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Coal India Ltd. Vs. Central Bank of India and ors. - Court Judgment

LegalCrystal Citation
CourtDRAT Kolkata
Decided On
Judge
Reported inI(2007)BC173
AppellantCoal India Ltd.
RespondentCentral Bank of India and ors.
Excerpt:
.....learned advocate for the petitioner, there is no definite monetary claim against the petitioner coal india, ltd., the judgment and order was also ex parte. it is further submitted that the appellant is a government company wholly owned by the central government. thus, in view of this position, it is submitted on behalf of the petitioner.coal. india ltd., that the provision of section 21 for the mandatory pre-deposit is not at all applicable and accordingly no deposit under section 21 of the rddbfi act. 1993, need be made.3. as for the stay application, it is submitted by the learned advocate for the appellant that the matter is urgent and an order of stay is necessitated because of the fact that the recovery officer passed an order with a direction to pay the decretal dues failing.....
Judgment:
1. The matter relates to an application by the petitioner/appellant, Coal India Ltd., under Section 21 of the RDDBFI Act, 1993, praying for waiver of the mandatory pre-deposit of the 75% of the amount due on debt together with an application for stay.

2. It has been submitted by the learned Advocate for the petitioner that the petitioner/appellant filed this appeal against an order passed ex parts against the petitioner and others on 10th May, 1999 whereon the learned Tribunal below had recorded the findings that none of the defendants appeared to contest the suit despite service of notices and paper publication and therefore the suit was taken up for ex parte hearing. It was further recorded that the conduct of the defendants in not appearing to contest the suit before the Tribunal was indicative of the fact that they did not dispute the claim of the applicant-Bank and that, therefore outstanding claim of the applicant-Bank was allowed ex parte with costs alongwith interest pendents lite and future at contractual rate and certificate was issued accordingly calling upon the Recovery Officer, D.R.T., Patna, for execution. According to the learned advocate for the petitioner, there is no definite monetary claim against the petitioner Coal India, Ltd., the judgment and order was also ex parte. It is further submitted that the appellant is a Government company wholly owned by the Central Government. Thus, in view of this position, it is submitted on behalf of the petitioner.

Coal. India Ltd., that the provision of Section 21 for the mandatory pre-deposit is not at all applicable and accordingly no deposit under Section 21 of the RDDBFI Act. 1993, need be made.

3. As for the stay application, it is submitted by the learned advocate for the appellant that the matter is urgent and an order of stay is necessitated because of the fact that the Recovery Officer passed an order with a direction to pay the decretal dues failing which all accounts maintained with any Bank by Coal India Ltd., shall be liable for attachment that if this is done the petitioner/appellant. Coal India Ltd. shall suffer irreparable loss and injury. Hence, a prayer has been made for an order of injunction restraining the said Recovery Officer from proceeding any further in R.P. No. 7 of 2002 till the disposal of the instant appeal.

4. In reply, it has been contended by the learned advocate for the respondent Bank that, no payment has since been received from the Commissioner of Payment by the respondent-Bank and that since all assets and liabilities vest with the appellant, Coal India Ltd., after nationalization of Coal Mines, the petitioner-appellant has an obligation in paying the dues outstanding in the account of respondent No. 2 with interest, costs and expenses. It has been further contended that decree was passed against the petitioner-appellant anyway though the same is an ex parte decree and that the appellant is required to make the mandatory pre-deposit under Section 21 of the said Act. It is further contended that as a Government company fully owned by the Central Government, the appellant has the obligation to immediately pay the certificate dues and that the fact that the Coal India belongs to the Central Government must not make any difference. It is further submitted that the petitioner is not entitled to get any interim stay at this stage to frustrate the proceeding before the Recovery Officer which in effect shall cause delay in realization of dues of the Bank.

5. I have perused and considered the materials on record including the impugned order passed by the learned Tribunal below. I have also given my mind to the respective submissions of the learned advocates for the both sides.

6. In the first place. Section 21 of the RDDBFI Act. 1993, is plainly not applicable in this case. The point is, the impugned order was an ex parte order passed by the learned Tribunal below. The setting aside of an ex pane decree ordinarily entails only the limited merits of the matter separate from the main issue or the application for true determination of the debt dues such as, whether the ex parte decree was passed without proper service on the defendants or the non-appearance of the defendants on the particular day of hearing of the main application, which the defendant might later on adequately explain and succeed in getting the said ex parte order or decree set aside and then contest the application on merit thereby leading to the real determination of the debts due. So, in my opinion in this matter of appeal for setting aside an ex parte decree, Section 21 of the RDDBFI Act is not truly applicable to fasten the applicant/appellant with the liability for the pre-deposit as envisaged under Section 21 of the Act.

Because of this reason, Section21 of the Act applies to those appeals only where the order determining the debt, either under Section 19(2) of the Act of under Rule 12(5) of the D.R.T. (Procedure) Rules, 1993 directing the defendants to pay the amount, has been challenged.

7. This is also the line of the decision and pronouncement in two decisions of the D.R.A.T., Delhi, in Kailash Chand Nagpal v.Corporation Bank II (2004) BC 1 (DRAT) : 2004 (1) Bank C.L.R. 416 (DRAT, Delhi) and Smt. Motia Rani v. Punjab National Bank, I (2004) BC 170 (DRAT) : 2004 (1) Bank C.L.R. 352 (DRAT, Delhi).

8. Accordingly, I find that Section 21 of the RDDBFI Act, 1993 is not applicable and the petitioner-appellant is not required to make any pre-deposit as mandated under Section 21 of the Act.

9. As for the stay, considering the above submissions as made by the learned advocates for both sides, I think, a stay order is warranted in the circumstances of the case. This is because if the injunction order as prayed for is not granted, this is likely to occasion irreparable loss and injury to the petitioner-appellant, Coal India Ltd. Moreover, the balance of convenience and inconvenience is also lilted in favour of the petitioner praying for the injunction for the limited period till the disposal of the instant appeal.

11. The Recovery Officer is restrained from proceeding any further in R.P. No. 7 of 2002 till disposal of the instant appeal as prayed for by the petitioner-appellant.

12. The respondent-Bank is directed to file affidavit-in-opposition within three weeks from the date of receipt of this order, and reply thereto, if any, within two weeks from the date of receipt of copy of the affidavit-in-opposition. Liberty to mention, after usual notices to the other side. A xerox of this order may be made available to the advocates for the parties.


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