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Baishnab Charan Bagudai Vs. Official Liquidator, Puri Bank Ltd. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Banking
CourtOrissa High Court
Decided On
Case NumberM.J.C. No. 20 of 1959
Judge
Reported inAIR1961Ori67
ActsBanking Companies Act, 1949 - Sections 45D(3) and 45D(9); Code of Civil Procedure (CPC) - Order 5, Rule 20
AppellantBaishnab Charan Bagudai
RespondentOfficial Liquidator, Puri Bank Ltd.
Appellant AdvocateS.C. Roy, Adv.
Respondent AdvocateU.N. Rath and J. Rath
Excerpt:
.....1958, the judgment-debtor one baishanab charan bagudai is the petitioner for setting aside an ex parte decree passed against him by this court on april 26, 1957 purported to have been made under section 45-d of the banking companies act, 1949, mainly on the ground that the summons was not served on him and that the said decree was passed without his knowledge and that he had, on merits, a good defence to the claim of the opposite party puri bank ltd. 3. on the merits, according to the judgment-debtor, he has a good defence to the claim of the bank. bhattachargee as his brain is not in good order rs. bhatta-charjee as his brain is not in good order. for the present purpose i am satisfied that the judgment-debtor has prima facie a good defence to the claim of the bank on merits. in any..........1958, the judgment-debtor one baishanab charan bagudai is the petitioner for setting aside an ex parte decree passed against him by this court on april 26, 1957 purported to have been made under section 45-d of the banking companies act, 1949, mainly on the ground that the summons was not served on him and that the said decree was passed without his knowledge and that he had, on merits, a good defence to the claim of the opposite party puri bank ltd. (hereinafter referred to as the bank).2. the matter arose under the following circumstances : the judgment-debtor baishnab charan bagudai, who is now a teacher in a middle english school at jharadihi in the district of mayurbhanj, had previously a small member business in the town of balasore where he opened an account with the bank at its.....
Judgment:
ORDER

S. Barman, J.

In this application, arising out of a Company Act Case No. 4 of 1957 and Execution Case No. 79 of 1958, the judgment-debtor one Baishanab Charan Bagudai is the petitioner for setting aside an ex parte decree passed against him by this Court on April 26, 1957 purported to have been made under Section 45-D of the Banking Companies Act, 1949, mainly on the ground that the summons was not served on him and that the said decree was passed without his knowledge and that he had, on merits, a good defence to the claim of the opposite party Puri Bank Ltd. (hereinafter referred to as the Bank).

2. The matter arose under the following circumstances : The judgment-debtor Baishnab Charan Bagudai, who is now a teacher in a Middle English School at Jharadihi in the district of Mayurbhanj, had previously a small member business in the town of Balasore where he opened an account with the Bank at its Balasore branch for occasional accommodation to him in his said business. It is said that as the business did not flourish, the said judgment-debtor closed it and left the town of Balasore in May 1945; thereafter the judgment-debtor had no occasion to carry on the timber business or operate on his over draft account; that at the time when the judgment-debtor left the town of Balasore nothing was outstanding against him in the account -- it is alleged on the contrary that the judgment-debtor had a balance to his credit.

In 1948 the Bank went into liquidation. In 1954 the Official Liquidator filed a list of debtors including the said Baishnab Charan Bagudai for settlement of the list of debtors under Section 45-D (3) of the Banking Companies Act, 1949, claiming from him a sum of Rs. 13,029/13/6 with interest as calculated up to March 31, 1954. From July 195$, there was an attempt to serve notice on the judgment-debtor by registered post addressed to him at his home address -- village Ajodhya, P. O. Raj Nilgiri, District Balasore, -- which however appears to have been redirected to other addresses where, it appears, he was an Assisitant Teacher in a certain school. The registered notice with acknowledgment due issued to him was received back unserved as he was found absent.

On 15-1-1957, there was an order for issue of fresh notice to the judgment-debtor to his address which appears to have been supplied by the Bank and accordingly notice was issued to his address as Teacher, Baripada High English School, P. O. Baripada, Dist. Mayurbhanj. In February 1957, the said registered notice appears to have been received back unserved as it was reported that no such man was found at the address. Ultimately on March 27, 1957 the Bank obtained an order from this Court for issue of notice under Order 5, Rule 20 Civil Procedure Code as prayed for and accordingly notice was issued to the Munsif of Balasore for service fixing April 1, 1957 for return of service. Thereafter the service return was received with the note that the summons under Order 5, Rule 20 had been served properly as reported by the Process server and hence the service was considered sufficient.

In due course the matter came up before this Court for hearing and an ex parte decree was passed as aforesaid. This relevant portion of the order passed on April 26, 1957 so far as necessary for the present purpose is set out as follows:

'The opposite party was given notice by registered post which could not be served on him. Notice was ordered by substituted service which was duly effected. The opposite party is absent and is declared ex parte ........'

