Disposed

Sri Nata Krishna Parua v. Uco Bank

DRAT6 Jul 2023REGULAR APPEAL/1/2023

Case brief

AI extract

What is this about?

The Appellate Tribunal addressed a preliminary objection regarding the maintainability of an appeal under the SARFAESI Act due to a disputed predeposit. The court examined whether the Registrar, in endorsing the deposit receipt at the time of filing, possessed the judicial authority to determine if the mandated 50% predeposit was sufficient and compliant with the law, or if this judicial determina

What did the court decide?

None. The issue of predeposit compliance is reserved for a subsequent hearing.

Sri Nata Krishna Parua versus Uco Bank — Banking and Recovery | DRAT (2023)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Appeal No. 01 of 2023

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(Arising out of SA No. 566 of 2022 in DRT -2 Kolkata)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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06.07.2023 Sri Nata Krishna Parua ... Appellant -VsUCO Bank & Ors ... Respondent Mr. A.K. Dhandhania, Ld. Senior Counsel, Mr. Somnath Roy Chowdhury, Learned Counsel Ms. Arpita Chowdhury, Learned Counsel Mr. Proshit Deb, Learned Counsel for the Appellants. Mr. Nimesh Mishra, Learned Counsel Mr. Souradipta Saha, Learned Counsel for the Respondent Nos. 1, 2 and 3/Bank Ms. Ishani Ghosal, Learned Counsel Mr. Prithvijoy Das, Learned Counsel for the Respondent No. 4

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THE APPELLATE TRIBUNAL :

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Heard the Learned Counsel for the parties and perused the record.

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Appeal was filed on 20.12.2022. A Caveat was filed by the Respondents. Appeal was taken up for hearing on admission on 23.12.2022. Appeal was admitted and registered. An application for recall of the order was filed by the Respondents on the ground that the order was passed exparte in his absence. After hearing the Learned Counsel for the parties I.A. No. 101 of 2023 for recalling of the order dated 23.12.2022 was allowed and the order dated

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23.12.2022 was recalled. Thereafter, the matter was heard on admission.

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Learned Counsel for the Respondent raises the preliminary objection regarding maintainability of the Appeal in view of second proviso to Section 18 of the SARFAESI Act.

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Learned Counsel for the Appellant pressed the Appeal on admission and submits that it was filed on 20^th December, 2022 wherein it was scrutinized by the Registry and Registrar endorsed that “Ld Advocate for Appellant has submitted one DD No. 326569 dated 19.12.2022 of an amount of Rs. 38,80,265/- (Rupees thirty eight lakh eighty thousand two hundred sixty five only) vide his letter dated 20.12.2022 towards 50% deposit of under section 13(2) of SARFAESI Amount.”

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On the strength of this endorsement, Learned Counsel for the Appellant submits that it is an order passed by the Learned Registrar wherein he found the pre deposit as sufficient on the date of filing of the Appeal. Accordingly, compliance of second proviso of Section 18 of the SARFAESI Act is made.

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Per contra, Learned Counsel for the Respondent submits that the Registrar has no judicial authority to decide the question of sufficiency of amount of pre deposit. Registrar has no power to decide as to whether the pre deposit made by the Appellant is sufficient or in accordance with law. He simply carries out a ministerial job as provided

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under the Rules. He has no authority to decide the question of pre deposit.

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Rule 6 of DRAT Procedure Rule 1994 reads as under:

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Presentation and scrutiny of memorandum of appeal

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(1) The Registrar shall endorse on every appeal the date on which it is presented under rule 5 or deemed to have been presented under that rule and shall sign endorsement. (2) If, on security, the appeal is found to be in order, it shall be duly registered and given a serial number. (3) If an appeal on scrutiny is found to be defective and the defect noticed is formal in nature, the Registrar may allow the appellant to rectify the same in his presence and if the said defect is not formal in nature, the Registrar may allow the appellant such time to rectify the defects as he may deem fit.

