IMPORTANT POINT
Waiver of statutory deposit is permissible in a given situation.

Rajan Roy, J.—This writ petition has been filed challenging the order dated 01.07.2015 passed by the Debts Recovery Appellate Tribunal, Allahabad rejecting the application of the petitioners for waiver of the statutory deposit under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act, 2002).

2. Considering the issues involved, the facts need not be stated in detail. Suffice it to say that the petitioners were granted three different loans on 25.08.2010, namely cash limit for a sum of Rs.5.70 crores, term loan of one crore and bank guarantee for a sum of rupees three crores by respondent no. The petitioners did not repay the loan to the bank and all the three loan accounts of the petitioners were declared as non-performing assets (NPA) on 30.11.2011. The respondent-bank thereafter issued a demand notice under Section 13 (2) of the SARFAESI Act, 2002 on 05.06.2012 to the petitioners for a sum of Rs.5,88,34,840/- plus interest and expenses with effect from 01.11.2011 and since no amount was paid by the petitioners as per the demand notice the respondent-bank initiated recovery proceedings under Section 13 (4) of the SARFAESI Act, 2002. A notice under the said provision was issued to the petitioners on 22.11.2012.

3. The petitioners filed a securitisation application no. 7 of 2013 before the learned Debts Recovery Tribunal, Lucknow under Section 17 of the SARFAESI Act, 2002 challenging the possession notice dated 22.11.2012 issued by the respondent but the same was dismissed vide order dated 15.09.2014. During pendency of the proceedings under Section 17 auction of the secured assets was conducted on 26.03.2014 for recovery of the amount due from the petitioner. Since no bid came up, therefore, the bank exercising its powers under Section 13 (5A) and (5B) of the SARFAESI Act, 2002 confirmed the bid in its favour and 25% of the bid amount was deposited immediately by the purchaser i.e. respondent-bank and the remaining amount was deposited on 03.04.2014 and sale certificate was issued. Being aggrieved by the said order dated 15.09.2014 the petitioners filed appeal before the Debts Recovery Appellate Tribunal (hereinafter referred to as DRAT) which was numbered as Appeal SR No. 273 of 2014 under Section 18 of the SARFAESI Act, 2002 along with waiver application.

4. Initially the petitioners had filed an application for waiver of 50% of the statutory amount and permission to pay 25% under proviso to Section 18 of the SARFAESI Act, 2002. Subsequently another application was filed seeking complete waiver on the ground that consequent to the auction during pendency of the proceedings under Section 17 of the SARFAESI Act, 2002 an amount more than the amount due from the petitioners-appellants had already been realized. It is this application which has been dismissed by the DRAT vide order dated 01.07.2015 with the observation that complete waiver is impermissible. Accordingly it directed the petitioners-appellants to deposit 35% of the amount as per demand notice for a sum of Rs. 5,88,34,840.00.

5. The contention of the learned counsel for the petitioner is that once an amount more than the amount due from the petitioners-appellants has already been realized on the basis of the sale/auction of the secured assets then there is no question of any deposit under Section 18 of the SARFAESI Act, 2002 and insistence thereon by the DRAT apart from being illegal is also inequitable and unjust. The said deposit is to be made when the amount due remains unpaid and not when it has already been realized. In this regard he relied upon a judgment of this Court in the case of Gopal Ji Gupta Vs. DRAT, Allahabad & others, 2013(2) DRTC 773 (All.) and a judgment of Punjab and Haryana High Court in the case of S. R. Forging Ltd. & another V. UCO Bank & others., (2013) 1 DRTC 734 (P&H). He also relied upon a decision of the Supreme Court in Civil Appeal Nos. 20