Mrs Vinodamma Since Dead Represented by Her L.R Sri. Suresh.S Vs the Managing Director

MRS. VINODAMMA, SINCE DEAD REPRESENTED BY HER L.R SRI. SURESH.S, S/O LATE.K.G. SHANKARANARAYANA RAO, AGED ABOUT 58 YEARS, R/AT NO. 174, 7^TH CROSS, 5^TH PHASE, 1^ST STAGE, (MAHAGANAPATHY NAGARA), WEST OF CHORD ROAD, SHIVANAGARA, BENGALURU - 560 010.

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…PETITIONER

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(BY SRI. D.R. RAVISHANKAR, SENIOR COUNSEL A/W SRI. HARSHA D JOSHI, ADVOCATE)

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AND:

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THE MANAGING DIRECTOR, KARNATAKA STATE FINANCIAL CORPORATION, 1/1, THIMMAIAH ROAD, BANGALORE - 560 052.

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HC-KAR

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THE AUTHORISED OFFICER, AND DEPUTY GENERAL MANAGER, KARNATAKA STATE FINANCIAL CORPORATION, 187, WEST OF CHORD ROAD, RAJAJI NAGAR, BANGALORE - 560 086.

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MR. S. SANJAY KULKARNI, S/O SUDINDHRA KULKARNI, AGED ABOUT 50 YEARS, NO 406, SARANGA APARTMENTS, WEST OF CHORD ROAD, BANGALORE - 560 010.

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…RESPONDENTS

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(BY SMT. BHAVANA PATIL, ADVOCATE FOR SRI. P.S. MALIPATIL, ADVOCATE FOR R1 & R2, SRI. K.N. NITESH, ADVOCATE FOR SRI. K.V. NARASIMHAN, ADVOCATE FOR CAVEATOR R3)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226

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AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO SET ASIDE THE ORDER DATED 28.01.2025 (ANNEXURE-T) PASSED BY THE DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI, IN AIR (SA) NO.318/2022 BY WHICH PEREMPTORY ORDER THE APPEAL HAS BEEN REJECTED AND CONSEQUENTLY SET ASIDE THE ORDERS DATED:16.12.2024 BY WHICH ORDER THE APPELLANT WAS DIRECTED TO PAY 50 PERCENT OF THE DEMAND AMOUNT AND ETC.,

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HC-KAR

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THIS PETITION, COMING ON FOR PRELIMINARY

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HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE D K SINGH and HON'BLE MR. JUSTICE T.M.NADAF

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ORAL ORDER

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(PER: HON'BLE MR. JUSTICE D K SINGH)

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The present writ petition is filed impugning the order dated 28.01.2025 (Annexure-T) passed by the Debt Recovery Appellate Tribunal, Chennai in IA 764/2024 (Waiver) in AIR (SA)No.318/2022.

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Sri. D.R.Ravishankar, learned Senior counsel

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submits that, the Tribunal has not given any reason for rejecting the application of the petitioner for reducing the condition of pre-deposit of 50% of the amount due from the petitioner.

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He further submits that as per Section 18, the Tribunal has discretional power to reduce the amount upto 25%. The Tribunal should have assigned some reason for

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HC-KAR

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not reducing the condition of pre-deposit of 50%. The impugned order is cryptic and does not through any light as to why the Tribunal insisted upon to deposit 50% of the amount due for maintaining the appeal.

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Learned counsels appearing for the auction purchaser and the creditor, however have submitted that the petitioner was not in a position to deposit even 25% and therefore, considering the said position, the Tribunal had directed the petitioner to deposit 50% of the amount due from him. It is further submitted that in the facts and circumstances of the case the Tribunal has not exercised its discretion in as much as the property has already been auctioned and the auction purchaser has been put in the possession. Therefore, to test the bonafide of the petitioner, the Tribunal directed the petitioner to deposit 50% of the amount due.

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We have considered the submissions. Section 18 of Securitization and Reconstruction of Financial Assets

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HC-KAR

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and Enforcement of Security Interest Act, 2002, reads as

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under:

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"(1) Any person aggrieved, by any order made by the Debts Recovery Tribunal

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1[under section 17, may prefer an appeal along with such fee, as may be prescribed] to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal.

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2[Provided that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower:]

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3[Provided further 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:

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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.]

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(2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder."

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6. The second proviso of sub section 1 of Section

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18 puts a condition for maintaining an appeal for making a

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pre-deposit before the appellate Tribunal to 50% of the

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HC-KAR

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amount of debt due from the borrower, as claimed by the secured creditor or as determined by the Debt Recovery Tribunal, whichever is less. However, it is further provided that the Tribunal may exercise its discretion for the reasons to be recorded in writing to reduce the amount of pre-deposit between 50% to 25%, but not below 25%.

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Considering the fact that the auction has

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already been taken and the petitioner has challenged the auction proceedings, we deem it appropriate to reduce the condition of pre-deposit of 50% to 30% and if the petitioner makes the deposit of 30% of the amount due from him, i.e., Rs.1,47,15,960/- within 4 weeks from today, the Debts Recovery Appellate Tribunal at Chennai should proceed with the appeal on merits and decide the same expeditiously.

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