UNICO LEASING LTD. AND ORS. Vs. UCO BANK

JUDGEMENT

(1.) THE Respondent -bank granted loan facility to Petitioner No. 1. Late Sh. R.L. Jain (represented through LRs (a), (b) and (c) as Petitioner No. 2), Petitioner No. 3 and Petitioner No. 4 are stated to be erstwhile directors of Petitioner No. 1 who stood guarantee for the loan. The loan was in the form of a cash credit limit of Rs. 70 lacs granted in August, 1989. The limit was enjoyed by Petitioner No. 1 but the amount was not being paid. The debt was acknowledged from time to time. On 30.09.1992 the debt was acknowledged at Rs. 1,02,57,164 vide its acknowledgement of debt dated 14.01.1993. The OA was ultimately filed before the Debt Recovery Tribunal in 1997.

(2.) IN terms of order dated 05.09.1997 summons and notices were directed to be issued to the Respondent in the OA. It was specifically directed "it shall be the duty of the applicant bank to get the Defendants served by registered post and ordinary post. A copy of this order, OA and documents be also sent alongwith summons and notice."

(3.) THE Petitioners filed an application under Order 9 Rule 7 of the Code of Civil Procedure, 1908 (in short "CPC") for setting aside ex -parte order dated 18.02.1998 and in the alternative an application under Order 9 Rule 13 of the Code of Civil Procedure to set aside the judgment/decree dated 23.03.1998. This application is dated 28.08.1998. The Petitioners stated in the application that they came to know about the pending adjudication being listed for 23.09.1998 on 22.09.1998 from the office of the bank, and thus appeared through counsel before the Tribunal on 23.09.1998. Nothing is stated as to how and why the Petitioners were suddenly informed about the recovery proceedings. It is further stated that the Petitioners were not served with the summons/notices in any manner. Other than this, nothing material has been set out in the application.