IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30th DAY OF AUGUST, 2019 PRESENT THE HON’BLE MR. JUSTICE L. NARAYANA SWAMY AND THE HON’BLE MR. JUSTICE R. DEVDAS WRIT PETITION Nos.1824-1828/2019 (GM-DRT) BETWEEN:
1. M/S. A.W. INDUSTRIES PVT. LTD. NO.47/1, NEW GANGAMACHARI STREET MOTHINAGAR, BANGALORE – 560 002 REPRESENTED BY ITS MANAGING DIRECTOR MR.SYED TANVEER 2. MR.SYED MASOOD AHMED AGED ABOUT 64 YEARS 3. MRS.ATARUNNISA BEGUM AGED ABOUT 60 YEARS, W/O MR.SYED MASOOD AHMED 4. MR.SYED TANVEER AGED ABOUT 35 YEARS S/O MR.SYED MASOOD AHMED 5. MR.SYED MANSOOR AHMED AGED ABOUT 32 YEARS S/O MR.SYED MASOOD AHMED APPELLANTS NO.2 TO 5 ARE RESIDING AT NO.7 & 8, 1ST FLOOR, 8TH MAIN, 1ST CROSS, LIC COLONY, JAYANAGAR, BANGALORE – 560 011 … PETITIONERS (BY SRI.RAJENDRA.M.A.ADV.) AND:
1. THE AUTHORISED OFFICER YES BANK, PRESTIGE OBELISK MUNICIPAL ROAD NO.3, GROUND FLOOR KASTURBA ROAD, BANGALORE – 560 001 2. M/S. BANGALORE STEEL TRADERS OFF. NO.18, 2ND CROSS, NR ROAD, BANGALORE – 560 002 ... RESPONDENTS (BY SRI.K.V.LOKESH, ADV. FOR R1;
R2 IS HELD SUFFICIENT V/O DTD:26.02.2019) THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH/SET ASIDE THE IMPUGNED ORDERS PASSED BY THE HON’BLE DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI IN IA. NO.1031/2018 DT:21.12.2018 IN AIR (SA) 317/2018 (ANNEXURE-B) WHICH IS AGAINST THE PROVISIONS OF THE ACT AND ALSO AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND EQUITY.
THESE WRIT PETITIONS COMING ON FOR ORDERS THIS DAY, NARAYANA SWAMY J, MADE THE FOLLOWING:
O R D E R Proceedings dated 21st December 2018 in which the Debt Recovery Appellate Tribunal at Chennai had directed the petitioners for pre-deposit of 50% debt amount, which can be reduced by 25% but not less than 25% in any case; and on calculating the same, the petitioners were to make pre-deposit of Rs.70.00 lakh within four weeks time. Against the said proceedings these petitions are filed.
2. The learned counsel appearing for the petitioners submits that the debt amount due is Rs.6.33 crore and as per Section 18(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, hereinafter referred to as ‘the Act’), the borrower has to deposit with the Appellate Tribunal 50% of the amount as claimed by the Creditor or as determined by the Appellate Tribunal. Further, the Appellate Tribunal, may for the reasons to be recorded in writing, reduce the amount to not less than 25% of the debt amount. As per the said provision, the learned counsel for the petitioners submits that 25% of the debt amount comes to Rs.1,58,25,000/-, of which the petitioners have deposited Rs.1,64,98,451.72 which satisfies the mandatory requirement of Section 18 of the Act. Hence the learned counsel submits that the direction of the Appellate Tribunal to pre- deposit of Rs.70.00 lakh is contrary to Section 18 of the Act.
3. The learned counsel for the respondent-Revenue supports the order of the Appellate Tribunal and submits to dismiss these petitions. It is his further submission that the direction issued to the petitioners to deposit of Rs.70.00 lakh is in accordance with requirement of Section 18 of the Act.
4. Heard the learned counsel for the parties. The pre- condition is a mandatory requirement and unless and until the said amount is deposited, appeal shall not be registered for the purpose of adjudication. The amount which is mandatory requirement is to be deposited. Proviso (2) of Section 18 of the Act specifically states that 50% of the amount of debt due as claimed by the secured creditor or determined by the Debt Recovery Tribunal, is to be deposited and a discretionary power lies with the Appellate Tribunal by recording reasons in writing to reduce the amount to not less than 25% of the total amount due. When these are all the mandatory provisions that are to be complied with when an appeal is filed, the case of the petitioners is to be examined. It is found that the total debt amount is Rs.6.33 crore. As per the provisions of the Act referred to above, the petitioners are supposed to deposit 50% of the debt amount or which could be reduced to 25% as per the provisions of Section 18 of the Act. No such order has been passed by the Debt Recovery Appellate Tribunal for reduction of 25%. Under these circumstances, mandatory deposit of 50% of the total debt due should have been deposited by the petitioners. It is for the Debt Recovery Appellate Tribunal to exercise discretion of reducing the deposit from 50%, in any event not less than 25% and this court cannot exercise the discretion of the Tribunal. In that view of the matter, petitioners are reserved liberty to make an application to the Debt Recovery Appellate Tribunal for exercising the discretionary power of reducing the pre-condition of depositing 50% to 25% of the total debt amount. If such application is made, it is for the Debt Recovery Appellate Tribunal to consider the application and to pass appropriate orders accordingly.
5. While passing such orders, four weeks time were granted to deposit the said amount. Since the petitioners have not deposited the said amount, the appeal was dismissed. Under the circumstance, liberty is reserved to the petitioners to make an application before the Debt Recovery Appellate Tribunal for restoration of the appeal. If such an application is made, the Hon’ble Tribunal shall consider the same and pass appropriate orders. Consequent to the disposal of the petitions, IA.II of 2019 does not survive consideration. With these observations petitions are disposed of.
Sd/- JUDGE Sd/- JUDGE lnn