TMI Blog2018 (11) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... t to which the said right becomes exercisable; ordinarily such conditions fall within the domain of procedure especially when the alteration of said conditions is not substantial, inasmuch as even after amendment, discretion is left with the DRAT to reduce the amount of pre-deposit, although not below 25% of the decreetal amount. Therefore, the law by which such conditions are varied cannot be construed to be substantive law but shall remain within the realm of procedural law - the contention of the petitioner that the amendment is prospective in effect, is not acceptable. Even if the Amendment Act 2016 that takes away the discretion of the DRAT to waive the condition of pre-deposit is assumed to be that of substantive law, the Amendment being by way of substitution, has to be construed as being of retrospective effect. Substitution of a provision of law or the words in a provision of law results in replacement by the new provision when new words are substituted in place of existing ones; therefore, the amended provision should be read as if it existed from the inception of the enactment. Also, even after amendment, the substance of the proviso to Section 21 is retained and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r could be taken in comprehension as follows: (a) The respondent No.13-Kingfisher Airlines Ltd., a Public Limited Company incorporated under the Companies Act, 1956 and now under liquidation, (hereafter also referred to as 'Kingfisher Airlines') had availed Working Capital and Term Loan Facilities from the Consortium of respondent-Banks, way back in the year 2005. The said loan/credit facilities were re-structured pursuant to a Master Debt Recast Agreement dated 21.12.2010, accompanied by various other Supplementary Agreements as its corollaries. In relation to the credit facilities aforesaid, the respondent No.14-United Breweries (Holdings) Ltd. provided a Corporate Guarantee and the petitioner, being the Group Chairman of various Companies under the umbrella of the Group called 'UB Group of Companies' furnished his Personal Guarantee. (b) The borrower Kingfisher Airlines committed default in repayment against the credit facilities aforesaid, which resulted into classifying the Loan Account as the Non Performing Asset ('NPA') by various notices issued during the period between 02.11.2011 and 31.03.2013. The respondent No. 1-State Bank of India, in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r application for condonation of delay in filing the restoration application. The petitioner claims that thereafter, i.e., on 21.03.2018, he had complied with the office objections raised in the main Appeal. (g) While dealing with the applications so moved by the petitioner, the DRAT, by its order dated 28.03.2018, directed him to deposit a sum of ₹ 3,101 Crore, on or before 25.04.2018 as a condition precedent for entertaining the appeal as per the terms of Section 21 of the Act of 1993; and subject to the rider that in default, the appeal will stand dismissed automatically without reference to the Bench. (h) The petitioner did not make any deposit in terms of the aforesaid peremptory order dated 28.03.2018 and consequently, the appeal stood dismissed. Thereafter, the petitioner filed an application seeking restoration of the dismissed appeal; and another application for condonation of delay was also filed. The DRAT, by its order dated 25.04.2018, dismissed both these applications. (i) Hence, and in the backdrop of the facts and events aforesaid, the petitioner has preferred W.P.16351/2018 challenging the peremptory order dated 28.03.2018; and W.P.22111/2018 challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies in India and abroad, have been subject to freezing order by the Courts in India and U.K. The DRAT having not adverted to this important fact, has made the impugned orders, which amount to the DRAT's refusal to exercise discretion when the same was warranted by the factual matrix of this case. In fact, financial hardship pleaded by the petitioner has not been adverted to at all. (d) The act of DRAT in mandating the deposit of a sum of ₹ 3,101 Crore as a condition precedant for entertaining the appeal constitutes an onerous condition on the petitioner and unreasonably restricts his statutory right of appeal, particularly when his properties stand freezed under different orders passed by different Court/Authorities. Such an aspect, having not been adverted to by the DRAT, there is total non-application of mind and vitiates the order impugned. (e) The DRAT could not have made the order for pre-deposit inasmuch only the applications for condonation of delay and for recall of the earlier order dated 02.01.2018 dismissing the appeal for non-prosecution were under consideration; and in view of the stage and nature of proceedings that were being treated by the DRAT, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gally untenable; the Parliament in its legislative wisdom has granted the right of appeal subject to conditions and the DRAT has, in the sound exercise of its discretion, made the impugned order requiring the pre-deposit for entertaining the appeal. This apart, a little before the DRT passed the impugned judgment and order on 19.01.2017, the petitioner had huge money and disposable properties both