The judgment-debtor's explanation for his non-appearance at the said hearing was this: He, to his surprise, received a notice of execution, presumably in execution of the said decree in Execution Case No. 73 of 1958, fixing the date of his appearance on December 15, 1958; that as he was ill at that time he could not appear on that date and gent an express telegram to the Registrar of this Court to that effect and also sent a registered letter which was acknowledged on December 16, 1958 praying for fixing another date for his appearance; that he received no further communication from this Court and therefore entered appearance through an Advocate in the said Execution Case No. 73 of 1958 on April 15, 1959 : thereafter the petitioner's advocate went through the records and for the first time found that notice was taken on him in the said case in which the ex parte decree was passed, namely, M. J. C. No. 50 of 1956 on July 20, 1956 at his home address, village Ajodhya, P. O. Raj Nilgiri, Dist. Balasore, as aforesaid, which he had left since June 1955 and consequently no notice could be served on him; that again on January 21, 1957 at Baripada High School all which address the petitioner never stayed nor served and consequently the notice could not be served on him; and that thereafter substituted service under Order 5, Rule 20 was taken out on him on March 247; 1957 which was considered sufficient by this Hon'ble Court on April 23, 1957 and an ex parte decree was passed on April 26, 1957.

The judgment-debtor's grievance in substance, is that the notice of the original claim by the Bank was never taken at the correct address of the judgment-debtor; that from the return of first service it was known to the Bank that the judgment-debtor was serving as a teacher in some school; that the service of notice of the original claim by the Bank in M. J/C. 50 of 1956, on which the ex parte decree was passed as aforesaid, could thus be easily effected in the ordinary way through the D. I. of Schools under whom the judgment-debtor was throughout serving, which course the Bank in fact took in serving the notice of execution in Execution Case No. 73 of 1958 which was started after obtaining the ex parte decree against the judgment-debtor; thus there was no necessity for substituted service as the judgment-debtor never avoided service.

3. On the merits, according to the judgment-debtor, he has a good defence to the claim of the Bank. The judgment-debtor filed a further affidavit on January 25, 1960 by way of petition praying for allowing his application on merits and vary the list so far as it concerns the judgment-debtor, under Section 45-D (9) of the Banking Companies Act. In support of his contention Mr. S. C. Roy, learned counsel for the judgment-debtor petitioner, relied on paragraphs 9 to 16 of the said petition dated January 25, 1960 filed herein.

It is alleged that one Sri K. B. Bhattacharjee (full name stated to be Sri Rajani Ballav Bhattacharjee), who was at the time the Manager and the Secretary of the Balasore Branch of the Bank, had misappropriated certain moneys amounting to over Rs. 7,000/- In this context, certain entries in the ledger of the Balasore Branch of the Bank, on which the judgment-debtor strongly relied, are set out in paragraph 9 of his petition and are quoted as follows:

1.1-6-1945Amount debited for purchasing timber to R. B. Bhaitacharjee for B. C. Bagudai.Rs. 2154-8-02.17-5-1946Amount debited for purchasing 500 Cit. Sal Wood to Sri R. B. Bhattachargee as his brain is not in good order.Rs. 3000-0-03.24-5-1946Amount debited for purchasing 500 Cft. Sal Wood to Sri R. B. Bhatta-charjee as his brain is not in good order...Rs. 2000-0-0

Total...Rs. 7154-8-0.

These, indeed, are entries which on the face of them require explanation by the Bank. I do not, at this stage, express any opinion on this aspect of the case which, however, directly relates to the merits of the defence. For the present purpose I am satisfied that the judgment-debtor has prima facie a good defence to the claim of the Bank on merits.

4. On the question, whether there was sufficient cause by which the judgment-debtor was prevented from appearing on the date for settlement of the claim against the judgment-debtor, having regard to the background and the surrounding circumstances, it appears that the Bank could have served the summons on the judgment-debtor through the appropriate authority of the school, where he, to the knowledge of the Bank, was a teacher. Moreover, the circumstance,-- that in fact the Bank ultimately at the stage of execution of the decree, which it obtained ex parte, had the notice of execution served through the D. I. of Schools,-- strengthens the judgment-debor's contention that this course of service through the school authorities could also have been taken in connection with the service of summons in the original claim case in M. J. C. No. 50 of 1956 in which the ex parte decree was passed.

It is not that there was any motive on the part of the Bank in choosing a particular course of service in the manner it did. All that can certainly be said is that it was a vital omission on the part of the Bank not to serve the summons on the judgment-debtor through the school authorities which would have been the normal course. However, the fact remains that the judgment-debtor had no opportunity of defending the original claim against him in M. J. C. No. 50 of 1956 and there was indeed sufficient cause by which he was prevented from appearing on the date fixed for hearing as he did not receive the summons as aforesaid.

