The step-wise procedure to be followed in Civil Recovery Proceedings;
Step 1: Preparation of Plaint - Initially, for the preparation of a plaint, the basic principle of law must be kept in mind while drafting a plaint. The draft must include the material fact, contentions, prayer clause, date and cause of action, jurisdiction, etc. It should be ensured that the Plaint is made in a specific manner and as per legal requirements. Once the Bank files a plaint, it will be addressed as a plaintiff in the whole petition.
Step 2: Remittance of Court Fees & filing the Plaint - Court fee is calculated as per the provisions of Court Fees Act of particular State. Court Fees Act prescribes the ‘Court Fee’ as per the subject matter of specific litigation.
Step 3: Process of service - In order to complete process of service upon the defendant/Defendants, the Court allots a serial number to the case once it is filed, with a prefix indicating the type of the case. (Like "O.S" for "Original Suit"). The judge directs to issue a notice to the Defendant and also gives the date for proceeding with the matter. Accordingly, the notice is issued informing the defendants about the case been filed by the plaintiff against him, and he should appear before the court personally or through a lawyer on the date of matter.
Step 4: Preliminary hearing - On the preliminary hearing, after appearing before the court the defendant can file the written statement on his behalf, and the next date of hearing will be fixed by the court. Usually, a court allows the defendant to file his written statement within a period of 30 days. However, it may exceed a maximum of 90 days.
Step 5: Filing a written statement by the Defendant - When a defendant files his written statement in the Court, he would deny all the assertions in the Plaint and compel the plaintiff to prove every claim. This is also another way to prolong the outcome of the case, which may not be in favour of the Defendant if the plaintiff happens to have a bonafide case.
Step 6: Framing of Issues - A list of disputed questions of fact and law are called issues framed by the court which the plaintiff has to prove on the basis of evidence. The points mentioned by the plaintiff in his plaint, which is not expressly disputed by the Defendant, need not be proved.
Step 7: Defendant (both borrower as well as guarantors) take steps to dispose of most of their assets (including hypothecated assets) –
The following steps should be taken immediately after the suit is filed:
- Appointment of interim receiver and application for a temporary injunction.
- Interim attachment or injunction and interim sale.
Step 8: Evidence - After the issues are framed, the case is posted for evidence.
(a) Filing documents & leading evidence – After taking the evidence of the plaintiff into consideration, the witnesses if any, on behalf of the Plaintiff step into the witness box to narrate the facts of the case. All witnesses of the Plaintiff will be cross-examined by the lawyer of the Defendant. This process is called"leading evidence.”
(b) Evidence by the Defendant - The defendants is allowed to file any documents which he wants to produce before the court. The witnesses on behalf of the Defendant are cross-examined by the Plaintiff (i.e., by the Plaintiff's lawyer). After the evidence of both sides is filed, the case is adjourned for final arguments.
(c) Closing Arguments - The lawyers representing both the parties are asked to present their closing arguments before the court. It is possible that the judge may not be able to read and assimilate lengthy documents covering evidence on both sides, but he is accustomed for the quick perception of what is stated in the arguments. Documents are not read during the proceedings, and they have to be studied leisurely by the Judge, after court hours.
Step 9: Pronouncement of Judgment & passing of Decree - After concluding the arguments of both parties, the judge may reserve his order to be pronounced on a later date or may deliver the same immediately. Both parties may apply to the Court for a copy of the Judgment.
Step 10: Execution of the Decree - The party in whose favour the Decree is passed is called the decree-holder. The other party is called the Judgment Debtor. The Judgment debtor has to implement the Court's decree. If he fails to implement, the decree-holder can file an execution petition before the Court.
Step 11: Appeal - When a decree has been obtained by the Bank in its favour in the suit filed against the borrower and the guarantor, prompt steps should be taken for execution of such decree for recovery of the Bank’s dues.
Step 12: Filing of Appeal - Where the suit is decreed in favour of either of the party, the aggrieved party may prefer an appeal, if there are valid grounds of law and/or facts to prefer an appeal. The Court, immediately higher in the hierarchy is the Court to which an appeal can be filed. The appeal has to be filed within 30 days from the date of the decree.
Step 13: Execution of Money Decree - Even if the Judgment debtor files an appeal against the Bank before the Appellate Court challenging the money decree passed by the lower Court in Bank’s favour, the Bank should nevertheless proceed to apply for the execution of the decree passed by the lower Court notwithstanding the pendency of such an appeal unless a stay order or injunction order is granted by the Appellate Court restraining the Bank from executing the decree.
The process as above appears very simple, but in real life, the litigation is dragged for several months and even years. This is not only due to the delaying tactics adopted by the Defendant but also due to an enormous backlog of litigations piled up and pending in civil courts.