The main legal point established is that the requirement of pre-deposit under the SARFAESI Act is mandatory only when the debt is due from the petitioner, and the pre-deposit cannot be insisted upon when the amount due has already been recovered by the bank through auction sale.

V. KAMESWAR RAO, J.

1. The present petition has been filed by the petitioner challenging the order dated October 18, 2018 passed by the learned Debt Recovery Appellate Tribunal, Delhi (in short DRAT) which rejected the M.A. No. 630/2016, filed by the petitioner for waiver of the pre-deposit of 50% of the amount which had been demanded from the appellant by respondent No. 1 Bank or as determined by the DRT, whichever is less.

2. The facts as noted from the record are that the petitioner was sanctioned credit facility of Rs. 8.20 crores, whereas the Bank had disbursed only Rs. 7,76,62,288/- for the construction of super structure on the land admeasuring 27 Kanals 9 Marlas, (which was also mortgaged with the Bank). The project could not be completed as per schedule for various reasons. The petitioner applied for enhancement in loan, which was not responded by the Bank. The total repayment of Rs. 2.45 crore was made as on March 31, 2015. It appears that a notice under Section 13(2) was issued on April 13, 2013 to which the petitioner had filed objections on June 06, 2013. The Bank had taken possession of the property. The petitioner approached the Bank after knowing that the property has been put to sale.

3. It is the case of the petitioner that the Bank had not published proper publication for sale of property. According to the petitioner, the same was in violation of Rule 8 of the SARFAESI Rules, as the respondent No. 1 Bank has failed to give prior 30 days notice to the petitioner before fixing sale. The Bank hurriedly sold the property to a third party (respondent No. 2, herein) at throw away price of Rs. 11.77 crores. The OTS proposal submitted by the petitioner was rejected. Suffice it to state that the petitioner filed an application under Section 17 of the SARFAESI Act challenging the sale of the property by the respondent No. 1 Bank. The said SA No. 120/2015 was dismissed by the DRT-I, Chandigarh on October 20, 2016, against the said order the petitioner had filed an appeal under Section 20 of the SARFAESI Act along with an application, M.A. 630/2016 for waiver of the condition of pre-deposit.

4. It is noted by the DRAT that the property in dispute already stands auctioned in favour of the respondent No. 2 for a sum of Rs. 11.77 crores whereas the amount shown in the auction notice to be recoverable from the petitioner was Rs. 6,84,28,157.56/-. The case of the petitioner before the DRAT for waiver of pre-deposit was that since the property in dispute has already been sold and the bank has recovered Rs. 11.77 crores from the respondent No. 2, the auction purchaser, there remains no requirement of pre-deposit at all and in fact the bank is liable to pay interest on the excess amount received and withheld by it. In other words, the auction money recovered by the bank is liable to be considered towards the compliance of the pre-deposit.

5. Reliance was placed on the judgment of this Court in W.P. (C) No. 13042/2009 decided on November 10, 2009 and two decisions of Punjab and Haryana High Court in CWP No. 9131/2012 and 10957/2012 decided on February 19, 2013. Some judgments of the Allahabad High Court were also relied upon by the learned counsel for the petitioner on the aspect of adjustment of sale proceeds of mortgaged property while calculating the amount of pre-deposit. There was one order by consent passed by the Supreme Court on February 25, 2011 in Civil Appeal No. 2074-2078/2011 which was also relied upon.

6. The respondent No. 1 i.e. bank and the auction purchaser have opposed the application for waiver of pre-deposit. The DRAT observed that the Tribunal has already taken a view, relying upon a judgment of the Supreme Court in the case of Indian Bank vs. Blue Jaggers Estates Ltd. 2010 (3) Banker's Journal 9 (SC), that auction money received by a bank from the successful auction purchaser of the mortgaged prope