The main legal point established in the judgment is that the requirement of pre-deposit under Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 is mandatory and there is no discretion to waive the pre-deposit.

JUDGMENT :

S. MURALIDHAR, J.

1. The Petitioner, Hassad Food Company Q.S.C., which describes itself as being part of the Sovereign Wealth Fund of the State of Qatar (the Qatar Investment Authority, QIA) has filed this writ petition challenging an order dated 7th August, 2019 passed by the Debts Recovery Appellate Tribunal (Delhi) ["DRAT"] declining the prayer made by it in IA No.764 of 2019 in Appeal No.333 of 2019 for waiver of the requirement of pre-deposit under Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 ("RDB Act").

2. The brief facts are that on 28th March, 2013 the Petitioner, through its subsidiary i.e. Hassad Netherlands B.V. acquired 69.5% shareholding in Bush Foods Overseas Pvt. Ltd. ("Bush Foods") Respondent No.2, whose promoter was Mr. Virkaran Awasty (Respondent No.3). It is stated that as part of the transaction, the Petitioner furnished a corporate guarantee in favour of a consortium of nine banks to the extent of 70% of the credit limit extended by the said banks to Bush Foods. It is stated that Bush Foods is currently under winding up and that a Provisional Liquidator has been appointed by this Court in Company Petition 267 of 2014. The consortium banks invoked the corporate guarantee furnished by the Petitioner which it duly honoured by making a total payment of Rs.442.64 crores and US Dollars 8.142 million to the consortium banks.

3. The case of the Petitioner is that the consortium banks were complicit in the fraud played by Bush Foods and had fraudulently procured the aforementioned corporate guaranteed from the Petitioner, knowing fully well the precarious financial conditions of Bush Foods. The Petitioner filed CS (OS) (COMM) No. 9 of 2018 in this Court seeking inter alia refund of the sums paid by it to the consortium bank members. An interim order dated 14th September 2018 was passed in the said suit, where inter alia it was observed that "within 8-9 months of taking over Bush Foods, the Plaintiffs have lost Rs. 442 plus about Rs.800 crores of investment in a dead company i.e. about Rs.1242 crores. Prima facie it appears that that the Plaintiffs have been cheated". The said order also noted that the payment of the amounts constituting 70% of the credit facilities advanced by the consortium banks to Bush Foods was not considered by the consortium bank to be a sufficient discharge of the amounts owed to them and that they had instituted proceedings before the Debt Recovery Tribunal ("DRT") for recovery of Rs.282 crores. The said interim order restrained the consortium banks from using any coercive methods against the Petitioner for recovery of the alleged dues. It further observed that in case the DRT were to pass a recovery certificate against the present Petitioner, the banks would be free to approach the Court seeking appropriate orders for the protection of their interest.

4. The Petitioner states that one of the consortium banks i.e. Kotak Mahindra Bank preferred an appeal against the above interim order in FAO (OS) (COMM) 283 of 2018 in this Court, which is pending.

5. A separate OA No.347 of 2014 was filed in the DRT by ING Vysya Bank which had advanced a sum of Rs.50 crores to Bush Foods. Respondent No.1 herein is an assignee of the debt owed to ING Vysya Bank. The Petitioner points out that the above loan exposure is not covered by the corporate guarantee furnished by the Petitioner to the consortium banks since ING Vysya Bank was, at that point in time, not part of the consortium. Subsequently, it did become a member of the consortium by taking over a Rs.60 crores loan obligation of two existing consortium bank members viz., EXIM Bank and Development Bank of Singapore ("DBS"). In the DRT proceedings, ING Vysya Bank sought from the Petitioner the entirety of its Rs.50 crores loan and the Rs.60 crores loan extended by EXIM Bank and DBS Bank. It was the case of the Petitioner that it could not be held liable for the sums that were not guaranteed by it. As far as the loans of EXIM Bank a