TaxTMI 
TaxTMI 
2019 (2) TMI 467
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....tioner. On its failure to honour the terms of the Loan Agreement, the petitioner initiated action under the SARFAESI Act by issuing a notice under Section 13(2) of the SARFAESI Act to the said respondent. 3. It is the case of the petitioner that it took symbolic possession of the secured asset on January 05, 2015. On July 24, 2017, a sale notice was issued for recovery of Rs. 4,16,04,827/-. The DRT-I set aside the sale notice dated July 24, 2017 on the ground that the complete description of the property had not been given. The petitioner again issued a demand notice for recovery of an amount of Rs. 12,33,78,319/- along with future interest. It is the case of the petitioner that it took symbolic possession of the secured asset for non-compliance of demand notice by the borrower. It appears, a sale notice of the secured asset was issued by the petitioner with auction date of October 30, 2017. 4. An SA titled Vaibhav Jhawar and Ors. v. Indiabulls Housing Finance Ltd. bearing No. 244/2017 was filed before the DRT by respondent Nos.1 to 5. It is the case of the petitioner that the respondent Nos. 1 to 5 are neither the owners of the property nor do they have any interest in the s....
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....been filed by the petitioner against the order dated March 14, 2018 passed by the Presiding Officer, Debts Recovery Appellate Tribunal (hereinafter referred to as "DRAT") wherein the Appeal filed by the respondents 1 to 5 has been entertained and notice has been issued without calling upon the respondents No. 1 to 5 to make the mandatory pre-deposit in terms of the proviso to Section-18 (1) of the SARFAESI Act. The impugned order, according to Mr. Mata, as such, is prima facie in violation of the statutory provision of Section-18, SARFAESI Act and its interpretation by the Supreme Court of India and various High Courts. 8. It is stated that the respondent Nos. 1 to 5 herein are alleged to be the shareholders of M/s. Surya Constructions Pvt. Ltd. (respondent No.6) i.e., the borrower of the petitioner and have approached the DRAT against an order passed by the DRT-I vide which the Securitization Application filed by the respondents was dismissed while deciding the application filed by the petitioner Under Order 7 Rule 11 of the CPC. 9. He submitted, the Supreme Court of India has categorically interpreted Section-18 of SARFAESI Act along with its proviso in the case titled "Axi....
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.... 13. Additionally, he submitted that the reliance placed by the DRAT on the judgment of this Court in Manju Devi (supra) is misfounded since the facts and issues involved in the instant petition and the aforesaid case are completely different wherein the Appellate Tribunal had called upon each one of the Appellants to make a deposit of 50% of the amount in question, which total deposit would have far exceeded the amount due and payable by the borrowers. 14. He also submitted, the securitization application filed by the respondent was per se not maintainable under Section 17 of the SARFAESI Act as the respondents 1 to 5 are not aggrieved by any measures under Section 13 of the SARFAESI Act. Therefore, the appeal under Section 18 of the SARFAESI Act is not maintainable and the notice issued by the DRAT should be set aside. 15. On the other hand, Mr.S.L. Gupta, learned counsel for respondent Nos.1 to 5 would support the order passed by the learned Appellate Tribunal by stating that the same is in conformity with the provisions of Section 18 of the SARFAESI Act, 2002. 16. Having heard the learned counsel for the parties, the issue falls in a very narrow compass, whether respon....
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....n Section 2(f) of the SARFAESI Act, which reads as under:- 2(f) "borrower" means any person who has been granted financial assistance by any bank or financial institution or who has given any guarantee or created any mortgage or pledge as security for the financial assistance granted by any bank or financial institution and includes a person who becomes borrower of a securitisation company or reconstruction company consequent upon acquisition by it of any rights or interest of any bank or financial institution in relation to such financial assistance; 18. On a reading of the aforesaid definition of "borrower", the same would include a guarantor as well but not a person other than borrower / guarantor. The only interpretation given to second proviso to Section 18(1) shall be that if a person other than borrower / guarantor files an appeal before the Arbitral Tribunal then the stipulation of the pre-deposit of 50% (or 25%) of the amount of debt due from him as claimed by the secured creditors or determined by the DRT shall not be insisted upon. This is the only interpretation, which can be given to second proviso to Section 18(1) read with Section 2(f) of the SARFAESI Act....
