DRAT Chennai Bars City Union Bank's Belated Challenge To Delayed Written Statement In ₹14 Crore Recovery Case

The Debts Recovery Appellate Tribunal (DRAT) at Chennai has recently set aside an order striking off a written statement filed by borrowers beyond the prescribed 45-day period in a recovery case initiated by City Union Bank for about ₹14 crore.

It held that the bank lost its right to challenge the delayed filing after participating in the proceedings without objection and raising the issue only after the Madras High Court remanded the matter.

A bench of Chairperson Justice G. Chandrasekharan held that City Union Bank had participated in the proceedings on the basis of the written statement without objecting to its delayed filing. It could not later seek to strike it off after the case returned to the Debts Recovery Tribunal (DRT), Coimbatore.

The tribunal observed, “This Tribunal is of the view that the Respondent had lost its right to challenge the delayed filing of the Written Statement on the principles of acquiescence, waiver and estoppel. It is no doubt that there can be no waiver/estoppel against a statute. However, the conduct of the Respondent in not challenging the delayed filing of the Written Statement from 09.06.2023 till the filing of MA 21/2026, is highly belated and is hit by acquiescence.”

City Union Bank had moved the DRT seeking recovery of about Rs.14 crore from G. Jawahar and Rajalakshmi Jawahar. The borrowers filed their written statement on June 9, 2023, after obtaining extensions. The bank did not object at that stage. Instead, it filed its proof affidavit, the borrowers submitted a counter proof affidavit, and the matter proceeded to trial. The DRT allowed the bank's recovery application in May 2024.

The borrowers challenged that decision before the Madras High Court. The High Court found that the DRT had passed a non-speaking order without considering the defences raised in the written statement. It remanded the matter for fresh consideration.

After remand, the bank sought to strike off the written statement on the ground that it had been filed beyond the statutory timeline. The DRT accepted that contention, prompting the borrowers to appeal.

The tribunal noted that the bank had not objected when the written statement was filed, before the DRT decided the recovery application, or during the proceedings before the High Court. It held that a party which knowingly participates in proceedings without objecting to a procedural irregularity cannot raise that objection later.

It observed, “A party, who knowingly participates in the proceedings without raising objection, forfeits his right to challenge the procedural irregularities at a later stage.”

The tribunal also ruled that the High Court's remand was confined to reconsidering the borrowers' defences. Revisiting the delayed filing of the written statement went beyond the scope of that remand.

It consequently set aside the DRT's order and directed it to decide the bank's recovery application afresh in line with the High Court's directions.

For Appellants: Senior Advocate Jayash Dolia for M/s. Aiyar & Dolia

For Respondent: Ananda Gomathy