9911796707
TMI Blog2016 (5) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... not waiving the entire prerequisite statutory amount under section 21 of the Recovery of Debts Due to Bank and Financial Institutions Act, 1993 (in short DRRBFI Act, 1993). The facts giving rise to the present case are that the petitioner no.1 claims itself to be a firm involved in the business of export of woollen carpets and is aggrieved by the impugned order dated 22.1.2016 by which the Appellate Tribunal has required the petitioners to deposit 50% of the entire amount of loan as determined by the DRT. It is stated that the firm had exported woollen carpets on the basis of 90 days payment against the document and its entire transactions were insured with the Export Credit Guarantee Corporation (in short ECGC). The entire premium as required was also deposited with the Union Bank of India Bhadohi Branch Bhadohi. The premium credit limit was also ensured by the Whole Turn Over Packing Credited Guarantee (in short W.T.P.C.G.). It is also stated that the Bank has shown Zero balance in the year 2001 even then the Bank filed O.A. No. 115/04 (Union Bank of India vs. M/s Eastern Export House). The case was contested but the DRT has allowed the claim of the Bank for recovery of a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ITC Limited (supra) was rendered in the matter of Central Excise and not in relation to the DRRBFI Act, 1993, therefore, the ratio laid down in that case cannot be made applicable in the facts and circumstances of the present case. He has also placed reliance upon judgment of the Karnataka High Court in Writ Petition No. 4972 of 2014 (Kirloskar Electric Company vs. Idbi Bank Limited) decided on 18th June, 2014. For deciding the controversy it would be appropriate to quote few relevant provisions of the DRRBFI Act, 1993, the Central Excise Act, 1944 as well as the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short Act, 2002). Section 21 of the DRRBFI Act, 1993 reads as under: "21. Deposit of amount of debt due, on filing appeal. Where an appeal is preferred by any person from whom the amount of debt is due to a bank or a financial institution or a consortium of banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal seventy-five per cent of the amount of debt so due from him as determined by the Tribunal under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal 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, whichever is less: PROVIDED ALSO that the Appellate Tribunal may, for the reasons to be recorded in writing, reduce the amount to not less than twenty-five per cent. of debt referred to in the second proviso. (2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder." From the bare reading of Section 21 of the DRRBFI Act, 1993 it would transpire that the appeal shall not be entertained by the Appellate Tribunal unless the appellant deposits 75% of the amount of debt as determined by the Tribunal under section 19. However, according to the proviso to that section the Tribunal has been empowered to waive or reduce the amount of debt. From the perusal of second proviso to section 18 of the Act, 2002 it would transpire that the appeal cannot be entertained unle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idual and the State so far as the recovery of sovereign dues is concerned. While considering the application for stay/waiver of a pre-deposit, as required under the law, the Court must apply its mind as to whether the appellant has a strong prima facie case on merit. In case it is covered by the judgment of a Court/Tribunal binding upon the Appellate Authority, it should apply its mind as to whether in view of the said judgment, the appellant is likely to succeed on merit. If an appellant having strong prima facie case, is asked to deposit the amount of assessment so made or penalty so levied, it would cause undue hardship to him, though there may be no financial restrain on the appellant running in a good financial condition. The arguments that appellant is in a position to deposit or if he succeeds in appeal, he will be entitled to get the refund, are not the considerations for deciding the application. The order of the Appellate Authority itself must show that it had applied its mind to the issue raised by the appellant and it has been considered in accordance with the law. The expression "undue hardship" has a wider connotation as it takes within its ambit the case where the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 50% of the amount but it has not at all considered prima facie merit of the case. Learned counsel for the respondents contended that the order has been passed by recording reasons and the amount of statutory deposit has been reduced. On being confronted as to under which circumstance the entire statutory amount /pre requisite condition can be waived and on what ground the amount can only be reduced, learned counsel for the respondent could not show any statutory provision or any judicial pronouncement on the point enumerating the circumstances under which the entire amount can be waived and under which the amount can be reduced. Whereas, in the case of ITC Limited (supra) this court has touched this aspect of the matter, may be under the different statute, but the principles laid down by the Division Bench are near to the truth in the context of the present case too as in the present case there is provision for complete waiver provided the Appellate Tribunal is satisfied, whereas in the Central Excise Act there is no provision for complete waiver. The petitioners' case stands on better footing looking into the provision to section 21 of DRRBFI Act, 1993, therefore, in my con ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
