The DRAT dismissed the appeal filed by borrowers challenging a direction to deposit 50% of the debt before filing an appeal against the Recovery Officer's order. The Tribunal held the direction was statutory under Section 30-A and no legal violation was found.
Appeal MA 2/2021 is dismissed with costs. All pending interlocutory applications stand closed.
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MA 2/2021
IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI
Dated the 28th of September, 2022
PRESENT: Hon’ble Mr. Justice S. Ravi Kumar CHAIRPERSON
MA 2/2021
[D No. 97/2019 (AOR) in OA No. 89/2017 on the file of DRT-II, Bengaluru]
Between
Both 1 & 2 are residing at No.536, 16th Main, 3rd Block, Behind BDA Complex, Koramangala, Bangalore – 560 034.
Now at:
No.536, 16th Main, 3rd Block, Behind BDA Complex, Koramangala, Bangalore – 560 034.
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And
….. Respondents
Counsel for Appellant : Mr. M. A. Rajendra Counsel for R1 Bank : Mr. P. V. Ramachandran Counsel for R2 : Sr. Advocate Mr. E.Omprakash for M/s. Thriyambak J. Kannan
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ORDER
Appellants herein filed objection Petitions before Recovery Officer in DRC No. 368/2018 and Learned Recovery Officer through Order dated 23.02.2019 dismissed Objection Petitions holding that objections raised are frivolous, baseless and devoid of merits.
Aggrieved by Orders of Recovery Officer, Appellants herein filed an Appeal in AOR No.97/2019 under Section 30 of Recovery of Debts and Bankruptcy Act (RDB Act), 1993, and Learned Presiding Officer, DRT-II, Bengaluru, directed Appellants to deposit 50% of debt due as determined by Tribunal, as required under Section 30-A of RDB Act, 1993, for entertaining the Appeal.
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Aggrieved by said Order, Appellants filed Writ Petitions No. 10881-10885/2019 before Hon’ble High Court of Karnataka, and Hon’ble High Court by Order dated 11.06.2019, disposed of Writ Petitions granting liberty to Appellants to file appropriate Appeal before DRAT, directing DRAT to decide Stay Petition within two weeks from the date of its filing, and till such Application is filed and decided, Hon’ble High Court observed interim stay granted earlier shall continue. In pursuance of said Order, present Appeal is filed on 03.07.2019.
Heard Learned Advocates of both sides.
3. Learned Advocate for Appellants commenced his
arguments contending that orders in OA are ex parte , and Recovery Officer sold entire extent of property, though it is not necessary to meet amount due to Certificate Creditor, and property is divisible. Immediately, Advocate for opposite parties objected to it, and submitted that, Appellants cannot be
allowed to argue as to merits of the case, as Appeal preferred
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before this Tribunal is against Order dated 08.02.2019, which is in respect of direction to deposit money as per provisions of Section 30-A of RDB Act, 1993.
4. On an examination of record, as rightly pointed out by Advocates appearing on behalf of Respondents, Appeal is against Order dated 08.02.2019, which is a direction given to deposit a sum of Rs.2,12,20,076/-, in compliance of Section 30-A of RDB Act, 1993. Therefore, objection of Respondents is sustained, and Advocate for Appellants is requested to confine his arguments only to impugned Order dated 08.02.2019, and
the grounds of challenge in respect of that Order.
5. Advocate for Appellants submitted that Order of Tribunal
below is against the principles of natural justice and law. It is submitted that when Application is to modify or to recall the Recovery Certificate, to sell a portion of land required, out of which, amount determined could be realized, insisting deposit
under Section 30-A of RDB Act, 1993, is not correct. He further
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submitted, when Application filed under Section 30 of RDB Act, 1993, could be modified, insisting deposit under Section 30-A of RDB Act, 1993, is not correct, therefore, Order of Tribunal below is liable to be set aside.
6. On the other hand, Advocates appearing on behalf of Respondents submitted that as per Section 30 of RDB Act, 1993, a right of Appeal is provided against the Orders of Recovery Officer, but when such Appeal is filed by a person from whom the amount of debt is due to Bank or Financial Institution, shall deposit 50% of amount as due or determined, for entertaining the Appeal as per Section 30-A of said Act, since Appellants are borrowers, therefore, Tribunal below rightly directed Appellants to deposit 50%, and there is no wrong in the said Order. It is further submitted that Order dated 08.02.2019 is a consent Order i.e., on the request of Appellants, which cannot be challenged by way of an Appeal. It is submitted that Appellants, without depositing said amount, filed Interlocutory Application for extension of time, and time is
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also extended upto 20.03.2019, and as Appellants failed in making deposit, Final Orders are passed on 21.03.2019, and those Orders are not challenged, therefore, Appeal is misconceived.
