# Sheo Murat Yadav & Anr v. Debts Recovery Appellate Tribunal & Ors

- **Citation:** (2014) 1 ILRA 229
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2013-12-16
- **Bench:** Tarun Agarwala
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sheo-murat-yadav-anr-v-debts-recovery-appellate-tribunal-ors-42909
- **Pages:** 4

## Headnote

Financial Institutions Act 1993-Section
22(g)-
Recall
application
petition
dismissed in absence of counsel-condition
to deposit of 30% of amount-wholly
arbitrary,
held-onerous-unsustainablequashed.
230 INDIAN LAW REPORTS ALLAHABAD SERIES
Held: Para-9
In the light of the aforesaid, the Court
finds that the direction of the Tribunal
imposing a predeposit of 30% of the
claimed amount, which has not as yet
been adjudicated on merits nor any
decree has been passed could not be
imposed
upon
the
petitioner.
Such
onerous conditions is contrary to the
provisions of Section 22(2)(g) of the Act
of 1993. Such onerous conditions is
wholly arbitrary and harshly excessive
quite apart from being unreasonable
and, therefore, the impugned order
cannot be sustained.

Case Law discussed:
AIR 1964 SC 993; AIR 2002 SC 2082; 2006(9)
Scale 223; AIR 1964 SC 993; AIR 2002 SC
2082; 2012(2) DRTC 829(Mad); W.P. No. 1987
of 2013.

## Text

1 All] Sheo Murat Yadav & Anr. Vs. Debts Recovery Appellate Tribunal & Ors.
229
so
as
to
give
correct
information
regarding progress in District Badaun and
thereupon
Minister
concerned
felt
annoyed
and
decided
that
officer
concerned i.e. petitioner, who has sent
Gopal Ram, without proper briefing must
be placed under suspension and it is in
furtherance thereof and complying the
said decision of Minister concerned,
impugned order of suspension was passed
by him (Sri Ram Singh, Director). This
statement fortify what I have already
discussed above.

19. When enquired Sri Ram Singh,
respondent no.1 said that he has nothing
further to say in the matter since what
actually has been done by him he has said
in his affidavit.

20. In my view, the way and the
manner in which Sri Ram Singh, Director
has functioned in discharge of his
statutory duties, has shown very candidly
that at least he is not a person fit to hold
such responsible office since he is
amenable to surrender his statutory
functions to the command of third parties,
who have no role in law and also unaware
of his own duties and responsibilities as
also the manner in which he is supposed
to proceed. Such a person therefore,
should not be assigned such important
office and deserve to be posted in an
office where such independent exercise of
power is not required to be performed by
him. The State Government, therefore,
shall look into the matter forthwith and
take appropriate action without any
further delay and in any case within 15
days from the date of communication of
this judgment.

21. Subject to the above directions
and also in the context of discussion made
above,
it
cannot
be
doubted
that
impugned order of suspension deserve to
be quashed.

22. The writ petition is accordingly
allowed.
The
impugned
order
of
suspension dated 27.8.2013 (Annexure 4
to the writ petition) is hereby set aside.
The petitioner shall be entitled to all
consequential benefits and also a cost,
which I quantify to Rs.25,000/-. At the
first instance the cost shall be paid to the
petitioner by State of U.P. but it shall
have liberty to recover the same from the
concerned
appointing
authority
who
forgot its statutory duty while passing the
order impugned in the writ petition, which
has been set aside hereat after making
such inquiry, as permissible in law.
--------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 16.12.2013

BEFORE
THE HON'BLE TARUN AGARWALA, J.

Civil Misc. Writ Petition No. 67335 Of
2013

Sheo Murat Yadav & Anr.... Petitioners
Versus
Debts Recovery Appellate Tribunal & Ors.....
 ...Respondents

Counsel for the Petitioners:
Sri Sanjay Kumar Gupta, Sri Anirudh
Pandey

Counsel for the Respondents:
Sri K.M. Asthana, Sri Satish Chaturvedi

Recovery of Debts due to Banks and
Financial Institutions Act 1993-Section
22(g)-
Recall
application
petition
dismissed in absence of counsel-condition
to deposit of 30% of amount-wholly
arbitrary,
held-onerous-unsustainablequashed.
230 INDIAN LAW REPORTS ALLAHABAD SERIES
Held: Para-9
In the light of the aforesaid, the Court
finds that the direction of the Tribunal
imposing a predeposit of 30% of the
claimed amount, which has not as yet
been adjudicated on merits nor any
decree has been passed could not be
imposed
upon
the
petitioner.
Such
onerous conditions is contrary to the
provisions of Section 22(2)(g) of the Act
of 1993. Such onerous conditions is
wholly arbitrary and harshly excessive
quite apart from being unreasonable
and, therefore, the impugned order
cannot be sustained.

