TaxTMI 
TaxTMI 
2021 (2) TMI 1251
X X X X Extracts X X X X
X X X X Extracts X X X X
....k claiming to be aggrieved by the said order is before this Court in the instant appeal. 3. This Court while taking note of the matter at the first instance, had through the order dated 22.11.2019 directed the respondents No.1 and 2 to deposit an amount of Rs. 20 Crores before the Registry of this Court within a period of 8 weeks. In the said order it was indicated that the further proceedings in the appeal before the DRAT shall remain stayed till the next date of hearing or till the date of deposit of the said amount by the respondents No.1 and 2, whichever is earlier. The deposit as directed by this Court has not been made by the respondents No.1 and 2. The appellant/Bank, therefore, alleging that there is disobedience of the order passed by this Court has filed the accompanying Contempt Petition seeking action against respondents 1 and 2. In that background, since both these matters pertain to the same issue, they are taken up together, considered and disposed of by this common order. 4. The brief facts leading to the present proceedings is that the respondent No.3, namely, Hindon River Mills Ltd. had availed financial assistance from the respondent No.6IFCI Ltd. The responden....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rupees One Hundred Fifty-Two Crores Eighty-One Lakhs Seven Thousand and One Hundred Fifty-Nine) was the compensation amount which was deposited on behalf of respondent No.3 relating to the mortgaged property, which was credited to the account of respondent No.3. With these developments in the background, the DRT had proceeded to consider the claim application and ultimately ordered issue of recovery certificate through the order dated 15.03.2018. Through the said order, as against the claim, the DRT had limited the decretal amount to Rs. 145 Crores with future interest at 9% per annum till the realisation, on reducing balance. It was further ordered therein that the amount would be payable after taking into consideration the amount of Rs. 152,81,07,159/( Rupees One Hundred Fifty-Two Crores Eighty-One Lakhs Seven Thousand and One Hundred FiftyNine) paid during the pendency of the proceedings. 6. The appellant/Bank as well as respondents No. 1 to 3 claiming to be aggrieved by the order dated 15.03.2018 passed by DRT have preferred appeals before the DRAT. This Court at this juncture is not required to consider the merits of the rival contentions relating to the loan transaction and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the DRAT. In order to address the said issue, it would be appropriate to take note of Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 which provides for deposit of the amount of debt due on filing the appeal. Section 21 of the RDBA reads as hereunder: "Deposit of amount of debt due, on filing appeal - Where an appeal is preferred by any person from whom the amount of debt is due to a bank or a financial institution or a consortium of banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal [fifty per cent.] of the amount of debt so due from him as determined by the Tribunal under section 19: Provided that the Appellate Tribunal may, for reasons to be recorded in writing, [reduce the amount to be deposited by such amount which shall not be less than twenty-five per cent. of the amount of such debt so due] to be deposited under this section." (emphasis supplied) 10. A perusal of the provision which employs the phrase "appeal shall not be entertained" indicates that it injuncts the Appellate Tribunal from entertaining an appeal by a person from whom the amount of d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....final judgment, and not thereafter, would make no difference while considering the aspect of pre-deposit that the debtor, or the guarantor would have to deposit in terms of Section 21 of the aforesaid Act." 12. The extracted portion indicates that the High Court has proceeded at a tangent while adverting to the aspect of recovery made towards the loan amount from the land acquisition compensation payable to respondent No.3. The conclusion appears to be that the receipt of the compensation amount even though was before passing of the decree, would wipe out the decretal amount of Rs. 145 Crores with interest at 9% per annum, though it has not been expressly stated so. Per contra, the DRAT by its order dated 27.02.2019 while directing the pre-deposit of fifty per cent of the amount had taken note of the fact that if the decretal amount as ordered by the DRT is taken into consideration and the amount received by the Bank towards the compensation amount is credited, the balance of the decretal amount payable by respondents No.1 to 3 would work out to Rs. 68,18,92,841/( Rupees Sixty Eight Crores Eighteen Lakhs Ninety Two Thousand and Eight Hundred Forty One). It is in that view, the DR....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ich is extracted above. In all cases fifty per cent of the decretal amount i.e. the debt due is to be deposited before the DRAT as a mandatory requirement, but in appropriate cases for reasons to be recorded the deposit of at least twenty-five per cent of the debt due would be permissible, but not entire waiver. Therefore, any waiver of predeposit to the entire extent would be against the statutory provisions and, therefore, not sustainable in law. The order of the High Court is, therefore, liable to be set aside. 15. It is noticed that this Court while considering an analogous provision contained in Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI' for short) relating to pre-deposit in order to avail the remedy of appeal has expressed a similar opinion in the case of Narayan Chandra Ghosh vs. UCO Bank and Others (2011) 4 SCC 548, which reads as hereunder: 7. 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the second proviso to subsection (1) of Section 18 of the Act the amount of fifty per cent, which is required to be deposited by the borrower, is computed either with reference to the debt due from him as claimed by the secured creditors or as determined by the Debts Recovery Tribunal, whichever is less. Obviously, where the amount of debt is yet to be determined by the Debts Recovery Tribunal, the borrower, while preferring appeal, would be liable to deposit fifty per cent of the debt due from him as claimed by the secured creditors. Therefore, the condition of predeposit being mandatory, a complete waiver of deposit by the appellant with the Appellate Tribunal, was beyond the provisions of the Act, as is evident from the second and third provisos to the said Section. At best, the Appellate Tribunal could have, after recording the reasons, reduced the amount of deposit of fifty per cent to an amount not less than twenty-five per cent of the debt referred to in the second proviso. We are convinced that the order of the Appellate Tribunal, entertaining appellant's appeal without insisting on predeposit was clearly unsustainable and, therefore, the decision of the High Court in ....