FORUM DIAMONDS Vs. BANK OF BARODA

JUDGEMENT

(1.) The challenge in the present writ petition is to the order dated 21 st August, 2009 passed by the Debt Recovery Appellate Tribunal at Mumbai, rejecting the prayer of the present petitioners claiming complete waiver of deposit as contemplated under section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The challenge primarily is to the order dated 7th January, 2008 passed by DRT-2, Mumbai, refusing to entertain interim relief in an application purported to have been filed under section 17 of the Act, primarily on the ground that the application was not tenable being premature, as actual physical possession of secured assets under section 13(4) had not been taken. According to the petitioner, it cannot be compelled to surrender the possession of secured assets as a condition precedent for invoking the provisions of section 17 of the Act. It is also contended that since the debt has not been determined, there cannot be an order for pre-deposit on an undetermined amount. Lastly, it is the contention that the Appellate Tribunal has failed to exercise its jurisdiction in accordance with law as it ought to have granted relief of waiver of the pre-deposit condition keeping in view the facts and circumstances of the present case.

(2.) In order to consider the merit or otherwise of these contentions, reference to certain basic facts would be necessary. The petitioner No. 1 is a partnership concern and petitioner Nos. 2 and 3 are its partners. They are carrying on the business of export of rough and polished diamonds of all kinds under the certificate issued by the Government of India dated 1st April, 1989. While exercising its power under section 13 of the Act, the authorised officer viz. officer of the respondent-bank had issued a possession notice on 30th November, 2007 in terms of section 13(2) for taking possession of the secured assets. The Presiding Officer of the Debts Recovery Tribunal passed an order dated 7th January, 2008 on an application filed under section 17 of the Act praying for restraining the bank from taking possession of the secured assets. The said authority while holding that under section 13(4), one of the measures available to secure creditor is of taking possession of secured assets of the borrower and the same could be challenged under section 17. As actual physical possession had not been taken, it was held that the application was premature and was therefore dismissed.

(3.) The petitioner filed Writ Petition (Lodging) No. 2658 of 2007 which was disposed of vide order dated 6th December, 2007 requiring the petitioners to take appropriate legal remedy as may be available to him in accordance with law. Again, the petitioners filed Writ Petition (Lodging) No. 51 of 2008. Still another writ petition filed by the petitioner being Writ Petition No. 654 of 2009 came to be disposed of vide order dated 22nd June, 2009 where the High Court declined to go into the merits of the case and the petitioners were permitted to withdraw the petition so that they could take action as contemplated under the provisions of the Act. After all this, the petitioners filed an appeal against the order dated 7th January, 2008 passed by the Presiding Officer, Debts Recovery Tribunal on the application No. 27 of 2007 which was for the prayers as noticed above and was dismissed as premature. The Appellate Authority vide its order dated 21st August, 2009 condoned the delay in filing the appeal before it and thereafter, vide order of the same date and while referring to the proviso to section 18, required the petitioners to deposit 50% of the amount of debt due from them and claimed by the secured creditor as condition precedent for entertainment and hearing of the appeal. In this order, it was noticed that the secured creditor had claimed a sum of Rs. 4,73,13,874.35 and 50% thereof should be deposited. This order, as afore-noticed, has been challenged in the present appeal.