Case Law discussed:
AIR 1964 SC 993; AIR 2002 SC 2082; 2006(9)
Scale 223; AIR 1964 SC 993; AIR 2002 SC
2082; 2012(2) DRTC 829(Mad); W.P. No. 1987
of 2013.

(Delivered by Hon'ble Tarun Agarwala, J.)

1. Since a pure question of law
arises for consideration, the writ petition
is disposed of at the admission stage itself
after hearing the counsel for the parties
without calling for a counter affidavit.

2. It transpires that the bank filed
original application for recovery of Rs.43
Lacs before the Debts Recovery Tribunal
from the petitioner, who is the borrower.
Notices were issued, which were duly
served
and,
the
petitioner
entered
appearance by filing a vakalatnama of an
Advocate, who was granted time to file
written statement. It transpires that the
Advocate did not appear nor filed the
written statement and, accordingly, the
Tribunal issued an order dated 8th
November, 2012 to proceed ex parte
against the petitioner. The petitioner filed
a recall application under Section 22(2)(g)
of the Recovery of Debts Due to Banks
and Financial Institutions Act, 1993
(hereinafter referred to as the Act of
1993)for the recall of the ex parte order.
The Tribunal, by an order dated 6th July,
2013 allowed the application and recalled
its order dated 8th November, 2012 but,
while
doing
so,
imposed
certain
conditions, namely, that the petitioner
would deposit 30% of the total amount
claimed by the bank within 15 days in the
shape of fixed deposit receipts and, only
on the deposit of this amount, the
petitioner would be permitted to file the
written statement.

3. Since the conditions were not
accepted by the petitioner, as being
onerous, the petitioner preferred an appeal
under Section 20 of the Act of 1993,
which was rejected by the Appellate
Tribunal holding that the Tribunal had the
power
to
impose
such
terms
and
conditions other than cost and that the
order was in consonance with the
judgment of the Supreme Court in Arjun
Singh Vs. Mohindra Kumar and others,
AIR 1964 SC 993, Vijay Kumar Madan
and others Vs. R.N. Gupta Technical
Education, AIR 2002 SC 2082 and Tea
Auction Ltd. Vs. Grace Hill Tea Industry
and another 2006 (9) Scale 223. The
Appellate Tribunal held that imposition of
such terms of depositing part of the
proposed decreetal amount was not to
penalize the petitioner but to prevent
dilatory tactics. The Appellate Tribunal
accordingly, rejected the appeal. A review
application was filed, which was also
rejected. The petitioner, being aggrieved,
has filed the present writ petition.

4. Having heard the learned counsel
for the parties at some length, the Court
finds that the Tribunal as well as the
Appellate Tribunal fell in error in
interpreting the provision of Order 9, Rule
7 with that of Order 9, Rule 13 of the
1 All] Sheo Murat Yadav & Anr. Vs. Debts Recovery Appellate Tribunal & Ors.
231
Code of Civil Procedure. Section 22(2)(g)
of the Act of 1993 gives power to the
Tribunal as well as the Appellate Tribunal
to recall an order passed by it ex parte,
which provision is pari materia with the
provisions of Order 9, Rule 7 of the Code
of Civil Procedure. The distinction
between Order 9, Rule 7 and Order 9,
Rule 13 of the Code of Civil Procedure
has to be drawn out and, for facility, the
said provision are extracted hereunder:-

"Order 9, Rule 7.- Procedure where
defendant appears on day of adjourned
hearing and assigns good cause for
previous non-appearance.- Where the
Court has adjourned the hearing of the
suit ex parte, and the defendant, at or
before such hearing, appears and assigns
good cause for his previous nonappearance, he may, upon such terms as
the Court directs as to costs or otherwise,
be heard in answer to the suit as if he had
appeared on the day fixed for his
appearance.

Order 9, Rule 13.-Setting aside
decree ex parte against defendant.- In any
case in which a decree is passed ex parte
against a defendant, he may apply to the
Court by which the decree was passed for
an order to set aside; and if he satisfies
the Court that the summons was not duly
served, or that he was prevented by any
sufficient cause from appearing when the
suit was called on for hearing, the Court
shall make an order setting aside the
decree as against him upon such terms as
to costs, payment into Court or otherwise
as it thinks fit, and shall appoint a day for
proceeding with the suit;

Provided that where the decree is of
such a nature that it cannot be set aside
as against such defendant only it may be
set aside as against all or any of the other
defendants also:

[Provided further that no Court shall
set aside a decree passed ex parte merely
on the ground that there has been an
irregularity in the service of summons, it
it is satisfied that the defendant had notice
of the date of hearing and had sufficient
time to appear and answer the plaintiff's
claim]"

