J.M Malik, Chairperson:— This order shall dispose off two appeals which arise out of the same order dated 9th September, 2009 passed by the Presiding Officer, DRT. The Appeal No. R-1137/2009 has been filed by Shaila Crown Pvt. Ltd. through its Executive Director Mr. Sanjay C. Prakash and the Appeal No. R-1 136/2009 has been filed by the directors of the said Company, namely, Mr. Chandra Prakash, Mrs. Bina S. Sahai, Mrs. Rekha and Mr. Sanjay C. Prakash.
2. State Bank of India had filed an Original Application (O.A) against Shaila Crown Pvt. Ltd. and its five directors /guarantors, namely, Mr. Sanjay C. Prakash, Mr. Chandra Prakash, Mrs. Bina S. Sahai, Mr. Jai Prakash and Mrs. Rekha Sanjay. An ex-parte judgment was passed in favour of the bank and against the above said defendants/appellants; A recovery certificate in the sum of Rs. 57,74,762.72 together with pendente lite and future interest @ 17.75% p.a with quarterly rests with effect from 20th February, 2002 till full realization was issued.
3. Aggrieved by that order, the appellants preferred an application under section 22(2)(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short ‘RDDBFI Act’) on 14th August, 2007. The said application was dismissed vide impugned order.
4. I have heard Mr. Chandra Prakash for the appellants and Mr. D.K Pathak for the respondent No. 1 bank. It may be mentioned here that Mr. Chandra Prakash, one of the appellants, who himself is an advocate, argued the case in person.
5. The appellants vehemently argued that the decree passed by the lower Court is a nullity as the same is barred by time. He explained that the instant case is not covered by Art. 1 of the Limitation Act as there are no reciprocal demands between the parties. He invited my attention towards Ext. A-26 and pointed out that there are no reciprocal demands between the parties. Consequently, he argued that this cannot be stated to be a mutual and open current account. He vehemently argued that this fact gives rise to a triable issue.
He argued that the loan was obtained in April 1993 and the G.A was filed after nine years in the year 2002. It was also argued on behalf of the appellants that statements of accounts were not proved in accordance with law. The same were supported by an affidavit of a bank officer who was not aware of the facts of the case and was not present at the time of the above said transaction/execution of the documents.
6. In order to bring his point home, he has cited a few authorities before this Court. In Chandradhar Goswami v. Gauhati Bank,1 it was held:
“…Assuming this is a case of an open, current and mutual account, the last payment was made in Novem ber, 1949. Article 85 gives limitation of three years from the close of the year in which the last item admitted or proved is entered in the accounts (such year to be com puted as in the account). The ac count in this case shows that the year was the calendar year. The mutuality in this case came to an end in 1949, for we find from the account that thereafter there are only entries of interest due to the bank upto 31st October, 1952. So the bank would get three years from the end of 1949 under Article 85 and as the suit was filed on 9th April, 1953, this entry will be of no help to the bank….”
7. It was also contended that the Court had no jurisdiction, it being a time-barred case, and as such the order passed by the DRT is a nullity. In support of his case, he has cited ah authority reported in Chief Engineer, Hydel Project v. Ravinder Nath.2 The relevant portions of paras 17 and 19 are reproduced as follows:—
17…. Jurisdiction as to subject-matter, however, is totally distinct and stands on a different fo???ting. Where a Court has no jurisdiction over the subject-matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a Court having no jurisdiction is a nullity…
…It is well settled and needs no authority that where a Court takes upon itself to exercise a jurisdiction it does not possess, its decision amounts to nothing. A decree passed by a Court having no jurisdiction is non est and its invalidity can be set up whenever it is sought to be enforced as a foundation for a right, even at the stage execution or in collateral proceedings. A decree passed by a Court without juris diction is acoram non judice………”
“19. Once the original decree itself has been held to be without jurisdiction and hit by the doctrine of coram non judice, there would be no question of upholding the same merely on the ground that the objection to the jurisdiction was not taken at the trial, First Appellate or the Second Appellate Stage….”
