the parties have filed affidavits in support of their respective cases, it is only thereafter that the desire for a witness to be cross-examined can legitimately arise. It is at that time, if it appears to the Tribunal, that such a witness can be produced and it is necessary to do so and there is no desire to prolong the case that it shall require the witness to be present for cross-examination and in the event of his not appearing, then the affidavit shall not be taken into evidence. When the High Courts and the Supreme Court in exercise of their jurisdiction under Article 226 and Article 32 can decide questions of fact as well as law merely on the basis of documents and affidavits filed before them ordinarily, there should be no reason as to why a Tribunal, likewise, should not be able to decide the case merely on the basis of documents and affidavits before it. It is common knowledge that hardly any transaction with the Bank would be oral and without proper documentation, whether in the form of letters or formal agreements. In such an event the bona fide need for the oral examination of a witness should rarely arise. There has to be a very good reason to hold that affidavits, in such case, would not be sufficient.
In the light of the above preposition of law, I am convinced that the appellant has failed to show any good reason for the cross-examination of the Bank's witnesses. It is not the case of the appellant that the respondent Bank did not allow the appellant to avail of the loan up to its sanctioned limits and the only grievance is that the Bank did not open the foreign L.C. and did not give guarantee in pursuance of the agreement with the foreign company, resulting in heavy losses to him. Although there is some reference of Bank's liberty from giving further loans without assigning any reason in para 22 of the Agreement of Hypothecation, as referred to by Mr. Saxena, yet I am of the view that since the O.A. is yet to be decided and the learned DRT is seized with the matter, it would be prejudicial to the interest of the parties if any opinion is expressed in this appeal qua the said clause. The principle of promissory estoppel as explained by the Hon'ble Apex Court in the case of Gujarat Financial Corporation (supra) does not apply to the case under consideration as the facts and circumstances of this case are quite different. The Supreme Court in para 9 of the judgment has observed that:
The true principle of promissory estoppel, therefore, seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective whether there is any pre-existing relationship between the parties or not.
The learned Presiding Officer of the Tribunal below has stated that the concerned case has already become about 16 years old and referring to the report of the Official Liquidator, who was representing the respondent Company, which is admittedly under liquidation, has rightly observed that by moving the application for cross-examination of the witnesses the defendant (appellant herein) is attempting to gain time without any legal substance in his plea.
In view of the aforesaid, I am satisfied that the learned DRT has rightly dismissed the appellant's application and no interference is warranted in it and this appeal is liable to be dismissed being devoid of any force. The appeal is. accordingly, dismissed. Cost made easy. Copy of this order be furnished to the parties as per law and a copy be also sent to the learned DRT.