5. The words used in Order 9, Rule 7 of
the Code of Civil Procedure is "good cause"
whereas the words used in Order 9, Rule 13
indicates "sufficient cause". The difference is
subtle yet distinct. The Court is of the opinion
that the burden to discharge under Order 9,
Rule 7 of the Code of Civil Procedure is
lighter than the burden under Order 9, Rule
13. Further, Order 9, Rule 13 of the Code of
Civil Procedure provides not only for
payment of cost but "payment in the Court or
otherwise as it thinks fit". The words
"payment in the court" is other than cost,
which is not spelt out in Order 9, Rule 7. The
words "or otherwise as it thinks fit" is also not
existing under Order 9, Rule 7 of the Code of
Civil Procedure, though the word "otherwise"
is indicated under Order 9, Rule 7.

6. Consequently, the words "upon
such terms as the Court directs as to cost
or otherwise" as depicted under Order 9,
Rule 7 has a narrower meaning than the
words "upon such terms as to costs,
payment into Court or otherwise" as it
thinks fit" as depicted under Order 9, Rule
13 of the Code of Civil Procedure.

7. The Supreme Court in Arjun Singh
Vs. Mohindra Kumar and others, AIR 1964
SC 993 held that the Court cannot exercise its
power to put the defendant on such terms as
may have the effect of prejudging the
controversy involved in the suit and virtually
decreeing the suit though the ex parte order
has been set aside or to put the parties on such
232 INDIAN LAW REPORTS ALLAHABAD SERIES
terms as may be too onerous. The Supreme
Court held that cost should be assessed that
would reasonably compensate the plaintiff for
the loss of time and inconvenience caused by
relegating back the proceedings of the case to
an earlier stage. The Supreme Court held that
the provision of Order 9, Rule 7 of the Code
of Civil Procedure is basically to ensure the
orderly conduct of the proceedings by
penalizing improper dilatoriness calculated
merely to prolong the litigation. Ensuring
orderly conduct of the proceedings by
penalizing improper dilatoriness can only be
done by imposition of cost or otherwise but it
cannot be interpreted to mean that the word
"otherwise" would also include imposition of
the amount claimed, which has not as yet
fructified by way of a decree or order. The
decision of the Supreme Court in Arjun
Singh's case (supra) was reiterated in Vijay
Kumar Madan and others Vs. R.N. Gupta
Technical Education, AIR 2002 SC 2082 and
in Tea Auction Ltd. Vs. Grace Hill Tea
Industry and another 2006 (9) Scale 223 has
followed the same view.

8. In Moin Leather Wear Exports and
others Vs. Oriental Bank of Commerce,
Chennai, 2012 (2) DRTC 829 (Mad.) a
Division Bench of the Madras High Court
was faced with a similar situation. The
Division Bench held that such conditions of
predeposit could not be exercised while
setting aside an ex parte order, inasmuch as
such conditions is onerous and that an
attempt was being made to recover the
amount without taking up the matter on
merits. Similar view was again reiterated by
another Division Bench of the Gwalior
Bench of Madhya Pradesh High Court in
Alok Saboo and others Vs. State Bank of
India and others in Writ Petition No.1987
of 2013 decided on 13th September, 2013.

9. In the light of the aforesaid, the Court
finds that the direction of the Tribunal
imposing a predeposit of 30% of the claimed
amount, which has not as yet been adjudicated
on merits nor any decree has been passed
could not be imposed upon the petitioner.
Such onerous conditions is contrary to the
provisions of Section 22(2)(g) of the Act of
1993. Such onerous conditions is wholly
arbitrary and harshly excessive quite apart
from being unreasonable and, therefore, the
impugned order cannot be sustained.

10. For the reasons stated aforesaid,
the order of the Tribunal, the order of the
Appellate Tribunal and the order passed in
review application are patently erroneous and
are quashed. The writ petition is allowed.
The recall application of the petitioner is also
allowed subject to payment of cost of
Rs.20,000/-, which shall be paid by the
petitioner to the respondent-bank on or
before the 31st December, 2013. If such
amount is paid and proof is filed before the
Debts Recovery Tribunal, the petitioner
would be permitted to file the written
statement on or before 15th January, 2014. It
is made clear that no further time would be
allowed to the petitioner.
--------

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.12.2013

BEFORE
THE HON'BLE SUDHIR AGARWAL, J.

Civil Misc. Writ Petition No. 67672 of 2013

Rajesh Mahajan..... .Petitioner
Versus
State of U.P. and Ors.... Respondents

Counsel for the Petitioner:
Sri Ajay Sengar

Counsel for the Respondents:
C.S.C.