Another case cited is reported in Mafat-Industries Ltd. v. Union of India. The levant extract in para No. 338 is repro-???ced as follows:—
“….(3) Cases of nullity may also arise during the course or at the conclusion of the enquiry. These cases are also cases of want of jurisdiction if the word “jurisdiction” is understood in a wide sense. Some examples of these cases are: (a) when the Tribunal has wrongly determined a jurisdictional question of fact or law; (b) when it has failed to follow the fundamental principles of judicial procedure, e.g, has passed the order without giving an opportunity of hearing to the party affected; (c) when it has violated the fundamental provisions of the Act. e.g, when it fails to take in??? account matters which it is required to take into account or when it takes into account extraneous and irrelevant matters; (d) when it has acted in bad faith; and (e) when it grants a relief or makes an order which it has no authority to grant or make; as also (f) when by misapplication of the law it has asked itself the wrong question…”
8. It was argued for the appellants ??? consent does not give jurisdiction to ??? Court. The learned Counsel opined ???t the acknowledgements produced by bank are not admissible for the above ???ntioned reason. He contended that all ???se acknowledgement notes did not ex-???d She limitation and no cause of action ???i arisen as Art. 19 of the Limitation Act ???s not attracted. Again, no addition or subtraction find prominence in the revival letters so as to denote the actual liability. He has also cited the following authority.
9. In the case reported in State of Ut-tar Pradesh v. Hindustan Aluminium, it was held that rules violative of the provisions of the principal Act or any other existing statute are unsustainable. The said judgment is based on no evidence and as such it is a nullity. It was argued that since the entries in the books of accounts were not proved, therefore, the judgment passed by the Tribunal is a nullity.
10. Instead of touching the heart of the problem, the learned Counsel for the appellants just skirted it. He has cited far fetched authorities which are inapplicable to the instant case. The appellants have signed a number of revival letters. It may be recalled that loan was obtained on 14th July, 1993. There are revival letters signed on 22nd April, 1996 for a sum of Rs. 10 lacs in the name of Mr. Chander Prakash, Mr. Sanjay C. Prakash, Mrs. Bina S. Sahai, Mr. Jai Prakash, Mrs. Rekha Sanjay. The second is in the name of Shaila Crown Pvt. Ltd. signed through its directors for a sum of Rs. 10 lacs. The third is for a sum of Rs. 10,50,000/- by Mr. Chander Prakash, Mr. Sanjay C, Prakash, Mrs. Bina S. Sahai, Mr. Jai Prakash and Mrs. Rekha Saiyay dated 22nd April, 1996. The fourth one is for a sum of Rs. 10,50,000/- in respect of Shaila Crown Pvt. Ltd. through its directors.
11. There are other revival letters singed by all the aforesaid four persons. These four acknowledgement letters are of 15th April, 1999. The case was filed on 19th February, 2002. Under these circumstances, it is difficult to fathom as to how the present case is barred by time. As a matter of fact, the appellants have no crow to pluck with the bank.
12. Even if the fact that account between the parties was neither mutual nor open and current or there were no reciprocal demands, the case was still filed within time.
13. The argument advanced on behalf of the appellants that acknowledgements tantamount to consent and consent does not give jurisdiction to the Court is lame of strength. There can be no conflictions on the point that acknowledgements do ex tend the time. In Wandoor Jupiter Chits (P) Ltd. (in Liquidation) v. K.P Mathew, it was held:
“acknowledgement of the debt under section 18 of the Limitation Act provides for a fresh period of limitation would itself be sufficient, in the context of a contract of guar antee, to keep the surety's liability alive. Surety's contract being sepa rate and collateral could not be equated to that of a co-debtor or joint contractor within the meaning of section 20(2) of the Limitation Act so that the surety could not plead that the written acknow ledgement by the debtor could not keep his (surety's) liability alive. The surety could not also plead discharge under section 133 of the Contract Act since the debtor's ac knowledgement would not create a contract different from the one the performance of which the surety had guaranteed. The acknow-ledgement does not involve the making of another contract under section 134 and 135 of the Contract Act whereby the creditor discharges the debtor or makes a composition with him. Nor is section 137 of the Contract Act attracted because mere forbearance to sue even for a time beyond the period of limitation does not operate to discharge the surety. An acknowledgement does not also impair the remedy of the surety against the debtor, under section 139.”
This view also draws support from another authority reported in Margaret Lalita Samuel Mrs v. Indo Commercial Bank Ltd. Ltd.
14. The instant case was filed well within time.
15. On the other hand, the Counsel for the respondent bank has invited my attention towards Ext. A-27 which is a statement of account. It was explained that Ext. A-26 is only the statement of Bill accounts. The actual statement of accounts is Ext. A-27 and even there is an entry in Ext. A-26 of 15th November, 1993 and the credit and debit entries go to show that this is an open, mutual and current account. The statement of account at Ext. A-27 runs into 28 pages. The Counsel for the appellants did not try to discuss the same. Moreover, otherwise too, the case came up before the learned D.R.T within time. The entries from 26th October, 1999 to 29th September, 2000 show that the appellants had mutual and running accounts.
