A case Study-Ex Parte Decree
A Bank advanced some Loan to a Partnership Firm. One of the partners died. The other 2 partners did not see eye to eye and the loan went sticky. The firm filed Recovery proceedings against the 2 partners and the LRs of the deceased partner. The deceased partner had also mortgaged her property to the Bank sufficient enough to cover the loan amount. The Court ruled in favour of the Bank and passed a decree in favour of the Bank allowing the Bank to sell the mortgaged property. The Court also ruled that no amount to be recovered from the LRs.
Now the anomaly, anomalies, irregularities and absurdities.
The learned fraternity is requested to comment upon
1. Out of the 6 LRS one of the LRs actually received the notices and appeared in the proceedings and the other LR lawyer never appeared. The rest of the 4 LRs never stayed at the address on which the notices were sent by the Bank. All the LRs stayed in different cities and the Bank mere dispatched the notices addressed to the LRs, at the addresses of the diseased borrower and when these notices were sent even the diseased borrower was not there.
Question: Is this a good service on LR? Can the Bank just assume that all LRs always stay with the parents as long as they live?
What is the legally correct position in this respect?
2. The decree was thus passed Ex Parte against the 3 LRs due to the above situation and the 3 LRs never came to know about the same, The Court used a strange reasoning while passing the decree. “Since the LRs have not contested the mortgage , it can be assumed that the property was mortgaged to the Bank and therefore the Bank can sell the same”
Isnt it strange ? The Court is supposed to peruse the documents and decide whether the property was mortgaged and not because the LRs did not contest
What is the opinion of the Fellow Lawyers?
3. Is there any chance of the Ex parte decree being set aside (11 years have passed since the order of the decree)?
What could be the grounds that can be raised by the LRs for getting the ex parte being set aside and the suit be reopened?
4. The cheques pertaining to the loan account that was sanctioned to the firm were not drawn by any of the partners but by a Manager who did not have authority to sign the cheques and create an overdraft. In this situation where does the Bank’s claim of a recovery against the partners or their LRs stand?
All these questions can be raised only if the ex parte is set aside and fresh proceedings are allowed
What is the best legal recourse in this situation for the LRs who did not / rather could not appear in the proceedings for want of notice
