Allowed

Mrs. Indrani Kailash, v. The Debts Recovery Appellate

Madras HC16 Nov 2017WP/24185/2017

Case brief

AI extract

What is this about?

This High Court allowed a writ petition challenging DRAT orders directing the petitioner to make a pre-deposit for the entire debt. The court held the petitioner need only deposit 25% of her specific liability and quashed the higher deposit requirement.

What did the court decide?

Orders dated 28/4/2017 and 26/5/2017 set aside. Petitioner permitted to deposit Rs. 25 lakhs within six weeks to process the appeal.

Mrs. Indrani Kailash, Vs The Debts Recovery… — Contract and Commercial Disputes | Madras HC (2017)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 16/11/2017

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C O R A M

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THE HON'BLE Mr.JUSTICE S.MANIKUMAR AND THE HON'BLE Mr.JUSTICE R.SURESH KUMAR

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Writ Petition No.24185 of 2017

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Indrani Kailash ..Petitioner Vs 1. The Debts Recovery Appellate Tribunal rep. by its Registrar 55 Wellington Estate, IV Floor Ethiraj Salai Chennai 600 105. 2. The Debts Recovery Tribunal - II rep. by its Registrar Deva Towers, IV Floor 770 A Anna Salai Chennai 600 002. 3. Tamil Nad Mercantile Bank Limited Pondy Bazaar Branch No.31 Theagarayar Road Chennai 600 017. 4. M/s. Moolchand Exports Ltd rep by Official Liquidator High Court Chennai. 5. Mr.Moolchand Kothari B.K.Kothari (Deceased) 6. Mr.Santhosh Kumar Kothari 7. Mr.Pradeep Kothari 8. Mr.Jayaprakash Kothari 9. Mr.Omprakash Kothari 10. Ms.Kasturibai 11. Mrs.Shakuntala 12. M/s. Reet Bottling Company 13. Mr.P.S.Kannan 14. Mr.Alagia Nambi 15. Mr.Mohan 16. Mr.A.D.Ravirajan 17. Mr.A.T.Sudharshan

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https://hcservices.ecourts.gov.in/hcservices/

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Mr.Yousuf

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B.K.Metal Products 55 Godown Street Chennai 600 001.

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Mrs.Kasthuri Devi Kothari

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Mrs.Rajkumar Bisani

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Mrs.Saroj Kumar Rathi. ...Respondents

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Prayer: Petition filed under Article 226 of the Constitution of India praying for the issuance of a writ of certiorari to call for the records pertaining to order dated 28/4/2017 made in I.A.No.414 of 2014 in A.I.R.No.927 of 2009 and the consequential order dated 26/5/2017 made in I.A.No.414 of 2014 in A.I.R.No.927 of 2009 on the file of the Hon'ble Debts Recovery Appellate Tribunal, Chennai, first respondent herein and quash the same.

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For petitioner ... Mr.A.V.Arun For respondents ... R.R.1 and 2 - Tribunal Mr.V.Chandrasekaran for R.3 R.R.4 to 22 - given up O R D E R (Order of the Court was made by S.MANIKUMAR, J)

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Order impugned in this writ petition, made in I.A.No.414 of 2014, in A.I.R.No.927 of 2009, dated 28/4/2017, reads thus:"Ld. Counsel Mr.R.Sugumaran for appellant present. Ld. Counsel Mr.Parivallal for R.1 present.

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Heard on I.A.No.414 of 2014 application for waiver.

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Appellant has challenged the order dated 30/10/2009 of DRT-II, Chennai, passed in O.A.No.109 of 2007 by which Bank was entitled for recovery of Rs.5.16 crores from appellant also.

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Ld. Counsel submits that the appellant is a subsequent purchaser of the flat which will represent only a part of the property of the borrower and her liability cannot be exceeded than the part she has purchased from the borrower.

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Ld. counsel for R.1 Bank submits that DRAT cannot entertain any appeal without ensuring the pre-deposit. Debt amount has https://hcservices.ecourts.gov.in/hcservices/ increased many folds in the last ten years.

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Without expressing any opinion on the merits of the case, for the purpose of this appeal, I presume the debt amount to be Rs.5.16 crores and in view of the fact that DRAT cannot entertain any appeal without ensuring the pre-deposit of 25%. I hereby direct the appellant to make a pre-deposit of Rs.1.30 crores. Out of this, first instalment of Rs.70 lakhs shall be deposited with the Registrar of this Tribunal within four weeks from today and the second instalment of Rs.60 lakhs shall be deposited in next four weeks thereof. It is made clear that in the event of failure to comply with the first instalment, the appeal shall dismissed without any reference to this Tribunal.

