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TMI Blog2016 (3) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed. With this direction, the Writ Petition was disposed of. Thereafter, the learned counsel for the Petitioner appeared before us and submitted that this order may be reviewed as he was not heard before passing the said order. Since this order was passed in the morning session, we had stated that the Petitioner was at liberty to apply for review of this order by filing an appropriate application. It is in this light that the Review Petition has been filed before us. 2. Since the grievance of the Petitioner is that he was not heard before passing the order dated 10th June, 2015 and the issues raised by the Petitioner have not been dealt with by us in the said order, we have heard Mr. Shah, the learned counsel for the Petitioner, at length to examine whether the order dated 10th June, 2015 is required to be reviewed by us. 3. The learned counsel appearing on behalf of the Review Petitioner submitted that the order dated 30th June, 2014 passed by the DRAT, Mumbai in Miscellaneous Application No.237 of 2010 in Appeal No.197 of 2010 was perverse and illegal as it was contrary to the mandate of section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ESI Act. As the Petitioner did not comply with the requisitions contained in the section 13(2) notice, the Respondent - Bank proceeded to take possession of the mortgaged properties on 15th February, 2008 under section 13(4) of the SARFAESI Act. Being aggrieved by this action of the Respondent - Bank, the Petitioner filed Securitisation Application No.28 of 2008 under section 17 before the Debt Recovery Tribunal (for short, the "DRT"), Pune raising several grounds therein. To the aforesaid Securitisation Application, the Respondent - Bank also filed its affidavit in reply inter alia contending that there was no merit in the Securitisation Application and that the same ought to be dismissed. After hearing the parties, the DRT, Pune, by its detailed reasoned order dated 13th January, 2010 dismissed the Securitisation Application filed by the Petitioner. 7. Being aggrieved by this order of the DRT, Pune, the Petitioner filed an appeal under section 18 of the SARFAESI Act before the DRAT, Mumbai in around 4th March, 2010. Along with the said appeal, the Petitioner also filed a Misc Application for waiver of deposit as contemplated under the 2nd and 3rd provisos to section 18 and sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total outstanding dues of the Petitioner (after giving credit of all amounts paid/deposited) are to the tune of Rs. 63,48,914.61. 10. Be that as it may, since the outstanding amounts as on 31st March, 2012 were Rs. 52,14,200.61, the DRAT, Mumbai took the aforesaid figure into consideration before ordering the Petitioner to deposit a sum of Rs. 20,00,000/- for the purposes of entertaining its appeal under section 18 of the SARFAESI Act. Needless to mention that this amount of Rs. 20,00,000/- is less than 50% of the figure of Rs. 52,24,200.61. 11. In this factual backdrop, Mr Shah, learned counsel appearing on behalf of the Petitioner, submitted that admittedly the Petitioner had deposited a sum of Rs. 1,23,29,441/- (Rs.5,29,441/ + Rs. 1,18,00,000/-) with the Respondent - Bank against the amount claimed in the section 13(2) notice of Rs. 96,14,985.61. He therefore submitted that having deposited amounts with the Respondent - Bank more than what was claimed in the section 13(2) notice, the DRAT ought to have directed full waiver of deposit and not put the onerous condition of a further deposit of Rs. 20,00,000/- as was sought to be done in its order dated 30th June, 2014. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ought to be deposited by the borrower under section 18 of the SARFAESI Act (before its appeal can be entertained). Would it be (i) on the basis of the amount claimed by the secured creditor in the section 13(2) notice alone or (ii) whether the DRAT also has to take into account the interest accrued on the said sum till the date of filing of the appeal. 13. To understand the present controversy, it would be necessary to refer to the provisions of section 18 of the SARFAESI Act. Section 18 reads as under:- "18. Appeal to Appellate Tribunal.-(1) Any person aggrieved, by any order made by the Debts Recovery Tribunal under Section 17, may prefer an appeal along with such fee, as may be prescribed to an Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal: Provided that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower: Provided further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application;" 17. On an ex-facie reading of the said definition, it is clear that the word "debt" has been given an extremely wide meaning and means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution during the course of any business activity undertaken by such bank or financial institution under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2nd proviso to section 18(1) in this fashion, to our mind, would clearly violate the plain and unambiguous language of the said section. 