Allowed

M/s. Progressive Aquatech Enterprises v. The Debts Recovery Tribunal-Ii and 2 others

Telangana HC23 Dec 2021WP/30437/2021

Case brief

AI extract

What is this about?

The High Court set aside the DRT order refusing a refund of Rs 1 lakh court fee. The Court held that although statutory refund provisions apply only to original applications under the RDB Act, the Tribunal must refund fees for infructuous SARFAESI applications where no settlement occurred but processing expenses are deductible.

What did the court decide?

The docket order dated 12.10.2012 passed by the Tribunal was set aside and the petitioner was directed to be refund the court fee paid within four weeks after deducting processing costs.

M/s. Progressive Aquatech Enterprises Vs The Debts… — Banking and Recovery | Telangana HC (2021)

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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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(Special Original Jurisdiction)

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THURSDAY, THE TWENTY THIRD DAY^{OF DECEMBER} TWO THOUSAND AND TWENTY ONE

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PRESENT

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THE HONO URABLE SRI JUSTICE UJJAL^BHUYAN AND THE HONOURABLE SMT^{JUSTICE P.MADHAVIDEVI}

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WRIT PETITI o N NO: 30437^{OF 2021}

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Between:

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M/s. Progressive Aqubtech^{Enterprises, Registered office, 1-4-190/35P, Bhaskar} Rao Na-oar Colonv. Pnase-ll,^{'sainikpuriSecunderabad,rep by its sole} b'I"-"rioji73ri n]. ribrasimna Rao S/o Late Sri^{R.L. Kanta Rao, Aged about47} ,"iit. - O""rprtio n. dusiness, FJo D. No 1-4-190/35P' Bhaskar Rao Nagar bolony, Phase-ll, Sai/likpuri,^{Secunderabad.}

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.,'PETITIONER

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AND

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The Debts Recovery^{-iribunal-ll, at Triveni Complex, Hyderabad'}

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M/s. lndian Bank, SAM^{V Branch, Hyderabad. Earlierthe loanaccount is with} - M/;. t.Oian eink, Plot No.127, Tinriayee Apartments, Srinagar Colony' HFet i;;4, R;p.'uy^{itp Assistant Gen6ral Mbnager/Branch Manager}

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M/s. lndian Bank,^{SAMV Branch,HyderabadEarlierthe loanaccount is with}

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Mli. inoirn aank, Plot No.t 27,lAniayee Apartments, Srinagar ColonY,-,-ttyO_ufg[q0.,^{Rep. by itp Authorized Officer/ Assistant General Manager unoer} SARFAESI ACt.

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(Respondents-2 and 3^{arle proformaand not necessaryparties)}

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...RESPoNDENTS

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petition under Articl[ 220 ol the Constitution of lndia^{prayingthat in the} circumstances stated^{in thel affidavitfiled therewith, the High Court may be pleased} to issue a writ,^{order or} [rders^{more particularly one in the natureof writ of} Ir4andamus, declaring^the lDocket^{order dated 12t1012021'passedby the 1st} Respondent, refusing^{to re{und the Courtfee of Rs ,1,00,000/- (Rupees One Lakh} only) paid by the^{petitioner]in setn No.356/2021 on its file as arbilraryand illegal,} violates the Sec. 19^{(3 B) otlnOOaand Fl Act,1993, Article14 of the Constitution of} lndia and contravenes^{tne rfw laid down2021 (2)ALT100 (SC)'}

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lA NO:¹ oF 2021

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Petition under^Sectlof 151 CPC^{praying that in the circumstancesstated in} f the^{petition, the High Court may be pleased to direct} the affidavit filed^{in sunnort} I d the Court^{Fee of Rs.1,00,000/-(Rupees OneLakh} the 1st Respondent^{to refuf}

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Only) paid by the Petitioner in SAIR No.356/2021 on its file, by suspending the impugned Docket order dated 1211012021, passed by the 1st Respondent, pending disposal of the Writ Petition.

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Counsel for the Petitioner(s):SRl. N GANGADHAR

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Counsel for the Respondent No. 1: --

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Counsel for the Respondent Nos. 2 & 3: SRI RAVINUTALA VENKATA SUBBA RAO

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The Court made the following: ORDER

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HONO

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LE SRIJUSTICE UJJAI BHUYAN AND

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HONOU LE SMTJUSTICE P. MA,DHAVI DEVI

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W.P.No.30437 of 2021

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ORDER: ar,,,rr,, -f ri Juttitu Ujjal Bhtyar)

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Heard Mr. .Gangadhar, leamed counsel for the petitioner, and I&. Ravinutala V ta Subba Rao, learned counsel for respondents No.2 and 3.

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By filing thi petition r,rnder Aticle 226 of the C-onstitr"rtion ol India, petitioner s el<s quashing of docket order dated 12.rc.2A21, passed by the Deb Recovery Tnbunal-Il, Hyderabad (for shon 'the Tribunal) in S.AI No.356 of 2021. and funher seeks a direction to the Tribunal for fund of coun fee of Rs.1 lakh paid by the Petl[oner.

