The main legal point established in the judgment is the interpretation of 'admission' in the context of the Recovery of Debts Due to Banks and Financial Institutions Act and Rules, and the relevance of balance sheet and profit and loss account as admissions, including the broader interpretation of 'admission' to include statements made in proceedings or documents.

( 1 ) RULE. Heard forthwith.

( 2 ) THE petitioner is aggrieved by the orders passed by the Presiding officer, Debts Recovery Tribunal, Pune dated 16-12-2003 and the order dated 22-3-2006 passed by the Debts Recovery Appellate Tribunal in appeal No. 22 of 2004. A few essential facts may be set out. The respondent No. 1 bank has filed original Application No. 97 of 2003 against the petitioner and respondent Nos. 2 and 3 as the guarantors for recovery of an amount of Rs. 2,91,63,589. 52 ps as on 3-6-2003. During the pendency of the O. A. , the respondent No. 1 preferred an application under Rule 2 sub-rule (5) of the Debts Recovery Tribunal (Procedure) rules, 1993 which hereinafter shall be referred to as the 'rules'. The application has to be read with section 19 (20) of the Recovery of Debts Due to Banks and financial Institutions Act, 1993, hereinafter to be referred to as the said Act. The respondent No. 1 by way of relief sought an order to direct the petitioner and respondent Nos. 2 and 3 to pay to respondent No. 1 an amount of rs. 1,64,79,715. 70 ps. , being the amount of debt admitted by the petitioners within one month from the date of the order. There is one more relief which need not be adverted to. Along with the application of 16th June, 2003 was annexed the auditors report as also copies of the Profit and Loss Account for the year ended on 31st March, 2000. The Profit and Loss Account was signed by respondent Nos. 2 and 3 on 1-9-2000.

( 3 ) THE petitioner herein filed their reply to the said application. The contention of the petitioner was that the application was misconceived and that the provisions under which the application was moved, would indicate that this power could be exercised after making proper application and not at the interim stage. By referring to Rule 12 (5) of the Rules, it was contended that the admission contemplated by Rule 12 (5) is required to be made in the proceedings after filing of the application. The respondent No. 1 had filed the purported application on the basis of the balance sheet. The figures in the balance sheet, it was submitted do not constitute an admission for the simple reason that the facts and figures are as per situation then existing which may not necessarily be the correct situation. If that was the correct situation, there was no need for adjudication of the claim. The petitioner was under compulsion to disclose the position as existing then, when the balance sheet was filed but that does not mean that it becomes an admission. The amount shown in the balance sheet becomes due only on admission before the Tribunal. The application, it was submitted, was devoid of merit and frivolous and accordingly ought to be dismissed.

( 4 ) THE learned Tribunal, on considering the provisions of the Rule as also the Act, was pleased to hold that the contention that the provision of the Act and the Rule relied upon would only be invoked at the final hearing, was not a proper construction. The learned Tribunal was further pleased to hold that the word 'admission' in Rule 12 (5) though not defined, could not be inferred to mean that the admission is required to be made during the proceedings. The various other contentions as raised were rejected. The petitioner, it was held, had not explained the admission as contended in the balance sheet, as being erroneous and in the absence of any explanation, the application should have to be allowed. Reliance was placed on the judgment of Uttam Singh Dugal and Co. Ltd. vs. Union Bank of India and others, (2000) 7 SCC 120.

( 5 ) THE petitioner aggrieved by the said order, preferred an appeal before the Appellate Tribunal. The learned Appellate Tribunal considered the meaning of the expression 'admission' and came to the conclusion that the admission need not be in the course of the proceedings and could have been made even before the institution of the proceedings. The balance sheet which was annexed to the notice issued by the compa