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Article 226 in The Constitution Of India 1949
Durga Prashad vs Chief Controller Of Imports & ... on 22 November, 1968
Article 136 in The Constitution Of India 1949
Shankara Co-Op. Housing Society ... vs M. Prabhakar & Ors on 5 May, 2011
P.S. Sadasivaswamy vs The State Of Tamil Nadu on 7 October, 1974
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A.Varalakshmi vs The Chief Manager on 3 July, 2012

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Madras High Court
Indian Bank vs Debts Recovery Tribunal on 9 August, 2011
       

  

  

 
 
 IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED:       09.08.2011

CORAM:

THE HONOURABLE MR.JUSTICE D.MURUGESAN
AND
THE HONOURABLE MR.JUSTICE K.K.SASIDHARAN


Writ Petition No.17396 of 2009

Indian Bank,
Kadambathur Branch,
Tiruvallur District 632 203			...	Petitioner

	versus

1.Debts Recovery Tribunal,
IV Floor, No.55, Ethiraj Salai,
Chennai 600  008.

2.G.Gajapathy
3.G.Kesavan					...	Respondents

	Writ Petition filed under Art.226 of the Constitution of India praying for a Writ of Certiorarified Mandamus for a direction to call for the records on the file of Debts Recovery Appellate Tribunal, Chennai in R.A.No.51/2005 and quash the order dated 15.06.2006 and direct the respondents to pay the interest on the amount due as per the contractual rate of interest as claimed in T.A.No.958/1997 on the file of Debts Recovery Tribunal No.1, Chennai.

		For petitioner 	: Mr.V.Kalyana Raman,
					  for M/s.Aiyar and Dolia

		For Respondents 	: Mr.K.V.Sundarajan, for R-2

O R D E R

K.K.SASIDHARAN, J.

This Writ Petition is directed against the order dated 15.06.2006 in R.A.No.51/2005 on the file of the Debts Recovery Appellate Tribunal, Chennai directing the Bank to accept the amount as per one time settlement in full and final satisfaction of their claim against respondents 2 and 3.

RELEVANT FACTS :-

2.The second respondent took a loan from the Indian Bank, Kadambathur Branch [hereinafter referred to as 'the Bank'] in the year 1989. It was essentially a poultry loan given under the Agricultural Sector. The third respondent stood as the guarantor. Since the Principal Debtor failed to pay the installments as per the terms of contract, the Bank initiated action for recovery. The Bank filed O.S.No.335/1992 before the Subordinate Court, Tiruvallur, which was later transferred and renumbered as T.A.No.958/1997 before the Debt Recovery Tribunal-I Chennai.

3.During the pendency of the proceedings before the Debt Recovery Tribunal, the second Respondent approached the Bank with a proposal for settlement. The said proposal was considered by the Bank and ultimately, one time settlement was sanctioned on 22.01.2003 for a sum of Rs.14.95 lakhs. Since the second Respondent failed to comply with the terms and conditions of one time settlement, it was revoked by the Bank on 18.02.2003. Debt Recovery Tribunal, Chennai, passed a Decree on 30.11.2004 and a Recovery Certificate was issued on 20.06.2005 authorizing the Recovery Officer to recover the amount.

4.The Decree in T.A.No.958/1997 was challenged before the Debt Recovery Appellate Tribunal, Chennai, in R.A.No.51/2005. During the pendency of the said proceeding, Debts Recovery Appellate Tribunal directed the appellant to submit two types of calculations  one showing the amount due as per the Certificate issued by the Debt Recovery Tribunal and the other on the basis of one time settlement. Accordingly, the Bank submitted the statement of accounts. Debts Recovery Appellate Tribunal was of the view that the second respondent has made bona fide attempts to pay the amount and as such, he should be given the benefits of one time settlement. Accordingly, the Bank was directed to accept a sum of Rs.19,000/- in full and final satisfaction of the claim. Dissatisfied with the said order, the Bank filed this Writ Petition.

5.The second Respondent in his counter affidavit contended that the Writ Petition is liable to be dismissed on the ground of delay and laches. According to the second Respondent, subsequent to the appellate Decree, a sum of Rs.19,000/- was paid in full and final satisfaction of the claim as per the Appellate Decree and the same was accepted by the Bank without protest. Subsequently, the mortgaged property was sold in favour of a third party on the basis of Sale Deed dated 12.08.2008 and it was registered as Doc.No.11614/2008 before the Sub Registrar, Sri Perumbadur. It was long thereafter, the Bank has filed the present Writ Petition. Therefore, the second Respondent prayed for dismissal of the Writ Petition on the ground of delay and laches.

SUBMISSIONS :-

6.The learned Counsel for the Bank contended that one time settlement was cancelled by the Bank on account of the failure of second respondent to comply with the conditions and it was followed by a Decree passed by the Debt Recovery Tribunal. According to the learned Counsel, in view of the Decree passed by the Debt Recovery Tribunal, there was no question of considering one time settlement and therefore, the Debts Recovery Appellate Tribunal committed a serious error in directing the Bank to accept the balance amount as per one time settlement scheme.

