TaxTMI 
TaxTMI 
2015 (3) TMI 1358
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....eof to maintain the statutory appeal under Section 18(1) of SARFAESI Act. Our answer to both the questions has to be in the negative for the reasons mentioned below. 3. The facts canvassed before us, briefly stated are as under : Respondent no. 1 took loan from the State Bank of India. Respondent nos. 2 to 6 stood as guarantors. Thus, as on 26-06-2007, Rs. Seven Crores were due from Respondent nos. 1 to 6. The S.B.I. assigned the debt to Respondent no.7. Notice under Section 13(2) was issued from ARCIL on 26-06-2007. During the recovery proceedings, possession of the Nagpur's property was taken on 25-08-2007 and possession of Palanpur's property was taken on 29-08-2007. An application bearing no.71 of 2007 was filed on 08-10-2007 before the Debt recovery Tribunal, Mumbai. It was dismissed on 3062011. In the meanwhile, on 23-10-2007, the Aalampur property was sold to the petitioner for Rs. 4.80 crores and on 24-10-2007, the Nagpur property was sold for a sum of Rs. 2.80 crores to the petitioner. It was found that the Debt Recovery Tribunal at Mumbai had no jurisdiction to entertain the application and hence, it was returned. 4. Against dismissal of Application....
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....more measures referred to in subsection (4) of section 13 taken by the creditors assets as invalid and restore the possession of the secured assets to the borrower or restore the management of the business to the borrower, as the case may be, and pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under subsection (4) of section 13. (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under subsection (4) of section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under subsection (4) of section 13 to recover his secured debt. (5) Any application made under subsection (1) shall be dealt with by the Debts Recovery Tribunal as expeditiously as possible and disposed of within sixty days from the date of such application: PROVIDED that the Debts Recovery Tribunal may, from time to time, extend the said period for reasons to be recorded in ....
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....debt recoverable by the secured creditor. 5. It is submitted that the appeal under Section 18(1) of the SARFAESI ACT is required to be preferred within 30 days. It is maintainable subject to condition precedent of deposit in the sum of 50% of the debt amount subject to the sum reduced by a reasoned order at the discretion of the DRAT, not less than 25% of the debt amount. It is, therefore, submitted that the order granting waiver is bad in law and in violation of the mandatory provisions of Section 18 of the SARFAESI Act and hence, the same must be quashed and set aside. 6. On the other hand, it is contended that requirement of the pre-deposit will not come into play in the absence of any debt within the meaning of Section 2(ha) read with clause (g) of Section 2 of the RDBBI Act. According to the learned Advocate for the respondent, the Sale was confirmed and money was appropriated and hence, the requirement as to pre-deposit did not survive as no debt was due to the secured creditor. Assignment to the private party left no debt recoverable as on the date of impugned order. He submitted that the impugned order deserves to be upheld as there was no question of any pre-deposit ....
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....rections contained in the preceding paragraphs, we hold that the borrowers would get a reasonably fair deal and opportunity to get the matter adjudicated upon before the Debt Recovery Tribunal. The effect of some of the provisions may be a bit harsh for some of the borrowers but on that ground the impugned provisions of the Act cannot be said to be unconstitutional in view of the fact that the object of the Act is to achieve speedier recovery of the dues declared as NPAs and better availability of capital liquidity and resources to help in growth of economy of the country and welfare of the people in general which would subserve the public interest." c) In M/s. Velaar Engineering Works Pvt. Ltd. vs. The Debts Recovery Appellate Tribunal, Chennai, it is observed thus : The legal obligation cast upon the authority is that the property to be sold in such a manner that it may fetch best price. It is further held that when the statute provides for a particular procedure, the authority has to follow the same and it cannot be permitted to act in contravention of the same and to uncontroverted legal position that where a statute requires to do a certain thing in a certain....
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....particular procedure, it is to be done in that way or not at all. 10. In the case of Narayan Chandra Ghosh vs. UCO Bank and others, (Civil Appeal No. 2681 of 2011 (arising out of S.L.P. (C) No. 5488 of 2011), the short question for consideration was as to whether the Appellate Tribunal has the jurisdiction to exempt the person, preferring an appeal under Section 18 of the Act from making any pre-deposit in terms of the said provision. The Apex Court observed thus: " 8. Section 18(1) of the Act confers a statutory right on a person aggrieved by any order made by the Debts Recovery Tribunal under Section 17 of the Act to prefer an appeal to the Appellate Tribunal. However, the right conferred under Section 18(1) is subject to the condition laid down in the second proviso thereto. The second proviso postulates that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less. However, under the third proviso to the subsection, the Appellate Tribunal has the power to reduce the amount, for the ....
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....discretionary power has been conferred on the Debts Recovery Appellate Tribunal under third proviso to subsection (1), to determine the amount of deposit as a pre-condition for maintaining the appeal the discretion is not an absolute one, but a limited one. While exercising the discretion conferred on it, provided for under third proviso to subsection (1), the Appellate Tribunal has been mandated not to reduce the deposit amount to less than twenty five percent of the debt referred to in the second proviso. 12. In the ruling in Indian Bank Vs. Blue Jaggers Estate Limited and others reported in (2010) 8 SCC 129 and the decisions in the case of Narayan Chandra Ghosh (cited supra), it is clear that when the petitioner appellant had not complied with the conditions as stipulated under Section 18 of the SARFAESI Act and when the Section itself insists on payment of the amount due at 50% as per the second proviso and as per the third proviso, only discretion available to the Tribunal is to reduce the amount of deposit to the sum of money which is not less than 25% of the amount of the debt, all that the petitioner prayed for before the Tribunal was total waiver of the amount payable b....
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....cial assets of banks and financial institutions. Further, unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow pace of recovery of defaulting loans and mounting levels of nonperforming assets of banks and financial institutions. Narasimham Committee I and II and Andhyarujina Committee constituted by the Central Government for the purpose of examining banking sector reforms have considered the need for changes in the legal system in respect of these areas." 15. In the interpretation of statutes, the Courts always presume that the legislature inserted every part thereof with a purpose and the legislative intention is that every part of the statute should have obedient effect. The legislature is deemed not to waste its words or to say anything in vain. By an interpretative process, the Court cannot reach a conclusion which makes it impossible for faster remedies provided for under the law to be worked out. The purposive i....