7. In order to appreciate contentions of both parties, original records are called for, and I have verified original records. On 08.02.2019, Tribunal below passed following Order.
“LCs for both present. As per Section 30 A of RDB Act, appellant is required to deposit 50% of amount due as determined by this Tribunal. LC for Appellant seeks 4 weeks time for compliance of section 30 A. Hence Appellant is directed to deposit 50% of amount due, as determined i.e. Rs.2,12,20,076/- with RO, on or before 8/3/19, failing which this Appeal will stand dismissed. R.B. is directed to maintain status quo till then. For compliance 11/3/19 .”
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From the above Order, it is clear that, Appellants herein are directed to deposit Rs.2,12,20,076/-, which is 50% of amount determined, on or before 08.03.2019, failing which Appeal shall stand dismissed, and posted the matter to 11.03.2019 for compliance. On 11.03.2019, Appellants herein filed an Interlocutory Application for extension of time, and on that, matter was posted to 12.03.2019, and on 12.03.2019, a detailed Order is passed extending time upto 20.03.2019 for compliance of deposit, and failure to comply with said condition, would result in automatic dismissal, and posted the matter to 21.03.2019 for compliance. On 21.03.2019, as Appellants filed a Memo along with stay Order of Hon’ble High Court of Karnataka in WP No. 10881/2019, Tribunal below posted the matter to 12.04.2019, and thereafter, on 17.06.2019, Orders are passed as per final Orders of Writ Petitions, therefore, present Appeal is filed, and this Tribunal granted interim Orders.
8. As rightly pointed out by Advocates for Respondents,
Order dated 08.02.2019, as it reads, is to be treated as a
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consent Order, because Advocate for Appellants prayed for four weeks time for making deposit as required under Section 30-A of RDB Act, 1993. When requested time is granted, I fail to understand as to how Appellants are aggrieved by that Order. One can understand if requested time is not granted, and Tribunal on its own, fixed some arbitrary time, then, it may be accepted that party is aggrieved. Further, even after four weeks, when Interlocutory Application is filed, further time is granted upto 20.03.2019, which means, Appellants gained almost another two weeks time, though on 08.02.2019, request of Appellants is for four weeks time. Advocate for Appellants tried to convince that no deposit is required under Section 30-A of RDB Act, 1993, but I am not in agreement with his submission, since provision is very clear, and from the record, it is very much clear that Recovery Certificate is already issued against Appellants for a sum of Rs.3,41,07,747/- with future interest as prayed for in OA from the date of filing of Original Application till realization.
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9. It is not in dispute, by the date of Order of Recovery Officer, amount due from Appellants together with interest and costs, is more than Rs.4 Crores. Considering the same, Tribunal below directed Appellants to deposit Rs.2,12,20,076/-. It is not the case of Appellants that Rs.2,12,20,076/- do not represent 50% of amount due from Appellants. The entire contention is that, entire extent of property is sold, though it can be divisible, and roughly 1/3rd extent is sufficient to meet the amount determined in Recovery Certificate. As already observed earlier, Appellants cannot be allowed to argue as to the merits of Order of Recovery Officer, and they have to show as to how Order dated 08.02.2019 is contrary to law.
10. As already observed above, there is absolutely no violation of law, and Tribunal below rightly insisted deposit, which is mandatory under Section 30-A of RDB Act, 1993, and having prayed for four weeks time for complying with said provision, it is not fair on the part of Appellants to contend that it is an illegal Order. For these reasons, I am of the considered view
that, Appeal is devoid of merits, and there are absolutely no
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grounds to interfere with Order dated 08.02.2019 and Appeal is
liable to be dismissed.
11. In the result, Appeal MA 2/2021 is dismissed with costs. All pending IAs, if any, stand closed.
[Dictated to Athistamani, PS transcribed by her, corrected, signed and pronounced by me in open court, this 28th of September, 2022]
Sd/- [ Justice S. Ravi Kumar ] CHAIRPERSON
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2 issues framed by the court
Whether the Debt Recovery Appellate Tribunal was correct in directing appellants to deposit 50% of the determined debt amount under Section 30-A of the RDB Act, 1993 to entertain an appeal against the
Whether the order directing the deposit constitutes a consent order and is therefore not challengeable in appeal.
2 provisions across 1 enactments
Fazler Rahman and Ors.
The Senior Manager, Bank of Baroda
Mohammed Idress
S. Ravi Kumar
As recorded by the court registry
8 orders share this CNR
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