TMI Blog2020 (7) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... n inasmuch as a guarantor's liability is co-extensive with that of the principal debtor under Section 128 of the Indian Contract Act, 1872. Under the second proviso to Section 18(1) of the SARFAESI Act, a borrower is required to pre-deposit 50% of the amount of the debt due from him either as claimed by the secured creditor or as determined by the DRT, whichever is less. The third proviso empowers the DRAT to reduce the pre-deposit to an amount not less than 25% of the debt for reasons to be recorded in writing. The pre-deposit provision (the second and third proviso) in Section 18 is applicable only to borrowers, as defined in the SARFAESI Act. In addition, the DRAT is vested with the discretion to reduce such pre-deposit to not less than 25% of the debt. Hence, the provision cannot be said to be arbitrary, onerous or unreasonable. Mr. Subramaniyan had also contended that his appeal before the DRAT was in respect of the dismissal of an application under Section 5 of the Limitation Act and, therefore, the order of the DRT should not be construed as an order under Section 17 of the SARFAESI Act - Once the Section 5 application is rejected, it is tantamount to a rejection by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court granting liberty to the Petitioner herein to challenge the order dated 27.04.2011 by initiating action in a manner known to law. Pursuant thereto, SA.SR.No.8187 of 2018 was filed before the DRT Madurai along with an application to condone delay. The said application to condone delay was dismissed by order dated 08.07.2019. An appeal was filed as against the order dated 08.07.2019 before the Debts Recovery Appellate Tribunal (the DRAT) under Section 18 of the SARFAESI Act on 18.07.2019. An application to waive the pre-deposit was filed by way of I.A. No.754 of 2019. The said waiver application was disposed of by holding that not less than 25% of the debt due should be pre-deposited and by directing the Appellant therein, who is the Petitioner herein, to deposit a sum of ₹ 1.51 lakhs with the Registrar of the DRAT within four weeks from 30.09.2019. 3. The DRAT order dated 18.7.2019 was challenged in W.P. No.30324 of 2019 on the ground that the requirement of pre-deposit is not applicable because the appeal before the DRAT is against an order under Section 5 of the Limitation Act, 1963 (the Limitation Act), and not under Section 17 of the SARFAESI Act. The deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r had exceeded the limitation period of 45 days and therefore was constrained to file I.A. No.2712 of 2018 so as to condone the delay. The said I.A. was rejected by order dated 30.09.2019. This order was challenged in W.P. No. 30324 of 2019. By order dated 23.10.2019 in W.P. No.30324 of 2019, a Division Bench of this Court directed the DRAT to pass an appropriate order in the application for waiver of pre-deposit. Nevertheless, the DRAT, by order dated 17.12.2019, reiterated its earlier order and directed the Petitioner to pre-deposit a sum of ₹ 1.51 lakh. According to the learned counsel for the Petitioner, the direction to pre- deposit a sum of ₹ 1.51 lakhs violates the decision of the Constitution Bench of the Hon'ble Supreme Court in Mardia Chemicals because the Petitioner challenged an order under Section 5 of the Limitation Act and not under Section 17 of the SARFAESI Act. To put it differently, it is in the nature of a proceeding before a court of first instance. He further contends that Section 18(1) of the SARFAESI Act and the second proviso thereto are unconstitutional in as much as a pre-deposit is being insisted upon without differentiating between appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court dealt with re-litigation as an example of abuse of process and held as under: 44. One of the example cited as an abuse of process of the court is re-litigation. It is an abuse of the process of the Court and contrary to justice and public policy for a party to re-litigate the same issue which has already been tried and decided earlier against him. The re-litigation may or may not be barred as res judicata. But if the same issue is sought to be re-agitated, it also amounts to an abuse of the process of the Court. A proceeding being filed for a collateral purpose, or a spurious claim being made in litigation may also in a given set of facts amount to an abuse of process of the court. Frivolous or vexatious proceedings may also amount to an abuse of the process of the court especially where the proceedings are absolutely groundless. The Court then has the power to stop such proceedings summarily and prevent the time of the public and the court from being wasted. Undoubtedly, it is a matter of the Court's discretion whether such proceedings should be stopped or not; and this discretion has to be exercised with circumspection. It is a jurisdiction which shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal, 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. 10.Upon examining Section 18(1), we find that the first proviso indicates that different fees would be prescribed for filing of appeals by borrowers and by persons other than borrowers. This proviso has been inserted because an appeal under Section 18 may be filed by any aggrieved person. By way of illustration, a lessee, a person, other than the borrower, claiming title over the mortgaged/charged property, or any any other person affected by the measures under Section 13(4) of the SARFAESI Act could be an aggrieved person. Thus, such aggrieved persons are not always borrowers. Consequently, the second proviso regarding pre-deposit applies only when the appellant is a borrower. The word borrower is defined in Section 2(f) as under: borrower means any person who has been granted financial assistance by any bank or financial institution or who has given any guarantee or created any mortgage or pledge as security for the financial assistance granted by any ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le but for the bar under Section 34 of the Act in the present case. We may refer to a decision of this Court in Ganga Bai v. Vijay Kumar [(1974) 2 SCC 393] where in respect of original and appellate proceedings a distinction has been drawn as follows: (SCC p. 397, para 15) There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring a suit of civil nature and unless the suit is barred by statute one may, at one's peril, bring a suit of one's choice. It is no answer to a suit, howsoever frivolous to claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute. 64. The condition of pre-deposit in the present case is bad rendering the remedy illusory on the grounds that: (i) it is imposed while approaching the adjudicating authority of the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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