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....giver. 20. In Nairin v. University of St. Andrews reported in 1909 AC 147, the Apex Court held that, "Unless there is any ambiguity it would not be open to the Court to depart from the normal rule of construction which is that the intention of the Legislature should be primarily gathered from the words which are used. It is only when the words used are ambiguous that they would stand to be examined and construed in the light of surrounding circumstances and constitutional principle and practice." 21. In Ram Rattan v. Parma Nand reported in AIR 1946 PC 51, the Hon'ble Mr. Justice S.R. Das, held as follows: "The cardinal rule of construction of statutes is to read the statutes literally, that is, by giving to the words their ordinary, natural and grammatical meaning. If, however, such a reading leads to absurdity and the words are susceptible of another meaning, the Court may adopt the same. But if no such alternative construction is possible, the Court must adopt the ordinary rule of literal interpretation. In the present case, the literal construction leads to no apparent absurdity and therefore, there can be no compelling reason for departing from that ....
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....e legislature must be given its due import and significance. 27. It is a well settled law of interpretation that "when the words of the statute are clear, plain or unambiguous, ie., they are reasonably susceptible to only one meaning, the Courts are bound to give effect to that meaning irrespective of consequences. In this regard, reference is made to the decision of the Apex Court in Nelson Motis v. Union of India reported in AIR 1992 SC 1981. 28. In M/s. Oswal Agro Mills Ltd., v. Collector of Central Excise and others reported in 1993 Supp (3) SCC 716 : AIR 1993 SC 2288, the Apex Court held that, where the words of the statute are plain and clear, there is no room for applying any of the principles of interpretation, which are merely presumption in cases of ambiguity in the statute. The Court would interpret them as they stand. 29. In Nasiruddin v. Sita Ram Agarwal reported in (2003) 2 SCC 577, the Supreme Court held as follows: "35. In a case where the statutory provision is plain and unambiguous, the court shall not interpret the same in a different manner, only because of harsh consequences arising therefrom.... 37. The court's jurisdiction to in....
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....nancy or inconsistency, the grammatical sense must then be modified, extended or abridged, so far as to avoid such an inconvenience, but no further. The onus of showing that the words do not mean what they say lies heavily on the party who alleges it must advance something which clearly shows that the grammatical construction would be repugnant to the intention of the Act or lead to some manifest absurdity." 33. In Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd., reported in (2008) 4 SCC 755, the Supreme Court, at Paragraphs 52 held as follows: "52. No doubt ordinarily the literal rule of interpretation should be followed, and hence the court should neither add nor delete words in a statute. However, in exceptional cases this can be done where not doing so would deprive certain existing words in a statute of all meaning, or some part of the statute may become absurd." 34. In Mohd. Shahabuddin v. State of Bihar, reported in (2010) 4 SCC 653, the Supreme Court held that, "179. Even otherwise, it is a well-settled principle in law that the court cannot read anything into a statutory provision which is plain and unambiguous. The language employed in a statute ....
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....mission in the statute, the court cannot correct the defect or supply the omission - Union of India v. Deoki Nandan Aggarwal [MANU/SC/0013/1992 : 1992 Supp (1) SCC 323] and Shyam Kishori Devi v. Patna Municipal Corpn. [MANU/SC/0191/1966 : AIR 1966 SC 1678]" 36. Having noted the position of law, we must hold that there is no ambiguity in the provisions of Section 18 of the SARFAESI Act. The provisions of Section 18 of the SARFAESI Act, are determinative of the fact that the legislature intended that it is only the borrower and the guarantor, who should be under obligation to make the pre-deposit. The same is clear on a literal and grammatical meaning of the words "borrower" and "any person aggrieved" as found mentioned in Section 18 and 2 (f) of the Act. There is no inconsistency within the provision of Section 18(1) of the Act. 37. It must be held that the only way, second proviso to Section 18(1) can be interpreted is that it is either the borrower or the guarantor, who is liable to make pre-deposit on an appeal filed by him / her against the order of the DRT. The DRAT has rightly rejected the contention made on behalf of the petitioner for the pre-deposit to be made by the ....