7.The learned Counsel for the second respondent submitted that the Bank has agreed before the Debts Recovery Appellate Tribunal to accept the payment and accordingly, they have received the payment without any kind of protest. Therefore, the second Respondent was under the impression that the issue has become final. This made him to assign the property in favour of a third party. Now the third party interest has crept in. It was only thereafter, the Bank has filed the Writ Petition. Therefore, the learned Counsel prayed for dismissal of the Writ Petition primary on the ground of delay and laches.

8.The moot question to be decided in this Writ Petition is whether the Writ Petition is liable to be dismissed on the ground of delay and laches.

ANALYSIS :-

9.The documents produced by the Bank shows that the Decree was passed on 21.06.2005 and pursuant to the said Decree, Recovery Certificate was issued to the Recovery Officer authorizing him to attach and sell the mortgaged property. The Recovery Officer in turn attached the property on 12.07.2005. It was thereafter, the second Respondent filed an appeal before the Debts Recovery Appellate Tribunal in R.A.No.51/2005. The appellate Tribunal was of the view that the second Respondent has taken earnest efforts earlier to pay the amount and on account of the circumstances beyond his control, he failed to pay the amount. Therefore, the alternative calculation submitted by the Bank was accepted and accordingly, the second Respondent was directed to pay a sum of Rs.19,000/- in full and final satisfaction of the claim. It is also a matter of record that the said amount was paid by the second Respondent. It was only about three years thereafter, the Bank has filed the present Writ Petition.

10.The demand made by the appellant was accepted by the Bank without any kind of protest. The Bank has not even sent a letter to the second Respondent indicating that the receipt of the amount was without prejudice to their right to challenge the order passed by the Appellate Tribunal.

11.The affidavit filed in support of the Writ Petition does not contain any averments regarding the delay. It is now evident that in the meantime, the property was sold and third party interest has crept in on account of such sale. The purchaser is not a party to the proceeding. In case the Bank was diligent, they should have challenged the order within a reasonable time. The Bank by not challenging the order passed by the Debts Recovery Appellate Tribunal, permitted the second respondent to assign the property and in that way, third party interest has crept in.

12.The writ jurisdiction under Article 226 of the Constitution of India is otherwise known as equity jurisdiction. It is true that there is no prescribed period of limitation for filing a Writ Petition challenging a particular order or proceeding. That does not mean that the writ Court could be approached even after considerable delay. The party must be vigilant and they should approach the Court within a reasonable time. What is reasonable time would depend upon the facts of a given case. The Court is not bound to issue a writ whenever a case is made out. The Court may even after convincing itself about the merits of the case, would deny the relief, in case it is inequitable to grant the relief. Unexplained delay, coupled with the factum of creation of third party interest in the meantime would entail rejection of the writ on the ground of laches.

13.The Court exercises wide discretion while exercising equity jurisdiction. The Court must evaluate the factors contributed for the delay and if it is made out that great injustice would cause in case the Writ Petition is rejected on the ground of delay and laches, it would be a sufficient cause to entertain the Writ Petition in spite of delay.

14.Litigation should attain finality at a particular point of time. The parties should not be under the threat of litigation at all point of time. Law of limitation is intended to give quietus to the lis. Therefore, even if a case is made out on merits, still, it is open to the Court to dismiss the Writ Petition if it is demonstrated that the party has not taken prompt action to file Writ Petition.

PRECEDENTS ON POINT :-

15.In P.S. Sadasivaswamy v. State of T.N., (1975) 1 SCC 152, the Supreme Court observed that though there is no period of limitation prescribed for entertaining a writ petition under Article 226 of the Constitution of India, still, the Court would refuse to exercise its jurisdiction in case the writ petition was filed after a considerable length of time. The Supreme Court said:-

"2. ... It is not that there is any period of limitation for the Courts to exercise their powers under Article 226 nor is it that there can never be a case where the Courts cannot interfere in a matter after the passage of a certain length of time. But it would be a sound and wise exercise of discretion for the Courts to refuse to exercise their extraordinary powers under Article 226 in the case of persons who do not approach it expeditiously for relief and who stand by and allow things to happen and then approach the Court to put forward stale claims and try to unsettle settled matters."

16.The Supreme Court in State of Rajasthan v. D.R. Laxmi, (1996) 6 SCC 445 observed that a void order need not be set at naught if the party does not approach the Court within a reasonable time. The Supreme Court said ::-

"9. ... Delay in challenging the notification was fatal and writ petition entails with dismissal on grounds of laches. It is thus, well-settled law that when there is inordinate delay in filing the writ petition and when all steps taken in the acquisition proceedings have become final, the Court should be loathe to quash the notifications.

