ANIL Vs. TATA CAPITAL FINANCIAL SERVICES LIMITED

JUDGEMENT

(1.) In view of notice for final disposal issued earlier, we have heard the learned Counsel for the parties at length.

(2.) The facts relevant for considering the challenge as raised to the orders dtd. 26/9/2022 and 30/9/2022 by the Debts Recovery Appellate Tribunal, Mumbai (DRAT) are that the petitioners have borrowed an amount of Rs.3,48,50,000.00 from the respondent - creditor. The loan account became a non-performing asset on 3/10/2020 and the amount due and payable on that date was Rs.4,00,53,642.10. The creditor initiated steps for recovery of the amount due by issuing notice under Sec. 13(2) of the Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 (for short "the Act of 2002") on 21/5/2021. According to the creditor, it has taken possession of the mortgaged property belonging to the petitioners some time in May - 2021. The application filed by the creditor under Sec. 14 of the Act of 2002 was decided on 16/4/2022 and directions were issued to take over physical possession of the secured assets. Being aggrieved by the measures taken by the creditor under Sec. 13(4) of the Act of 2002, the petitioners preferred Securitisation Application No. 26/2022 under Sec. 17 of the Act of 2002. The petitioners also filed an application for interim relief therein. The petitioners filed an affidavit before the Debts Recovery Tribunal and stated that an amount of Rs.10,00,000.00 would be paid by 31/5/2022, further amount of Rs.10,00,000.00 would be paid by 30/6/2022, further amount of Rs.10,00,000.00 would be paid by 31/7/2022 and balance amount of Rs.60,00,000.00 would be paid by 31/8/2022. After considering the reply filed by the creditor, the Debts Recovery Tribunal, Nagpur (DRT) passed an order on 6/5/2022. The learned Presiding Officer permitted such deposit in the light of the undertaking given by the petitioners and directed status quo to be maintained with regard to the mortgaged property with a further direction that in case of any default of the payments to be made, the order of status quo would stand automatically vacated. It appears that payment of Rs.10,00,000.00 each to be made monthly could not be complied with by the petitioners and they sought extension of time to make such payments. An application in that regard was moved. The learned Presiding Officer, Debts Recovery Tribunal dismissed the same on 1/9/2022. Being aggrieved by the said order, the petitioners approached the DRAT challenging that order. They moved an application for grant of interim relief. The learned Chairman, DRAT on 26/9/2022 in exercise of jurisdiction under the third proviso to Sec. 18(1) of the Act of 2002 directed the petitioners to deposit total amount of Rs.1,00,000,00.00 as pre-deposit. It was noted that in that regard, the petitioners had deposited Rs.10,00,000.00 on the date of the order and further amount of Rs.10,00,000.00 was undertaken to be deposited on or before 28/9/2022. The balance amount of Rs.80,00,000.00 was directed to be deposited within a period of six weeks in two equal installments; first installment of Rs.40,00,000.00 by 19/10/2022 and second installment to be deposited before 9/11/2022. On 30/9/2022 as the requisite amounts were deposited the matter was posted on 20/10/2022 for further compliance. Being aggrieved by the direction to deposit an amount of Rs.1,00,000,00.00 by way of pre-deposit, the orders dtd. 26/9/2022 and 30/9/2022 have been challenged in the present Writ Petition.

(3.) Shri R.L. Khapre, learned Senior Advocate for the petitioners submitted that the DRAT was not justified in directing deposit of an amount of Rs.1,00,000,00.00 while exercising jurisdiction under Sec. 18(1) of the Act of 2002. Referring to the provisions of Sec. 18(1) of the Act of 2002, it was submitted that as per the second proviso thereto, no appeal was liable to be entertained unless the borrower had deposited with the DRAT 50% of the amount of debt due from him as claimed by the secured creditor or determined by the Debts Recovery Tribunal, whichever was less. In the present case, it was urged that the Debts Recovery Tribunal had merely directed to deposit an amount of Rs.1,00,000,00.00 in installments. Since the aforesaid amount was the amount determined by the Debts Recovery Tribunal, it was not permissible for the DRAT while entertaining an appeal against such order to direct amount of Rs.1,00,000,00.00 as pre-deposit. The petitioners had merely sought extension of time to deposit the balance amount of Rs.20,00,000.00 in two equal installments and the time was refused to be extended by the Debts Recovery Tribunal by its order dtd. 1/9/2022. Since this order refusing to extend the time to make payment of Rs.20,00,000.00 was under challenge, pre-deposit could have been directed only in the context of Rs.20,00,000.00 and not any higher amount. By considering the amount of debt due from the petitioners for the purposes of directing them to deposit an amount of Rs.1,00,000,00.00 under the second proviso to Sec. 18(1) of the Act of 2002, the purpose of filing the appeal stood frustrated. Since the petitioners were aggrieved only by the order refusing to extend time to pay the amount of Rs.20,00,000.00, there was no justification in directing them to deposit an amount of Rs.1,00,000,00.00 as pre-deposit. By adopting such approach, the purpose of filing the appeal stood defeated. The remedy of preferring an appeal could not be treated to be illusory in such manner. To substantiate his contentions, the learned Senior Advocate placed reliance on the decisions in i) Life Insurance Corporation of India Vs. Sanjeev Builders Private Limited And Others [(2018) 11 SCC 722]; ii) Fine Platinum (India) Limited and Another Vs. IndusInd Bank Limited, a Banking Company registered under the Companies Act, 1956 and Others [(2016) 197 Comp Cas 358]; iii) Vaseem Iqbal Kapadia Vs. Union of India [(2015) 323 ELT 353]; iv) State of Maharashtra Vs. Mishrilal Tarachand Lodha and others [AIR 1964 SC 457]; and v) Hansraj and Sons Vs. State of Jammu and Kashmir and others [AIR 2002 SC 2692]. It was prayed that the order passed by the DRAT be set aside and the amount of pre-deposit be re-determined in the light of the order impugned in the appeal.