16. The requirement of law as per Rule 12(7) of the Debts Recovery Tribunal (Procedure) Rules, 1993 is “If the defendant denies his liability to pay the claim made by the applicant, the Tribunal may act upon the affidavit of the applicant who is acquainted with the facts of the case or who has on vesi-fication of the record sworn the affidavit in respect of the contents of application and the documents as evidence.” The affidavit filed on behalf of the respondent bank remains unrebutted on the record.
17. The next submission made by the counsel for the appellants was that the appellants were not properly served in this case. It was explained that denial of opportunity is patent, explicit and in violation of the principles of natural justice. The ex.-parte order was recorded on 11th May, 2007. No notice was given to the defendants. It is explained that as per Order IX, Rule 6(1)(a) of CPC, notice of ex-parte hearing should have been given to the appellants. In support of his case he has cited a case reported in Sumtibai v. Para Finance Co. Mankanwar W/o Parasmal Chordia (D).3 Its paras 7 and 8 are reproduced as follows:—
“7. Before adverting to the question involved in this case, it may be noted that in the registered sale deed dated 12th August, 1960 the shop in dispute has been mentioned and the sale was shown in favour of Kapoor Chand and his sons, Narainlal, Devilal and Puk-hraj. Hence, the registered sale deed itself shows that the purchaser was not Kapoor Chand alone, but also his sons as co-owners. Hence, prima facie, it seems that the sons of Kapoor Chand are also co-owners of the property in dispute. However, we are not expressing any final opinion on the question whether they are co-owners as that would be decided in the suit. But we are certainly of the opinion that the legal representatives of late Kapoor Chand have a right to take this defence by way of filing an additional written statement and adduce evidence in the suit. Whether this defence is accepted or not, of course, is for the Trial Court to decide. Hence, in our opinion, the Courts below erred in law in rejecting the applications of the heirs of Kapoor Chand to file an additional written statement.
8. Every party in a case has a right to file a written statement. This is in accordance with natural justice. The Code of Civil Procedure is really the rules of natural justice which are set out in great and elaborate detail. Its purpose is to enable both the parties to get a hearing. The appellants in the present case have already been made parties in the suit, but it would be strange if they are not allowed to take a defence. In our opinion, Order XXII, Rule 4(2) of Code of Civil Procedure cannot be construed in the manner suggested by learned Counsel for the respondent.”
18. Counsel for the appellants also argued that this is a mistake on the part of the Court and the appellants should not be made to suffer from this mistake. He has cited the case reported in Rosali V. v. Taico Bank, wherein reliance was placed on well-known legal maxim, “Actus curiae neminem gravabit (in act of Court shall prejudice no man)…”
19. The facts of authority reported in Sumtibai v. Para Finance Co. (supra) are peculiar, different and hardly dovetail with the facts of the instant case
20. I have perused the order-sheets of the lower Court. The case started before the DRT on 6th March, 2002. On 11th July, 2003 postal receipts were filed before the Court. Notices sent to the defendants were not received back. After the expiry of 30 days it was deemed to be proper service. The Registrar of the Court ordered that the matter be put up before the learned Presiding Officer on 12th September, 2003. Further, on 12th September, 2003, one Mr. Prashant Kumar, advocate appeared on behalf of defendant Nos. 1 and 3, namely Shaila Crown Private Limited and Mr. Chandra Prakash. Defendant Nos. 2, 4, 5, and 6 were proceeded against ex.-parte. Written statement was filed by defendant Nos. 1 and 3 on 5th January, 2004. Defendant Nos. 4 and 6, namely, Mrs. S. Sahai and Mrs. Rekha Sanjay also appeared. Their application for setting aside ex-parte was accepted subject to payment of costs of Rs. 900/-. (emphasis supplied). Thereafter, for some time the Presiding Officer did not hold the Court.
21. Vide order dated 13th September, 2005, the Registrar ordered the matter to be put up before the learned Presiding Officer on 5th October, 2005. On 5th October 2005 ??? ???. 12th January, 2006, the Presiding Officer was on leave. The cast was put up for further proceedings on 4th May, 2006.