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Be it stated, at against the sale notice dated 12.03.2021, issued by respondents and 3 i.e., Indian Bank for auction sale of the secr-rred asset on 16.04.2021, petitioner No.1 filed Securitisation Application before he Tribunal under Section 17 ol the Sccuritisation and Reconstruction of Financial fusets and Enforcement of Security Interest Act, 2002 (for shon the SARFAESI Act), which was nun-rbered as S.A.I. No.355 of 2a21.. Along with the Securitisation Application, petitio r paid coun fee of Rs.t lakh.

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As the auctio sale of the secured asset did not materialize on 16.04.202L for want of bidders, petitioner withdrew the Securitisation Application from Tribunal. Thereafter, petitioner filed an

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T-*

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application seeking refund^{of the coun fee paid' Bythe docket order} dated t2.10.2021, Tribunal^{rejected the said application.Aggrieved,} present \flrit Petition^{has beenfiled.}

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On29.17,2021, we^{had issued notice to respondents No.2 and 3} with the observation that on the retumable^{date an endeavourwould} be made to dispose of^the \flrit^Petition.

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Leamed counsel for the^{parties have made detailed submissions,} which we have duly considered.^{We have also perused the materials} on record.

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At the ouret, we may adven to the^docketorder

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dated 12.10.202L, relevant ponion^{of which is exractedhereunder:}

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"On 17 -04-2021, a Securitisation Application (SA) vide^SAIR No.356/2021 was filed before the^{DRT-2,Hiderabad,by} Ivls. Progressive Aquatech^{Enterprises against M/s.IndianBank6c} Another and a C-oun Fee of Rs.X.,OO,OO0/-^{was also paid.The relief} sought in the said SA b^{"to set aside rheSale Notie dated 12'0)-2021'} P,ltting^{the rmndasset} for^{anctionon 16.04,2021'conseq*nt! to vtaside tbe} Posvssion Notice dated l6-1 1-2019 idtding^{tbe NoticeU} /^{tl3(2)oftbe Act."}

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However, for rexons best known to the^{Applicant, evenbeforethe} said case was numbered for^want of^{compliance of observations the} C.ounsel for Applicant did not opt to Pursue^{the case'Subsequently,} by filing a Petition under^{Rule 4} of^{DRT (Refundof C-oun Fee) Rules,} 2Oll, R/w. Sec.22(2)^(h) of RDB Act,^{1993he hrs soughtfor relund} ol C-ourt Fees in the sai.l ctrse.

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It is wonhwhile to mention here the^{relevant provisionsgovemlng} refund of Coun Fees -

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a) Sec.19 [(3B)] of the RDB Act,^{1993which stipulatesthat} If ary apphdrion Jiled beJbn th^-l'ibma/ Jitr ntouery oJ anl d t^i.r vuled pior to tbe c,ommentemenl oJ tbe hearing b(brc tlte l'ibana/ or at an1 stage oJthe pronedings befon theJinal order it pased, lhe applitant

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t dl he grsnl nfrnd of tLte.fru f,aid hy^{hint 4/} -tt/d)^{ra/$a.; ntay he}

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lruribedl^an

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b) The Debt Recovery^{Tribunals (Refund of C-ounFee)} Rules, 20 1l fn respect of^{Original Applicadons.}

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Flence, on^going tfrough^{the above meniionedSec.19[(3B)] of the} RDB Act, 1993 rhe Rules^{mentionedin the DRT (Refundof} C-oun Fee) Rules,^{213, it is veryclear that,it is only in thecase of OA} filed for Recovery f Debts, the^{questionof rerumof C-oun Fee arises'} Bv vimre of a Section/Rules, it is clear^{that,Securitization} d under Sec.17 of^{SARFAESIActwill not come} Application^(SA) under its purview. f ven otherwise, there^{is no specificSection/Rule in} rhe SARFAESI^Acrf Rules duly^{permifting relum of C-oun Fee in Sfu'}

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ln view o[ the abofe' I^{when the provisions of The RDB/SARFAE-SI} Acts tlo not pemrit^{refundof Clun Fee, we maydisnriss the petition} filed for refund^of un Fees."

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'Debts Recove Tnbunal' as^{referred to above would mean the} Tribunal established nder sub-section^{(1) of Section(3) of the} to Bank^{and FinanciaiInstitutions Act, L993,} Recovery of^Debtsd which has since^be dⁿ rechristened as^{Recoveryof Debtsand} Bankruptcy^{Act, 1993} riefly'the^{1993 Lct' hereinafter).} 9. Under^Section 7 of the^{Securitisation and Reconstructionof} Financial fusets^and nforcement of^{SecuriryInterestAcq 2002 (for} shon^{'the SARFAEIAct), an aggrieved Person may file an} application^{before the} iurisdictional^{DebrsRecoveryTribunalagainst} n by the secured^{creditorunder Sectioni3(4)} any of the^measuresta thereof.

