Disposed

M/S Hotel Seagate v. J.M.Financial Assets Reconstruction Company Pvt. Ltd.

Kerala HC8 Jun 2022WP(C)/3892/2021

Case brief

AI extract

What is this about?

This writ petition challenged an order of the Debt Recovery Appellate Tribunal directing a 25% pre-deposit as a condition for maintaining an appeal. The High Court directed the Tribunal to reconsider the matter upon deposit of Rs. 20 lakh within three weeks and set aside a specific liability outside the 25% limit.

What did the court decide?

The impugned order directing a deposit of Rs. 1,20,00,000/- was set aside; the petitioners were directed to deposit Rs. 20,00,000/- within three weeks for reconsideration of the appeal.

M/S Hotel Seagate Vs J.M.Financial Assets… — Civil Procedure and Limitation | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE GOPINATH P.

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WEDNESDAY, THE 8^TH DAY OF JUNE 2022 / 18TH JYAISHTA, 1944

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WP(C) NO. 3892 OF 2021

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AGAINST THE ORDER IN OA 531/2015 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM

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PETITIONERS:

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1 M/S HOTEL SEAGATE (FORMERLY M/S K. C. THOMAS AND CO.), PATHADIPALAM, SOUTH KALAMASSERY, ERNAKULAM - 683104, REPRESENTED BY ITS MANAGING PARTNER, MR. K. T. MATHEW.

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2 K. T. MATHEW S/O. K. M. THOMAS, MANAGING PARTNER, M/S HOTEL SEAGATE, KATTIVEETIL HOUSE, PERAVOOR ROAD, IRITTY P. O., KANNUR - 670703.

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3 NISHAD MATHEW S/O. K. T. MATHEW, PARTNER, M/S HOTEL SEAGATE, 2B, SKYLANE GATE WAY, SOUTH KALAMASSERY, ERNAKULAM - 683104.

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4 MALABAR PLANTATIONS HAVING ITS OFFICE AT CHUZHAIL, TALIPARAMBA TALUK, KANNUR DISTRICT - 674101, REP. BY ITS MANAGING PARTNER, MR. K. T. MATHEW

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5 LEELAMMA MATHEW W/O. K. T. MATHEW, KATTIVEETIL HOUSE, PERAVOOR ROAD, IRITTY P. O., KANNUR - 670 703.

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BY ADVS. S.EASWARAN SMT.K.V.RAJESWARI

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RESPONDENTS:

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1 J.M.FINANCIAL ASSETS RECONSTRUCTION COMPANY PVT. LTD. HAVING ITS REGISTERED OFFICE AT VII FLOOR, CNERGY, APPASAHEB, MARATHE MARG, PRABHADEVI, MUMBAI - 400025.

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2 THE DEBT RECOVERY APPELLATE TRIBUNAL 4TH FLOOR, INDIAN BANK CIRCLE OFFICE, NO.55, ETHIRAJ SALAI, CHENNAI - 600001, REPRESENTED BY ITS REGISTRAR.

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BY ADVS. SUNIL SHANKER VIDYA GANGADHARAN

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.P (C) No.3892/2021

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J U D G M E N T

The petitioners have approached this Court challenging Ext.P3 order of the Debts Recovery Appellate Tribunal (DRAT) through which the petitioners have been directed to make a pre-deposit of 25% as a condition for maintaining the appeal against final order of the DRT dated 14-11-2019 in O.A. No.531/2015.

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The learned counsel appearing for the petitoi0ners would submit with reference to provisions of Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 that the Appellate Tribunal has, while passing the impugned order not considered the circumstances which would enable the Tribunal to reduce the mandatory pre-deposit to a sum equivalent to 25% of the amount adjudicated as due by the Debts Recovery Tribunal (DRT). It is submitted that the petitioners had filed a petition seeking waiver of the mandatory pre-deposit of 50% and had sought the indulgence of the Tribunal in prosecuting the appeal by paying 25% of the amount adjudicated by the DRT.

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The learned Standing Counsel appearing for the respondent bank submits that there is absolutely nothing illegal in Ext.P3 order. He submits that the Appellate Tribunal has taken note of the circumstances and has concluded that the petitioners are liable to deposit of Rs.1,20,00,000/- which not even 50% of the amount adjudicated by the Tribunal. It is submitted that the reduction to 25% is a discretion vested in the Appellate Tribunal and the petitioners cannot ask for it as a matter of right. It is also pointed out that the petitioners have deposited only a sum of Rs.60 lakhs which is not even equivalent to 25% of the amount adjudicated by the Tribunal.

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W.P (C) No.3892/2021

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Having heard the learned counsel for the petitioners and the learned Standing counsel for the respondent Bank and having perused Ext.P3 order, I am of the opinion that Ext.P3 is silent as to why the Tribunal has decided that it cannot allow the petitioners to prosecute that appeal by paying 25% of the amount adjudicated by the DRT. I am of the opinion that since the petition for waiver had been filed and the petitioners had sought for consideration of appeal upon paying 25% of the amount determined by the Tribunal, it was incumbent on the Appellate Tribunal to give reasons as to why the petitioners cannot be permitted to pursue the appeal in the manner aforesaid. However taking note of the submission of the learned standing counsel for the Bank that the petitioners have not even deposited 25% of the amounts adjudicated by the Tribunal, I direct that on the petitioners satisfying the said condition, Ext.P2 petition shall be reconsidered and fresh orders shall be passed by the Appellate Tribunal after notice to both sides. To enable the passing of a fresh order, Ext.P3 to the extent it holds that the petitioner is liable to deposit a sum of Rs.1,20,00,000/- as a condition for maintaining the appeal will stand set aside. This will be on condition that the petitioners deposit a sum of Rs.20,00,000/- before the Appellate Tribunal within 3 weeks from the date of receipt of a copy of this judgment.

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Writ petition is disposed of as above.

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Sd/- GOPINATH P. JUDGE

AMG

W.P (C) No.3892/2021

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APPENDIX OF WP(C) 3892/2021

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PETITIONER EXHIBITS

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EXHIBIT P1 TRUE COPY OF MEMORANDUM OF APPEAL FILED BEFORE THE DEBT RECOVERY APPELLATE TRIBUNAL.

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EXHIBIT P2 TRUE COPY OF THE APPLICATION I.A.168/2019 SEEKING WAIVER OF THE PRE DEPOSIT FILED BY PETITIONER.

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EXHIBIT P3 TRUE COPY OF THE ORDER DATED 28.12.2020 PASSED BY THE 2ND RESPONDENT DEBT RECOVERY APPELLATE TRIBUNAL IN AIR 395/2019.

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EXHIBIT P4 TRUE COPY OF THE DEMAND DRAFT DATED 06.01.2021 FOR RS. 60,00,000/- IN VAVOUR OF THE REGISTRAR, DRAT, CHENNAI.

M/S Hotel Seagate v. J.M.Financial Assets Reconstruction Company Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

M/S Hotel Seagate v. J.M.Financial Assets Reconstruction Company Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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