Dismissed

A.P. Varghese v. the Chief Manager (Authorised Officer )

Kerala HC15 Nov 2019WA/2269/2017

Case brief

AI extract

What is this about?

The High Court of Kerala dismissed the writ appeal against an interim order directing a pre-deposit of Rs. 21 lakhs in a debt recovery matter. The Court held that Section 18 of the SARFAESI Act mandates pre-deposit for entertaining appeals regardless of whether the order is interim or final.

What did the court decide?

Writ appeal dismissed; order of the Debt Recovery Appellate Tribunal requiring pre-deposit of Rs. 21 lakhs affirmed.

A.P. Varghese Vs the Chief Manager (Authorised Officer ) — Company and Corporate | Kerala HC (2019)

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W.A.2269/2017

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR

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THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

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FRIDAY, THE 15TH DAY OF NOVEMBER 2019 / 24TH KARTHIKA, 1941

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WA.No.2269 OF 2017

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AGAINST THE ORDER/JUDGMENT IN OP (DRT) 69/2017(O) OF HIGH COURT OF KERALA

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APPELLANT/S:

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A.P.VARGHESE, AGED 59 YEARS, S/O.POULOSE, PYNADATH AYYAMPILLIL, PEECHANICKAD, PULIYANAM P. O., ANGAMALY, ERNAKULAM DISTRICT – 683 572.

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BY ADV.SRI.P.B.PRADEEP

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RESPONDENT/S:

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1 THE CHIEF MANAGER (AUTHORISED OFFICER), VIJAYA BANK, 1ST FLOOR, JOS ANNEXE, M. G. ROAD, ERNAKULAM, KOCHI - 682 016.

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2 THE BRANCH MANAGER, VIJAYA BANK, 1ST FLOOR, ERNAKULAM BRANCH, JOS ANNEXE, M. G. ROAD, ERNAKULAM, KOCHI - 682 016.

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3 M/S.BHAGYASREE FOOD TECHONOLOGIES (P) LTD., 3RD FLOOR, DD ANGADI, MARKET ROAD, ERNAKULAM, PIN-682 011.

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4 R.VIJAYAKUMAR, VELLAPALLIL HOUSE, SREEKALA ROAD, VADARATH ROAD, VENNALA P.O., ERNAKULAM-682 028.

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5 G.SUNDARI, Z-11, MANCHESTER PERKS I, PERKS SCHOOL ROAD, UPPILLIPAYALAM, COIMBATORE-641 015.

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W.A.2269/2017

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6 THE DEBTS RECOVERY TRIBUNAL – 1, K.S.H.B. BUILDING, PANAMPILLY NAGAR, ERNAKULAM, KOCHI - 682 036, REPRESENTED BY ITS REGISTRAR.

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7 THE DEBTS RECOVERY APPELLATE TRIBUNAL 4TH FLOOR, INDIAN BANK CIRCLE OFFICE, 55, ETHIRAJ SALAI, CHENNAI - 600 008, REPRESENTED BY ITS REGISTRAR.

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R4 BY ADV. SRI.V.B.HARI NARAYANAN R4 BY ADV. SMT.SHAZIA BINT ASHRAF

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THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 15.11.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.A.2269/2017

“CR”

JUDGMENT

Dated this the 15th day of November 2019

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S.Manikumar, CJ.

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Instant appeal is filed against an order made in O.P.(DRT).No.69 of 2017 dated 24.07.2017 with the delay of 21 days in filing the appeal. Hence, C.M.Application No.1360 of 2017 is filed for condonation of delay.

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Though respondents 3 and 5 have not been served, as the issue involved in the present appeal is as to whether pre-deposit has to be made as ordered by the Debt Recovery Appellate Tribunal, we propose to take up the main appeal itself for hearing.

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Before the writ Court, learned counsel for the appellant/petitioner has submitted that the Debt Recovery Appellate Tribunal by Ext.P9 order, directed pre-deposit to entertain the appeal on file. The petitioner has also pleaded that if time is granted for making pre-deposit, then he will be able to comply with the said requirement for the purpose of maintaining the appeal before the Debt Recovery Tribunal.

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Holding that pre-deposit for entertaining an appeal is statutory and taking note of the alternate submission of the learned counsel for the appellant, writ Court directed the petitioner to effect the pre-deposit of Rs.21 lakhs on or before 31.08.2017 and to produce proof for payment before the Debt Recovery

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W.A.2269/2017

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Tribunal, who shall restore the petition preferred by the petitioner and proceed

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to dispose of the same on merits, after hearing the parties therein.

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Being aggrieved by the order made in O.P.(DRT).No.69 of 2017, instant appeal is filed.

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Contention made before us is that the appeal was filed only as against an interim order and therefore there is no requirement to make predeposit. We are not inclined to accept the said contention for the reason that as per Section 18 of the Secularization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, any person aggrieved, by any order made by the Debts Recovery Tribunal under Section 17, may prefer an appeal alongwith 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. For brevity, Section 18 of the Act is reproduced.

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“18. Appeal to Appellate Tribunal.- (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal 2[under Section 17, may prefer an appeal alongwith 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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3[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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4[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

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W.A.2269/2017

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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 the 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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Objects and Reasons – Clause 18.- this clause contains provisions relating to the appeal to Appellate Tribunal.

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Sub-clause (1) of this clause provides that any person aggrieved by any order made by the Debts Recovery Tribunal under Clause 17 may prefer an appeal to the Appellate Tribunal within thirty days from the date of receipt of the order of the Debts Recovery Tribunal.

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Sub-clause (2) of this clause provides that 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 and rules made thereunder.”

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Statute does not distinguish an interim order or a final order made

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in the SARFAESI application filed under Section 17 of the Act. Section 18 starts with an opening sentence that any person aggrieved, by any order by the Debt Recovery Tribunal, shall make a pre-deposit of 50% of the debt referred to in 2^nd proviso to Section 18 of the Act. An order passed in an interim application is also falls within the ambit of Section 18 of the Act.

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