in India and abroad that were not subject of any freezer order at the relevant point of time. Moreover, petitioner had also received a huge sum of US$ 40 million; he had other huge monetary transactions but all these facts were withheld from Courts and the petitioner fraudulently transferred enormous amount of money to the Trusts created for the benefit of his children. These facts are mentioned in the orders passed by the Apex Court in relation to the petitioner. Therefore, the petitioner is not even entitled to suggest any ground of the alleged financial hardship. (e) The contention that the DRAT could not have made the order for pre-deposit when it was considering the petitioner's application for recalling the order of dismissal of appeal is too technical and is without substanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section. 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 fifty per cent. of the amount of debt so due from him as determined by the Tribunal under section 19: Provided that the Appellate Tribunal may, for reasons to be recorded in writing, reduce the amount to be deposited by such amount which shall not be less than twenty-five per cent. of the amount of such debt so due to be deposited under this section. 10. True it is that the right of appeal is a matter of substantive law; this right may be absolute or conditional, as may be provided by law that creates the said right; it is also well settled that the right of appeal although accrues to a party when the litigation originally commences, the same becomes exercisable after an adverse order i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to refer to the Amending Act at all 13. The question whether an amendment by way of substitution would have retrospective effect had fallen for consideration of the Full Bench of this Court in the case of Hassan Co-operative Milk Producers Societies Union Ltd. v. State of Karnataka Department of Co-operative Societies ILR 2014 KAR 4257. The Court, after considering a catena of decisions, has ruled that such amendments are retrospective in operation in the following:- 21. We would also like to examine the effect of amendment by way of substitution and to find out whether amendment by Act No.3 of 2013, by way of substitution would have retrospective operation. It is true that substitution of a provision results in repeal of the earlier provision and its replacement by the new provision. When the Legislature amends the old provision by way of substitution it intends to keep alive the old provision. The Supreme Court in ZILE SINGH (supra), while dealing with such situation observed that having regard to the totality of the circumstances centered around the issue the Court can hold that the substitution has the effect of just deleting the old provision and making the new pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved in the present case, as therein, the condition of pre-deposit was not existing in the old enactment and the new Act did not expressly or by necessary implications make the relevant provisions retrospective; and further, Section 217(4) of the new Act preserved general application of Section 6 of the General Clauses Act. The said decision, in our view, would not apply to the different Scheme of the Act of 1993 and the nature of the amendment in question. Justification in DRAT's approach: 16. The contention of the petitioner that the DRAT could not have directed the petitioner to deposit a huge sum of ₹ 3,101 Crore as a pre-condition for allowing his application for restoration of the appeal that was dismissed for non-compliance of office objections and for non-prosecution appears to be too technical and without substance. The appeal was filed on 04.10.2017; the appeal was dismissed on 02.01.2018 for non- compliance of office objections and non-prosecution; the application for restoration was filed on 05.03.2018; the office objections in the appeal were rectified on 21.03.2018. These admitted facts gave raise to a legitimate doubt as to the bona fide of the proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Commercial Court in U.K in its freezing order dated 16/17.04.2018 has further mentioned that the petitioner had bought a Ferrari 246 GTS with an estimated value of GBP 4,80,000 (approximately ₹ 4,17,60,000/-); he had entered into a Hire Purchase Agreement dated 12.08.2016 which records a payment of GBP 1,35,000 (approximately ₹ 1,17,45,000/-). As on the date of passing of the order by the DRT, there was no Freezing Injunction Order by the Courts in U.K. This Freezing Order was first made only on 24.11.2017 i.e., about ten months after the DRT made its order. These facts prima facie discredit the petitioner's version that he does not have any money to deposit. 19. The learned Senior Counsel appearing for the Consortium of Banks has submitted that the Commercial Court in U.K. has made Freezing Injunction Order dated 24.11.2017 which is affirmed in appeal; the said Order mentions about questionable transactions involving transfer of huge sums of money made by the petitioner before and after the DRT Order; the said Order also mentions about the Supreme Court Order dated 09.05.2017 finding the petitioner guilty of contempt of Court. The Supreme Court in its orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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