S P NARASIMHAN Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) PETITIONERS to the Civil Revision Petition, i.e., Directors of Uni Organic Industries Limited (hereinafter referred to as Company), are the guarantors. The respondent/Punjab National Bank (hereinafter referred to as Bank) is the financial institution which filed an Application i.e., O.A. No.87 of 1997, under Section 19 of Recovery of Debts Due to Banks & Financial Institutions Act, 1993, before the Debts Recovery Tribunal-1, Chennai, (in short, D.R.T.) for recovery of a sum of Rs.2,81,18,129.40. An ex parte order was passed in the said proceedings by the D.R.T. Steps were taken by the judgment debtors to set aside that ex parte order. As there was a delay of 125 days in filing the said Application, I.A. Nos.1079 to 1090 of 2001 came to be filed. After hearing the parties, the D.R.T. passed a common order allowing all the Applications on condition that the petitioners deposit a sum of Rs.1,00,00,000/- with the Decree Holder/Bank. The common order was challenged before the Debts Recovery Appellate Tribunal (in short, Appellate Tribunal) in M.A. No.137 of 2003. The Appellate Tribunal, by its order dated 10th February, 2004, allowed the appeal in part by bringing down the sum to be deposited as Rs.75,00,000/-. As against the aforesaid order, the present Revision has been filed.

(2.) INITIALLY, the Revision Petition was allowed by the Division Bench by its order dated 12th May, 2004 and the petitioners were relieved from the obligation of depositing Rs.75,00,000/- as ordered by the Appellate Tribunal. Aggrieved over the same, the Bank preferred the Review Application in question. By its order dated 24th March, 2005, though the Court noticed the fact that the amount had to be deposited not by the Company in liquidation but by the Directors of the Company ie., the petitioners herein, who were the guarantors, however observed that the Court could not change its order merely because it had made a mistake in appreciating the facts of the case. Both the aforesaid orders dated 12th May 2004 and 24th March 2005, passed in the Civil Revision Petition and the Review Application respectively, were set aside by the Supreme Court by order dated 7th March, 2007 in Civil Appeal No.1190 of 2007.

(3.) SO far as the Civil Revision Petition is concerned, learned counsel for the petitioners submitted that the common order, dated 30th April, 2003, by which the D.R.T. directed the petitioners to pay a sum of Rs.1,00,00,000/-, amounts to passing the decree in part without hearing the parties. The Appellate Tribunal, without taking notice of the same, had merely reduced the amount from Rs.1,00,00,000/- to Rs.75,00,000/-. According to the learned counsel, a careful perusal of the provisions of law would suggest that the D.R.T. should not have passed the ex parte order without the Official Liquidator having been impleaded as a party to the proceedings and without prior permission of the B.I.F.R. (Board of Industrial and Financial Reconstruction).