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fu per^{sub-sectin (7) of Section17 of the SARFAESIAct,, the} Debts Recovery^{Tribual shall dispose of the applicationfiledunder}

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l-'--

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sub-section (1) of Section 17, as far as may be, in accordance with the provisions of the 1993 Act.

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11' Section 37 of the SARFAESI Act crarifies that provisions of the SARFAESI Act would be in addition ro, and not in derogation of, amongsr othen the 1993 Act.

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12' In so far the 1993 Act is concemed, section 19 deals with filing of application by a bank or by a financial institution to the Debts Recovery Tribunal, for recovery of debt. Sub,section (3B) thereof sap that if any application filed before the Tribunal lbr recovery of any debt, is settled prior to commencement of the hearing or at any stage of the proceedings before the final order is passed, the applicant may be granted refund of the fees paid by him at such rates as may be prescribed' In this connection, the Debts RecoveryTribunals (Refund of Cour"t Fee) Rules, 2013,have been fiamed.

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Advening to the facts of the presenr case, whar is discemible is that' petitioner had filed a securitisation Application against the sale notice dated 12.03.2021 issr.red by respondents No.2 and 3 proposing to auction sale the secured asset. The auction sale scheduled on 16.04.2A21, however, did not materialise. As a result, the very grievance of the petitioner did nor survive. Therefbre, rhere was no reason fbr the petitioner ro pursue the Securitisation Application. However, poinring out cenain defects in the application, the same was retumed by the Tribunal. Thereafter, peritioner filed an application

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under Rule 4 of the {ebts^{RecorreryTribunals(Refundof CourtFee)} Rules, 2013^{(for short} the Rules)

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1,4. Rule 4 of^{the Rrfles deals q,'ith amountof refund and the sameis} reproduced^{as unden}

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"Amount^{of refu} .- The Presiding^{Officer of the Tribunal before} iled for senlement^{of thedues of the Banl<s and} which any^caseis Financial Institutio may order^{refundof feeremimedat the time of} f iling the^{case at} following ntes:"

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On going^t gh the above^{Rule, we find that the said} applicable^{to the fact situation of this case} provrslon^{would not} inasmuch^{as therewasno serrlemenrin this case. \Y,4rat had happened} tion sale^{did not materialise,} Petitioner^{did not} was lhat because^{the a} pursue rhe^{Securitisaton Appiication, *4richwas,however'returned} ior r.ron-^{rectificationf cenaindefects. Question of rectifyingthe} defeos did^{not ariseas the Securitisation Application had become} infructuots.

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In our^vrew, ough there^{is no specilic provision in the} fund of court^{fee, nonethelessfrom a ioint} SARFAESI^{Act for} and Section^{37 of the SARFAESIAct' a view} reading of^Section17( can be^{taken thatre} vant provisions^{of the t993 Lct would be} g before^{the Tribunal under the SARFAESI} applicable^{to a} Procee Act rvr-j-rz.r^{refundofourtfee.}

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itioner did^not Pursue^{the Securitisation} t7.^{Vhen the} Pe was no^{proceedingof the Tribunal on the said} "Application^{and there} not be iwt^and ProPer^{for the Tribunalto} application,^{it would}

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r-.-

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withhold the coun fee paid by the petitioner. Of course, the amount that was expended in processing the Securitisation Application before the Tribtural may have to be deduaed from the total amount of coun fee deposited by the petitioner. But, withholding the entire amount of court fee, so deposited bythe petitioner, would not be just and fair. 18. In the circumstances, we set aside the docket order dated 12.10.2021 passed by the Tribunal in S.AI.RNo.356 of 2a2t and direct the Tribunal to refund the court fee paid by the petitioner, after making necessary deduction in accordance with law. This shall be done wirhin a period of four weels from the date of receipt of a copy of this order.

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\7rit Petition is disposed of accordingly. Related interim application is also disposed of.

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No costs.

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..\

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//TRUE COPY//

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sor- r,r. cxaruo_Ra sr*,ronilo /

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ASSTSTANT REotsrnan / /.\ t .ll )

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SECTION OFFICER

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One fair copy to THE H - rroi ni, loola?it P"-,1,*'rt'J:,:|lj.,er- anuvar.r

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To,

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NPJ

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One fair copy - to THE HO r^i"rr' r^r,., ; ;'.t,?!i, i t J!?f,!i,M A D H evr o e vr 1 2 3 4 o. ffiffi.jtrffinilfffll}ffi The Secretary, Telangana Ad\ 7. .l?9ryI!a^{at Hyderabad.} rocates Association Library, High court for the State of Ad voca te ro p U Cl 10. #':l#ffi i;'"'Lof#A, " iffi "$o{:tt;,f

HIGH COURT

DATED:2311212021

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ORDER

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WP.No.30437^{of 2021}