1999 (12) TMI 779 - HC - Companies Law

Summary

Issues:
Petition to quash order of Debts Recovery Tribunal and subsequent dismissal application for setting aside the order.

Analysis:
The petition under Article 226 sought to quash the order of Debts Recovery Tribunal (DRT) directing the defendants to pay a substantial sum along with interest. The plaintiff, Indian Overseas Bank, filed a suit for recovery against the defendants, alleging non-payment of credit limits availed by the defendants. The case was transferred to DRT due to the suit's value exceeding Rs. 10 lakhs. Despite multiple attempts at service, the defendants did not appear, leading to an ex parte order by DRT in favor of the plaintiff.

The defendants later moved an application to set aside the ex parte order, claiming lack of awareness about the proceedings. However, the Tribunal found that the defendants were duly served through publication and dismissed their application. The defendants challenged the legality of the orders, alleging a lack of effective service and violation of natural justice principles.

During the hearing, the defendants undertook to deposit a sum with the respondent bank, but failed to comply despite extensions. The court vacated the stay order on execution but stayed the arrest pending the writ petition's disposal. The defendants argued that the service through publication in the 'Statesman' was insufficient, as no edition was published from Agra, where they resided.

The respondent-bank contended that the defendants were intentionally avoiding service, supported by reports of failed attempts at service. The court cited precedent, emphasizing that interference with tribunal orders should avoid a technical approach. It held that the Tribunal's orders were not in violation of natural justice or jurisdiction. The court declined to examine disputed factual questions, noting the appeal process available under the Act for every order issued by the Tribunal.

Ultimately, the court dismissed the writ petition, vacated the stay order, and advised the defendants to appeal to the appellate authority under the Act. The time spent on the writ petition would be excluded from the limitation period for filing an appeal. The court's decision did not prejudice the parties' case on merits, and no costs were awarded.