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(4) If the concerned appellant fails to rectify the defect within the time allowed in sub-rule (3), the Registrar may by order and for reasons to be recorded in writing, decline to register such memorandum of appeal.

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(5) An appeal against the order of the Registrar under subrule (4) shall be made within fifteen days of making of such order to the (Chairperson) concerned in his chamber, whose decision thereon shall be final.

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[6A (1) Any party aggrieved by an order passed by the Appellate Tribunal, on account of some mistake or error apparent on the fact of the record, desires to obtain a review of such orders, may apply for a review to the Appellate Tribunal which passed the order. (2) No application for review shall be made after the expiry of a period of [thirty days] from the date of the order and no such application shall be entertained unless it is accompanied by an affidavit verifying the application. (3) Where it appears to the Appellate Tribunal that sufficient ground for a review does not exist, it shall reject the application, and if it is satisfied with the grounds raised in the application for such review, it shall allow the application for review of the order:

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Provided that no such application for review shall be allowed without previous notice and an opportunity of being heard is given to the opposite party.]

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A bare perusal of this Rule will show that the Appeals are presented before the Registrar who has to scrutinize the same and if no defect is found he should duly register the same and should provide a serial number. If he found any defect which is formal in nature, same can be rectified in his presence and if the defect is not formal in nature, he may grant time to rectify the same. If the defect is not rectified with the time granted by him, he may decline to register the appeal whose order is appealable before the Jurisdiction of DRAT. It is an exhausted procedure prescribed under Rules. Section 18 (2) of the SARFAESI Act reads as under:

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“Provided further that no appeal shall be entertained unless the borrower deposited with the Appellate Tribunal 50% of the amount of debt due from him as claimed by the secured creditor or determined by the DRT whichever is less.

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Provided also that the Appellate Tribunal, may, for reasons to be recorded in writing, reduce the amount to not less than 25% of the debt referred to in the second Proviso.”

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It is a mandatory provision. If the compliance is not made Appeal cannot be entertained.

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Now the question arises as to what is the meaning of entertaining an Appeal? Entertaining an Appeal is a procedure which requires judicial intervention of the its judicial powers to hold as to whether the compliance of the mandatory provision has been made or not? This

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exercise of judicial powers is not and could not be delegated to the Registrar. Rather, it is to be exercised by the Appellate Tribunal only. Appellate Tribunal is defined under Section 2(a) of the Recovery of Debts and Bankruptcy Act, 1993 wherein “Appellate Tribunal” means an Appellate Tribunal established under sub-section (1) of Section 8 of the Act. Appellate Tribunal is established by the Central Government under Section 8(1) of the Recovery of Debts and Bankruptcy Act. Appellate Tribunal consists of the Chairperson only as provided under Section 9 of the Recovery of Debts and Bankruptcy Act. Accordingly, when an appeal is filed under Section 18 (2) of the SARFAESI Act to Appellate Tribunal, it is only the Appellate Tribunal which can decide as to whether compliance of second proviso of Section 18 (2) of the SARFAESI Act has been made or not.

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Accordingly, I am of the view that Registrar has no power to decide as to whether compliance of second proviso of Section 18 (2) of the SARFAESI Act or to that matter Section 21 of the Recovery of Debts and Bankruptcy Act has been made by the Appellant or not. Accordingly, the endorsement made by the Registrar regarding deposit of Rs.38,80,265/- is simply a ministerial Act which does not mean that Registrar recorded any finding about sufficiency of the amount as pre deposit.

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Now the question arises as to whether Appellant has made a pre-deposit in compliance of second proviso to Section 18 (2) of the SARFAESI Act or not?

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List on 10^th July, 2023 for hearing of this issue.

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(Anil Kumar Srivastava,J) Chairperson

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Dated 6^th July, 2023

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0/tp

Sri Nata Krishna Parua v. Uco Bank

Case brief

What is this about?

What did the court decide?

Sri Nata Krishna Parua v. Uco Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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