SWADESHI CEMENT LIMITED Vs. ASSET CARE ENTERPRISES LIMITED

JUDGEMENT

(1.) Petitioner has filed this Petition under Article 226 and 227 of the Constitution of India praying therein that the Order dated 12th October, 2009 passed by the Debts Recovery Appellate Tribunal, Delhi (hereinafter referred to as "Appellate Tribunal") in Appeal No. 238/2009 be quashed.

(2.) It appears that a sum of Rs. 5284.08 lakhs was due and payable by the Appellant to Respondent No. 2 as on 30th September, 2007. Respondent No. 1 is assignee of Respondent No. 2. A notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act") was issued by Respondent No. 2. to the Appellant on 5th June, 2008 demanding the outstanding dues, as aforesaid; possession notice under Section 13(4) of SARFAESI Act was also issued. Appellant challenged these notices before the Debts Recovery Tribunal (hereinafter referred to as "DRT"). Said proceedings are still pending. An interim Application being I.A. No. 396/2009 was filed, inter alia, praying therein that a Receiver be appointed to prepare the list of assets including plant and machinery and to take possession thereof and to thereafter hand over the same to the Appellant. Application was disposed of by the DRT on 11th September, 2009 whereby Appellant was directed to deposit an amount of Rs. 10 crores within ten days and another sum of Rs. 10 crores within next ten days and subject to such deposits, Respondent No. 1 was directed not to proceed with the property in question.

(3.) Instead of depositing these amounts Appellant preferred an Appeal before Appellate Tribunal challenging the Order dated 11th September, 2009 passed by the DRT. An Application was filed for waiving the requirement of pre-deposit as envisaged under Sub-Section (1) of Section 18 of SARFAESI Act. Appellate Tribunal held that Appeal cannot be entertained without Appellant depositing 25% of the debt as claimed by the secured creditor i.e. 25% of Rs. 52.84 crores which worked out to be Rs. 13.25 crores. Though the Application seeking waiver of pre-deposit was dismissed by the Order impugned before us but Appellate Tribunal ventured to touch upon the merits of the case as well. Appeal was dismissed.