5. Mr. J. Rath, learned counsel for the official liquidator of the Bank,-- while placing the objection petition made on behalf of the official liquidator dated February 11, 1960,-- challenged the maintainability of the judgment-debtors application under the Banking Companies Act, on the grounds mentioned in his petition. Section 45-D (9) of the Act is this:

'In any case in which any such list is settled ex parte as against any person, such person may, within thirty days from the date of the order settling the list, apply to the High Court for an order to vary such list, so far as it concerns him, and if the High Court is satisfied that he was prevented by any sufficient cause from appearing on the date fixed for the settlement of such list and that he has a good defence to the claim of the Banking Company on merits, the High Court may vary the list and pass such orders in relation thereto as it thinks fit.

Provided that the High Court may, if it so thinks fit, entertain the application after the expiry of the said period of thirty days.'

Having regard to the judgment-debtor's further petition made on January 25, 1960, praying for variation of the list so far as it concerns him (referred to above), I do not think that this contention made on behalf of the Bank is tenable in law. I am satisfied that the present application is substantially an application under Section 45-D (9) of the Act as quoted above. It is the substance and not merely the form which has to be kept in view. Composite character of Section 45-D (9) must be noticed in that the variation of the list of debtors entails the setting aside of the ex parte decree already passed; there cannot be any variation until and unless the decree already passed ex parte is set aside; accordingly the setting aside of the decree is only incidental and ancillary to the variation which is the purpose of Section 45-D (9).

6. It was also contended on behalf of the Bank that the judgment-debtor's petition filed on May 8, 1959 was barred by time and that the petition filed on August 11, 1959 under Section 5 of the Limitation Act to condone the delay is not maintainable in law and further that this Court has got no jurisdiction to condone the delay under Section 5 of the Limitation Act on the ground that the said section is not applicable to the present proceedings, The judgment-debtor appears to rely on the petition,-- supported by authority,-- that in equity no length of time will run td protect or screen fraud -- the right of the party defrauded to have the transaction set aside is not affected by lapse of time, so long as he remains, without any fault of his own, in ignorance of the fraud which has been committed (Kerr on Fraud and Mistake, 5th Edition, Pages 15-16).

On this point it must be noticed that there is a proviso to Section 45-D (9) quoted above that the High Court may, if it so thinks fit, entertain the application after the expiry of the said period of thirty days from the date of the order settling the list within which the application has to be made for varying such list settled ex parte as against any person. Thus the Court is given discretion, in a fit case, to entertain such an application even after the expiry of the period of limitation fixed by the section. On the facts and in the circumstances of this case, I am satisfied that this is a fit case where the judgment-debtor should be given the benefit of the proviso to Section 45-D (9) of the Ranking Companies Act and thus he is entitled to the extension of the period for making 'the application.

The circumstance which, as I have already indicated, weighed in deciding this case is that prima facie the judgment-debtor has a good defence to the claim, particularly in view of the said three items of debit entries in the Bank's ledger, to which the official liquidator in his objection petition filed on' February 11, 1960, could not give any immediate reply. The Official Liquidator states that, in the absence of necessary instructions from the Secretary, who was in charge of the Balasore branch of the Bank and who is alleged to have drawn the three items of money as aforesaid which had been deposited by the judgment-debtor,-- the official liquidator is not in a position to give further details about the disputed amounts. The Official Liquidator further states that in spite of several letters to the said Branch Secretary to explain the situation he turned a deaf ear. Thus, it is quite clear on the petition of the Official Liquidator itself that this claim requires reconsideration on merits.

7. In this view of the matter, the ex parte decree passed by this Court on April 26, 1957 in the original claim case -- M. J. C. No. 50 of 1956 --is set aside.

8. In this connection the official liquidator on February 11, 1960 filed two petitions, one under Order 16, Rule 1 and Section 151, Civil Pro. Code for a, direction on the judgment-debtor to produce the papers referred to in the said petition; and the other being under Order 1, Rule 10 and Section 151 Civil Procedure Code for making the said Branch Secretary Sri Rajani Ballav Bhattacharjee of Nayabazar, Balasore Town, as a party, for the reasons stated in the said petition. Now that the claim against the judgment-debtor has to be reconsidered, on merits, it is necessary that all the relevant papers must be before the Court as prayed for and also that the said Branch Secretary Sri Rajani Ballav Bhattacharjee be made a party. Accordingly I make order in both the said petitions filed on February 11, 1960 that the judgment-debtor Baishnab Charan Bagudai do produce all the papers mentioned in the petition as prayed for and further that the said Branch Secretary Sri Rajaniballav Bhattacharjee of Nayabazar, Balasore Town be made a party for the determination of the real matter in dispute; and accordingly steps be taken according to law.

9. Costs will abide the result on reconsideration on merits.


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