IMPORTANT POINT
The interpretation of 'debt due' under Section 18(1) of the SARFAESI Act, 2002 includes the liability inclusive of interest amount as claimed by the bank, and the tribunal has the discretion to relax the pre-deposit requirement.

JUDGMENT

Manmohan, A.C.J. (Oral)

CM APPL. 17825/2024 (for exemption)

Allowed, subject to all just exceptions.

Accordingly, the present application stands disposed of.

W.P.(C) 4344/2024 & CM APPL. 17824/2024

1. The present writ petition has been filed under Article 226 of the Constitution of India impugning the order dated 29th February, 2024 (`impugned order') passed by the Debts Recovery Appellate Tribunal, New Delhi (`DRAT') in I.A. No. 139/2024 in Misc. Appeal No. 49/2024 titled as Golden Netsoft Pvt. Ltd. Vs. HDFC Bank Ltd. & Ors. to the extent of the directions for deposit of a sum of Rs. 6 Crores as pre-deposit under Section 18(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (`SARFAESI Act' or `Act of 2002').

2. Learned senior counsel for the Petitioner states that the DRAT on incorrect interpretation of second proviso of Section 18 of the Act of 2002 has erroneously considered Rs. 14.06 Crores as the basis for calculating the pre-deposit amount. He states that in fact the relevant amount for consideration should have been Rs. 6.26 Crores in terms of the notice dated 11th December, 2015 issued under Section 13(2) of the Act of 2002.

2.1. He states that since on the date of filing of SA No. 183/2023, the measures taken by Respondent No. 1 Bank under Sections 13(2) and 13(4) of the Act of 2002 were challenged, the amount of Rs. 6.26 Crores mentioned as `debt due' in the notice dated 11th December, 2015 alone could have been considered.

2.2. He states that though the auction notice dated 16th January, 2024 stood issued after the dismissal of the interim stay by DRT-II, however, the auction was yet to be conducted as on the date of passing of the impugned order.

2.3. He states that DRAT failed to take into consideration the amount of Rs. 2.45 Crores, which already stands deposited with the Respondent No. 1 Bank after the issuance of the notice under Section 13(2) of the Act of 2002. He states that the Petitioner is entitled to seek adjustment of the said amount towards the pre-deposit.

2.4. He states that the DRAT failed to exercise its discretion of reducing the pre-deposit from 50% to 25% despite taking note of the precarious financial condition of the Petitioner. He states that the Petitioner is left with no source of income after the physical possession of the mortgage property has been taken over by the Respondent No. 1-Bank. He states that no reasons have been recorded by DRAT for not exercising its discretion for relaxing the mandatory requirement of pre-deposit of 50% to 25%.

3. In reply, learned senior counsel for the Respondent No. 1 Bank, who appears on advance notice, states that in the sale notice dated 19th May, 2023, the Respondent No. 1-Bank has raised a demand of Rs. 14,06,26,413/- Crores on the Petitioner. He states that this was the amount due and payable as on 21st October, 2022 and the said demand was raised after duly adjusting the amounts which stood recovered from the Petitioner. He states that therefore, the plea of adjustment of an amount of Rs. 2.45 crores towards pre-deposit is without any merit.

3.1. He states that the Petitioner cannot refer or rely on the amount of Rs. 6.26 Crores raised in the earlier notice dated 11th December, 2015, as the Petitioner is liable to secure the liability inclusive of interest amount at this stage of the proceedings. He states that therefore, determination of liability has to be as per the `debt due' as on date. In this regard, he relies upon the judgment of the Supreme Court of India in Sidha Neelkanth Paper Industries Private Limited vs. Prudent ARC Limited, (2023) SCC OnLine SC 12 (Paras 34 to 39).

3.2. He states that as per the impugned order dated 29th February, 2024, the first instalment of Rs. 2 Crores is due and payable today i.e., 21st March, 2024 and therefore, filing of this petition on the eve of the due date is not bona fide. He states that the Petitioner waited out the entire period of three weeks gr