22. On 4th May, 2006, none appeared on behalf of the defendants. Again, on 2nd August, 2006 and 4th October, 2006 none appeared on behalf of the defendants. On 4th October, 2006 the case was fixed for pronouncement of judgment. On the same day, Mr. Prashant Kumar, advocate, appeared on behalf of defendant Nos. 1 and 3. Application for recalling the ex-parte proceedings was filed. The learned Presiding Officer observed that the application submitted at such stage though cannot be entrained, however, in the interest of justice, as a special case it was taken on record subject to certain conditions viz. they were directed to serve copy of the recall application along with copy of that order on the Manager of applicant bank/its learned counsel against acknowledgement and submit the same (acknowledgement/receipt) in the registry by 11th October, 2006 and to file written statement by that date. On 11th October, 2006 written, statement was filed on behalf of defendants before the Assistant Registrar, and he ordered the parties to appear before the Presiding Officer on 12th October, 2006. On 12th October, 2006, the ex-parte order was set aside and the case was fixed for hearing arguments on 13th October, 2006. On 13th October, 2006 the case was adjourned to 18th December, 2006. It was adjourned to 7th February, 2007 and again to 19th April, 2007. On 19th April, 2007 Mr. Prashant Kumar sought further time to argue the case and the case was fixed for 11th May, 2007. On 11th May, 2007, none appeared on behalf of the defendants and they were proceeded against ex-parte. The case was adjourned to 1st June, 2007 for hearing ex-parte arguments. On 1st June, 2007 none appeared on behalf of the defendants and the case was adjourned for pronouncement of judgment on 9th July, 2007. The ex-parte judgment was pronounced on 9th July, 2007.
23. It was clearly recognized as early as 1866 in Ferguson v. Wilson, that directors are in the eyes of law agents of company. The Court said:—
“The Company has no person; it can only through directors and the case is, as regards those directors, merely the ordinary case of principal and agent.”
24. The Apex Court in another case Malian and Co. v. Wazir Jaiver Chandra, was pleased to observe:—
“The proviso insists that before any amount of rent can be said to be in arrears, a notice has to be serve through post. All that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgement due or otherwise) containing the tenant's correct address. Once he does this and the letter is delivered to the Post Office, he has no control over it. It is then presumed to have been delivered to the addressee under section 27 of the General Clauses Act.”
25. The Hon'ble Apex Court in a recent authority reported in Sunil Poddar v. Union Bank of India, was pleased to hold:
“19. It is, therefore, clear that the legal position under the amended Code is not whether the defendant was actually served with the summons in accordance with the procedure laid down and in the manner pre scribed in Order V of the Code, but whether (i) he had notice of the date of hearing of suit, and (ii) whether he had sufficient time to appear and answer the claim of the plaintiff. Once these two condition: are satisfied, an ex-parte decree cannot be set aside even if it is established that there was irregularity in service of summons. If the Court is convinced that the defen-dant had otherwise knowledge o??? the proceedings and he could have appeared and answered the plaintiff (s) claim, he cannot put forward a ground of non service of sum mons for setting aside ex-parte de cree passed against him by invok ing Rule 13, Order IX of the Code Since the said provision applies t??? Debt Recovery Tribunals and Appellate Tribunals under the Act i??? view of section 22(2)(g) of the Act both the Tribunal were right in observing that the ground raised b??? the appellants could not be upheld It is not even contended by the appellants that though they had knowledge of the proceedings be fore the DRT, they had no suffi cient time to appear and answe the claim of the plaintiff-bank an??? on the ground, ex-parte order de??? serves to be set aside.”
26. Punjab & Haryana High Court i??? case of Ajita Sharma v. Rakesh Kuma Sharma,4 held:
“If a person knows about a pending; case and still ignores the said litigation, it would be wholly unfair for that person to urge that he had not been formally served.”
27. Same view was taken by Chairperson, DRAT, Delhi in case reported in Inrays v. State Bank of India,
28. It is thus clear that in this case the appellants have not approached the Court with clean hands and they have no qualms in telling untruth before this Court. The Hon'ble Supreme Court in the case reported in S.P Chengalvaraya Naidu (dead) by LRs. v. Jagannath (dead) by L.Rs, was of the view:—
“The principle of finality of litigation cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The Courts of Law are meant for imparting justice between the parties. One who comes to the Court, must come with clean hands. We are constrained to say that more often than not, process of the Court is being abused. Property-grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the Court process a convenient lever to retain the illegal gains indefinitely. We have no hesitation to say that a person whose case is based on falsehood, has no right to approach the Court. He can be summarily thrown out at any stage of litigation.”
29. Similar view was taken by Apex Court in a recent authority reported as Prestige Lights Ltd. v. State Bank Of India. of India.
30. This appeal was filed against interlocutory order delivered under section 22(2)(g) of the RDDBFI Act, 1993 and as such the appellants are not required to pay the Court-fees on the decretal amount. They have already paid Court-fees in the sum of Rs. 250/-.
31. The whole gamut of the above said facts and circumstances leans on the side of the bank. The appellants have no case. Both the cases are dismissed in limine
32. Another original judgment be placed on the connected file.
Appeals Dismissed.