10. The order or action, if ultra vires the power, becomes void and it does not confer any right. But the action need not necessarily be set at naught in all events. Though the order may be void, if the party does not approach the Court within reasonable time, which is always a question of fact and have the order invalidated or acquiesced or waived, the discretion of the Court has to be exercised in a reasonable manner. When the discretion has been conferred on the Court, the Court may in appropriate case decline to grant the relief, even if it holds that the order was void. The net result is that extraordinary jurisdiction of the Court may not be exercised in such circumstances.

17.The Supreme Court in ONGC Ltd. v. Sendhabhai Vastram Patel, (2005) 6 SCC 454, held that superior Courts cannot strike down a wrong order only because it would be lawful to do so. The Supreme Court observed thus :-

"23.It is now well settled that the High Courts and the Supreme Court while exercising their equity jurisdiction under Articles 226 and 32 of the Constitution as also Article 136 thereof may not exercise the same in appropriate cases. While exercising such jurisdiction, the superior courts in India may not strike down even a wrong order only because it would be lawful to do so. A discretionary relief may be refused to be extended to the appellant in a given case although the Court may find the same to be justified in law."

18.In Shiv Dass v. Union of India, (2007) 9 SCC 274, the Supreme Court held that if there is negligence or omission on the part of the writ petitioner in filing the writ petition, which in the facts and circumstances of the case would cause prejudice to the opposite party, it is a valid ground to refuse to entertain the writ petition. The Supreme Court said :-

6. Normally, in the case of belated approach writ petition has to be dismissed. Delay or laches is one of the factors to be borne in mind by the High Courts when they exercise their discretionary powers under Article 226 of the Constitution of India. In an appropriate case the High Court may refuse to invoke its extraordinary powers if there is such negligence or omission on the part of the applicant to assert his right as taken in conjunction with the lapse of time and other circumstances, causes prejudice to the opposite party. Even where fundamental right is involved the matter is still within the discretion of the Court as pointed out in Durga Prashad v. Chief Controller of Imports and Exports. Of course, the discretion has to be exercised judicially and reasonably.

19.The Supreme Court in Tridip Kumar Dingal v. State of West Bengal, (2009) 1 SCC 768, indicated that inordinate delay in making the motion for a writ will be a good ground for refusing to exercise discretionary jurisdiction. The Supreme Court observed :-

"57.If the petitioner wants to invoke jurisdiction of a writ court, he should come to the Court at the earliest reasonably possible opportunity. Inordinate delay in making the motion for a writ will indeed be a good ground for refusing to exercise such discretionary jurisdiction. The underlying object of this principle is not to encourage agitation of stale claims and exhume matters which have already been disposed of or settled or where the rights of third parties have accrued in the meantime."

20.The Supreme Court in Ritesh Tewari and anr. vs. State of U.P. And ors. 2010 (10) Scale 38, observed that the writ jurisdiction is discretionary and it is not issued as a matter of course. The Supreme Court said :-

"20.The power under Article 226 of the Constitution is discretionary and supervisory in nature. It is not issued merely because it is lawful to do so. The extraordinary power in writ jurisdiction does not exist to set right mere errors of law which do not occasion any substantial injustice. A writ can be issued only in case of a grave miscarriage of justice or where there has been a flagrant violation of law. The writ Court has not only to protect a person from being subjected to a violation of law but also to advance justice and not to thwart it. The Constitution does not place any fetter on the power of the extraordinary jurisdiction but leaves it to the discretion of the Court."

21.In Sankara Coop Housing Society Ltd. vs. M.Prabhakar and others, 2011 (5) Scale 423, the Supreme Court once again observed that delay and laches is one of the factors that should be borne in mind while exercising the discretionary power under Article 226 of the Constitution of India. The Supreme Court said :-

"46.Delay and laches is one of the factors that requires to be borne in mind by the High Courts when they exercise their discretionary power under Article 226 of the Constitution of India. In an appropriate case, the High Court may refuse to invoke its extraordinary powers if there is such negligence or omission on the part of the applicant to assert his rights taken in conjunction with the lapse of time and other circumstances."

22.The order of Debts Recovery Appellate Tribunal was made on 15.06.2006. The direction given by the Appellate Tribunal was promptly complied with by the second Respondent. The Bank slept over the issue even after the second Respondent made the final payment.

23.There is nothing on record to show that any step was taken by the Bank for the period between 2006-2009 to challenge the order passed by Debts Recovery Appellate Tribunal. The Bank allowed the grass to grow in the meantime and ultimately, challenged the order, by filing Writ Petition on 25 August 2009. In the meantime, third party has purchased the property. The said third party is not before this Court. The second respondent in his counter resisted the writ petition on the ground of delay and laches. Even then, the Bank has not made any attempt to explain the delay by filing a better affidavit.

24.In view of the unexplained delay in filing the writ petition, we are not inclined to consider the case on merits.

25.In the upshot, we dismiss the Writ Petition. No costs. Consequently, connected M.Ps. are closed.

tar To

1.Indian Bank, Kadambathur Branch, Tiruvallur District 632 203