19. We must mention here that after the issuance of the notice under section 13(2) and before the appeal is filed in the DRAT under section 18 of the SARFAESI Act, if the borrower has made any part payment of the debt due to the secured creditors, then credit for the same would have to be given to the borrower and for the purposes of deposit under the 2nd proviso to section 18(1), the reduced amount (after giving credit) would have to be taken into consideration for determining the amount required to be deposited by the borrower. This is simply because on the date of filing of the appeal, the debt due to the secured creditor would be reduced after giving credit for the amount already paid. 20. In the view that we have taken we are also supported by a decision of another Division Bench of this court in the case of Godavari Laxmi Co-Op. Bank Ltd. Vs. Union of India and another. (2012) 4 Mh L J 472 The facts of the case were that Respondent No. 2 therein was the borrower of the Petitioner - Godavari Laxmi Cooperative Bank Ltd., and had filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion notice on 26-12-2009. The bank is entitled under section 13(4) of the Act of 2002 to take recourse to measures provided under the said provisions to recover the secured debt on failure of borrower to discharge his liability in full within the period specified in subsection (2) of the Act. 10. In the facts of the case and considering the notice issued under section 13(2) of the Act of 2002, we find that the petitioner bank had claimed as present outstanding, an amount of Rs. 24,61,985.54 Ps. and accordingly, the charge was kept upon the subject property by intimating public in general. The bank had described the immovable property over which the charge was kept in the notice issued under section 13(4) on 26-12-2009. Under the provisions of section 17 of the Act of 2002, any person aggrieved by any of the measures referred to in sub section 4 of section 13, is entitled to approach D.R.T. Under the provisions of section 18 of the said Act, any person aggrieved by any order passed by D.R.T. under section 17 may prefer an appeal along with such fees as may be prescribed. The second proviso to section 18 of the said Act provides that no appeal shall be entertained unless the borro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling of the appeal and waiver application (4th March, 2010). However, this waiver application was heard by the DRAT on 30th June 2014. By the time, the DRAT heard the waiver application, the Petitioner had made part payments of Rs. 1,23,00,000/- (approximately) towards its debt due to the Respondent - Bank. It is in this view of the matter that the DRAT whilst determining the amount to be deposited under the 2nd proviso to section 18(1) of the Act took into consideration the figure of Rs. 52,14,200/-. Looking to these facts and the clear language of the 2nd proviso to section 18(1) of the SARFAESI Act, we do not think that the DRAT committed any error in directing the Petitioner to deposit a sum of Rs. 20,00,000/- with the Registry of the Appellate Tribunal within a period of eight weeks from the date of the said order in two equal installments. We find that the said order is not only in conformity with the provisions of section 18 of the SARFAESI Act but does complete justice between the parties as it gives credit for the amounts paid by the Petitioner to the Respondent - Bank before directing the Petitioner to deposit a sum of Rs. 20,00,000/- as a condition precedent to entertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y person by a bank or financial institution during the course of any business activity undertaken by the said bank or financial institution. When interest is specifically included in the definition of the word "debt", we see no reason why the same ought to be excluded whilst determining the amount that is to be taken into consideration for the purpose of arriving at the figure to be deposited by the borrower under the 2nd proviso to section 18(1) of the SARFAESI Act. In fact, on a perusal of the said judgment, we do not find any reason given for making such an exclusion. We, therefore, with great respect to the Delhi High Court, are unable to agree with the ratio laid down in the aforesaid decision. 24. The last judgment relied upon by Mr Shah was a decision of the Supreme Court in the case of Narayan Chandra Ghosh. (2011) 4 SCC 548 : AIR 2011 SC 1913 We find that the reliance placed on this decision is wholly misplaced. The issue before the Supreme Court in the aforesaid decision was whether the DRAT had jurisdiction to exempt the borrower preferring an appeal under section 18 of the Act from making any pre-deposit in terms of the said provision. In other words, the issue before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at deposit under the second proviso to Section 18(1) of the Act being a condition precedent for preferring an appeal under the said section, the Appellate Tribunal had erred in law in entertaining the appeal without directing the appellant to comply with the said mandatory requirement. 9. The argument of the learned counsel for the appellant that as the amount of debt due had not been determined by the Debts Recovery Tribunal, the appeal could be entertained by the Appellate Tribunal without insisting on pre-deposit, is equally fallacious. Under the second proviso to sub-section (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 an 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 pre-deposit being mandatory, a complete waiver of deposit by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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