TMI Blog2021 (2) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... between fifty per cent and twenty-five per cent of the debt due and not below twenty-five per cent, much less not towards total waiver. It is in that background, keeping in perspective the said provision, the DRAT has in the instant case ordered deposit of fifty per cent of the amount. A total waiver would be against the statutory provisions. However, in the instant case, taking note that though the issue relating to the actual amount due is to be considered by the DRAT, keeping in view the fact that the DRT has taken into consideration the earlier settlement and has accordingly decreed the claim to that extent and towards such decree since payment of a major portion is made, though by appropriation of the compensation amount and admittedly since the remaining properties belonging to respondent No.3 is available by way of mortgage and the respondents No.1 and 2 are the personal guarantors, it is deemed appropriate that in the peculiar facts and circumstances of this case to permit the predeposit of twentyfive per cent of the amount as taken note by the DRAT i.e. twenty five per cent of ₹ 68,18,92,841/-. To the said extent, the order dated 27.02.2019 passed by the DRAT on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of by this common order. 4. The brief facts leading to the present proceedings is that the respondent No.3, namely, Hindon River Mills Ltd. had availed financial assistance from the respondent No.6IFCI Ltd. The respondents No.1 and 2 had offered their personal guarantee in respect of the said financial assistance. The respondents No.1 to 3 had defaulted in repayment of the dues and the account having been classified as nonperforming asset was thereafter auctioned by respondent No.6IFCI Ltd. wherein the appellant herein was the successful bidder and accordingly, the unpaid debt and nonperforming asset was assigned in their favour. The assignment as made was assailed by the respondents No. 1 to 3 before the High Court in WP(C) No.14999 of 2006 which came to be dismissed and the SLP(C) No. 35004 of 2011 filed was taken note by this Court and in the said proceedings the settlement which was entered into between the parties was recorded and disposed of. As per the settlement, the respondents No. 1 to 3 had agreed to repay the sum of ₹ 145 Crores with interest at 15% per annum subject to the same being repaid on or before 31.07.2012. The respondents No. 1 to 3 are stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as respondents No. 1 to 3 claiming to be aggrieved by the order dated 15.03.2018 passed by DRT have preferred appeals before the DRAT. This Court at this juncture is not required to consider the merits of the rival contentions relating to the loan transaction and the quantum of recovery thereof etc., which is the matter arising in the appeal before DRAT. The present proceeding is limited only with regard to the issue pertaining to the pre-deposit contemplated in law insofar as the appeal filed by the respondents No.1 and 2 herein, before the DRAT. In that regard, the respondents No.1 and 2 herein, in their Appeal No.311 of 2018 before the DRAT had also filed an application in IA No.511 of 2018 seeking waiver of pre-deposit amounting to fifty per cent of the debt determined by the DRT. The DRAT having noticed the contentions on the said aspect and also taking into consideration that the amount of ₹ 152,81,07,159/( Rupees One Hundred Fifty-Two Crores Eighty-One Lakhs Seven Thousand and One Hundred Fifty-Nine) was received by the appellant Bank, had in that context noted that the balance of the debt due works out to ₹ 68,18,92,841/( Rupees Sixty-Eight Crores Eighteen Lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the amount of such debt so due] to be deposited under this section. (emphasis supplied) 10. A perusal of the provision which employs the phrase appeal shall not be entertained indicates that it injuncts the Appellate Tribunal from entertaining an appeal by a person from whom the amount of debt is due to the Bank, unless such person has deposited with the Appellate Tribunal, fifty percent of the amount of debt so due from him as determined by the Tribunal under Section 19 of the Act. The proviso to the said Section, however, grants the discretion to the Appellate Tribunal to reduce the amount to be deposited, for reasons to be recorded in writing, but such reduction shall not be less than twenty-five per cent of the amount of such debt which is due. Hence the pendulum of discretion to waive pre-deposit is allowed to swing between fifty per cent and twenty-five per cent of the debt due and not below twenty-five per cent, much less not towards total waiver. It is in that background, keeping in perspective the said provision, the DRAT has in the instant case ordered deposit of fifty per cent of the amount. The respondents No.1 and 2 while seeking waiver of the deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the DRT is taken into consideration and the amount received by the Bank towards the compensation amount is credited, the balance of the decretal amount payable by respondents No.1 to 3 would work out to ₹ 68,18,92,841/( Rupees Sixty Eight Crores Eighteen Lakhs Ninety Two Thousand and Eight Hundred Forty One). It is in that view, the DRAT has ordered pre-deposit of fifty per cent of the said amount which still remains to be a debt due. On that aspect, though the ultimate correctness of the actual amount due is a matter for calculation to be made in the execution proceedings, for the present, for the purpose of pre-deposit if the decree/recovery certificate issued by the DRT is taken into consideration the position is clear that even if the amount of compensation is appropriated, either before or after the decree, there would still be outstanding amount payable which would be the subject matter of the appeal in DRAT, apart from the fact that the appellant Bank in their appeal are claiming the entire amount which has fallen due since the terms of settlement was not adhered to. 13. Thus, when prima facie it was taken note by the DRAT that further amount was due and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion in the case of Narayan Chandra Ghosh vs. UCO Bank and Others (2011) 4 SCC 548, which reads as hereunder: 7. Section 18(1) of the Act confers a statutory right on a person aggrieved by any order made by the Debts Recovery Tribunal under Section 17 of the Act to prefer an appeal to the Appellate Tribunal. However, the right conferred under Section 18(1 ) is subject to the condition laid down in the second proviso thereto. The second proviso postulates 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, whichever is less. However, under the third proviso to the subsection, the Appellate Tribunal has the power to reduce the amount, for the reasons to be recorded in writing, to not less than twenty-five per cent of the debt, referred to in the second proviso. Thus, there is an absolute bar to entertainment of an appeal under Section 18 of the Act unless the condition precedent, as stipulated, is fulfilled. Unless the borrower makes, with the Appellate Tribunal, a pre-deposit of fifty per cent of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have, after recording the reasons, reduced the amount of deposit of fifty per cent to an amount not less than twenty-five per cent of the debt referred to in the second proviso. We are convinced that the order of the Appellate Tribunal, entertaining appellant's appeal without insisting on predeposit was clearly unsustainable and, therefore, the decision of the High Court in setting aside the same cannot be flawed. (emphasis supplied) 16. Having arrived at the above conclusion the issue is also with regard to the extent to which pre-deposit is to be ordered in the instant case. Though the learned Senior Advocates on either side have indicated different figures as the actual debt due as on today, we do not propose to enter into that aspect of the matter since the actual amount due is a matter which would be taken note by the DRAT while considering the appeal on merits and at the point of recovery if any, in the execution proceedings. However, for the present we would take note of the amount as indicated in the order dated 27.02.2019 passed by the DRAT. Hence, for the purpose of determining the pre-deposit, the decretal amount due is taken at ₹ 68,18,92,841/( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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