Partly allowed

Kshetriya Shri Gandhi Ashram v. Debts Recovery Appellate and 3 Others

Allahabad HC21 Dec 2018WRIC/39539/2018

Case brief

AI extract

What is this about?

The High Court disposed of a writ petition challenging the Debts Recovery Appellate Tribunal's order requiring a petitioner to deposit a partial pre-deposit. The court held that full waiver is misconceived under Section 27 of the RDB Act (max 75%), modified the required deposit, and remanded the matter for compliance within two months to preserve the appeal.

What did the court decide?

The impugned order was modified to require a pre-deposit of Rs. 13,09,750/- instead of Rs. 15,00,000/-, subject to payment within two months.

Kshetriya Shri Gandhi Ashram Vs Debts Recovery… — Banking and Recovery | Allahabad HC (2018)

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Court No. - 7

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Case :- WRIT - C No. - 39539 of 2018

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Petitioner :- Kshetriya Shri Gandhi Ashram Respondent :- Debts Recovery Appellate And 3 Others Counsel for Petitioner :- Surya Narayan,Shashi Shukla Counsel for Respondent :- Sanjai Singh,Shashi Shukla

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Hon'ble Saumitra Dayal Singh,J.

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Heard Sri Surya Narayan, learned counsel for the petitioner and Sri Sanjai Singh, learned counsel for the respondent bank.

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The present petition is directed against the order dated 27.09.2018 passed by the Debts Recovery Appellate Tribunal, whereby the Appellate Tribunal has granted partial waiver in favour of the petitioner with respect to the condition of pre-deposit of the disputed recovery.

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In the above regard, it is seen that, the Debts Recovery Appellate Tribunal by it's order dated 11.12.2014 had issued a recovery certificate against the petitioner for an amount of Rs. 52,38,938.14/- pendente lite interest @ 16.75% per annum.

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Upon the appeal filed by the petitioner, the Appellate Tribunal has passed an order observing that though on date, an amount of Rs. 4 crores would have become due against the petitioner, in view of the recovery certificate having remained unsatisfied, at the same time, it has granted partial waiver and

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required the petitioner to deposit Rs. 15,00,000/- by way of pre-deposit for maintaining the appeal.

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Learned counsel for the petitioner submits that the present was a case for grant of full waiver inasmuch as on one hand, the petitioner has no money or available resources to deposit a heavy amount of Rs. 15,00,000/and on the other, the respondent bank has not made available any statement for computation of amount of Rs. 4 crores. Even with respect to amount of Rs. 52,38,938.14/- determined by the Debts Recovery Appellate Tribunal by it's order dated 11.12.2014, it has been submitted that the said computation is wholly erroneous and exaggerated. Further, it has been submitted that the bank has allowed recoverable amount to increase by not taking any action as directed by the Debts Recovery Appellate Tribunal for sale of hypothecated assets, personal movable and immovable properties of the petitioner, though the bank had affixed it's lock and sealed the assets of the petitioner.

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Learned counsel for the respondent bank upon instruction states that in the first place, the bank would not be in a position to grant concession for a complete waiver of the condition of pre-deposit required to be met by

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the petitioner, and also the bank does not propose to file counter affidavit.

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Having considered the arguments so advanced by the learned counsel for the parties, it is seen that in the first place, the claim for full waiver made by the petitioner was never entertainable by the Debts Recovery Appellate Tribunal, inasmuch as under Section 27 of the Recovery of Debts and Bankruptcy Act, 1993 as amended by the Act no. 44 of 2016, the Appellate Tribunal is empowered to grant waiver only up to the extent of 75% of the amount of debt due to the bank. Therefore, the plea of full waiver is wholly misconceived and has to be therefore rejected.

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Insofar as the learned counsel for the petitioner has pleaded that the facts of the case entitle the petitioner to maximum waiver, it is seen that the recovery certificate had been issued for an amount of Rs. 52,38,938.14/- pendente lite interest @ 16.75% per annum. Therefore, the fact that the bank may not have furnished any other certificate to the petitioner as may lead to the computation of the amount of debt to Rs. 4 crores, is largely without much substance. It is a simple matter of calculation which the petitioner could himself have also computed.

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In any case, taking a liberal approach, even if the amount of Rs. 52,38,938.14/- is taken to be the amount of debt due, still in light of the amended provisions of Section 21 of the aforesaid Act, maximum waiver that could have been allowed, would not exceed 75% of the same being Rs. 39,29,203.605/-. Thus, petitioner would remain obliged in other circumstances to pay Rs. 13,09,734.535/- to maintain it's appeal. The fact that the respondent bank may not have sold the hypothecated assets etc. may not itself be a factor that may be relevant for the purpose of consideration of waiver application, inasmuch as, as has been noted above, the maximum waiver that may be allowable to the petitioner would be Rs. 39,29,203.605/-.

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In view of the above, the present petition is disposed of and the impugned order stands modified to the extent the petitioner may deposit Rs. 13,09,750.00/- with the Debts Recovery Appellate Tribunal, within a period of two months and no more. Subject to such deposit being made by the petitioner, it's appeal may be heard and decided on merits. In the event of failure on part of the petitioner to deposit that amount, no further indulgence may be entertained by this Court.

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Order Date :- 21.12.2018 Prakhar

Kshetriya Shri Gandhi Ashram v. Debts Recovery Appellate and 3 Others

Case brief

What is this about?

What did the court decide?

Kshetriya Shri Gandhi Ashram v. Debts Recovery Appellate and 3 Others

Case brief

What is this about?

What did the court decide?

What the court decided

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