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List for confirmation of deposit of first instalment of Rs.70 lakhs on 26/5/2017.”

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Consequent to the failure to deposit, A.I.R.927 of 2009, has been dismissed, on 26^th May 2017 and the order reads thus:-

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“Vide order, dated 28/4/2017, Tribunal has directed the appellant to make a predeposit of Rs.1.30 crores in two instalments. First instalment has not been offered to be tendered by the appellant.

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In view of the fact that Bank is looking for recovery of Rs.5.16 crores since last ten years i.e., from 2007 and DRAT cannot entertain any appeal without ensuring the pre-deposit, hence the appeal stands dismissed for want of compliance.”

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Though the above said orders have been challenged, on various grounds, prima facie, we are of the view that the writ petitioner, ought not to have been directed to pay pre-deposit of Rs.1.30 crores, to be paid, by all the defendants in O.A.No.109 of 2007 and more so, the flat owners/defendants 9 to 17 in O.A.No.250 of 1997 of 2007 on the file of the Debts Recovery Tribunal, Chennai, stated to have purchased flats from Mr.R.Murali, the Power of Attorney of Ms.Kasturibai/eighth defendant.

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At best, the writ petitioner/defendant No.9, could have been directed to make pre-deposit of a sum, equivalent to 25% of her liability, in exercise of powers, under the proviso to Section 18 of the Act, if the Appellate Authority is satisfied, and for the reasons to be recorded in writing, with reference to the subject property mortgaged with the Bank, and https://hcservices.ecourts.gov.in/hcservices/ not the entire liability.

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Mr.A.V.Arun, learned counsel for the petitioner submitted that property is worth 1 crore and that the writ petitioner is also a retired Teacher, with no resource.

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Mr.V.Chandrasekaran, learned counsel for the Bank/third respondent fairly submitted that Debts Recovery Appellate Tribunal, ought to have considered, as to whether there could be an order of the Debt Recovery Tribunal, fastening liability on the writ petitioner/ninth defendant, to pay the entire loan amount, with interest. We place on record the above submission.

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Having regard to the above said submissions and considering the material on record, we are of the view that the Appellate Tribunal was not right in exercising its jurisdiction, directing the writ petitioner, one of the flat purchasers, to make pre-deposit for the entire amount, due and payable by all the debtors. Considering the material on record, we are of the view that it is suffice to direct the writ petitioner, to deposit Rs.25 lakhs with the Registrar, Debts Recovery Appellate Tribunal, for entertaining the appeal against the order made in O.A.No.109 of 2007 dated 30/10/2009, on the file of the Debts Recovery Tribunal - II, Chennai.

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For the reasons stated above, writ petition is allowed and the orders, dated 28/4/2017 and 26/5/2017, made in A.I.R.No.927 of 2009, on the file of the Debt Recovery Appellate Tribunal, Chennai, are set aside. Writ petitioner is permitted to deposit Rs.25 lakhs with the Registrar, Debts Recovery Appellate Tribunal, Chennai, within a period of six weeks, from the date of receipt of the copy of this order. On such deposit and filing memo, Registry of Debts Recovery Appellate Tribunal is directed to process the appeal, and assign regular appeal number. Debt Recovery Appellate Tribunal, Chennai, is directed to dispose of the appeal, within a period of two months, thereafter. No costs. Consequently, the connected Miscellaneous Petition is closed.

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Sd/-

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Assistant Registrar(CS-VII)

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//True Copy//

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Sub Assistant Registrar

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mvs.

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https://hcservices.ecourts.gov.in/hcservices/

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The Registrar
Debts Recovery Appellate Tribunal
55, Wellington Estate, IV Floor
Ethiraj Salai
Chennai 600 105.
2. The Registrar
Debts Recovery Tribunal - II
Deva Towers, IV Floor
770 A Anna Salai
Chennai 600 002.
+ 1 cc to Mr.V. Chandrasekaran, Advocate SR.81647
+ 1 cc to Mr.A.V. Arun, Advocate Sr.81403
Writ Petition No.24185 of 2017
MR(CO)
EU(18/12/2017 )

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https://hcservices.ecourts.gov.in/hcservices/

Mrs. Indrani Kailash, v. The Debts Recovery Appellate

Case brief

What is this about?

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Mrs. Indrani Kailash, v. The Debts Recovery Appellate

Case brief

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What did the court decide?

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