The central legal point established in the judgment is the power of the DRAT to pass conditional interim orders and the requirement of pre-deposit under the NPA Act.

S.J. Mukhopadhaya, J.

The Writ Petition has been preferred by Ind Bank Housing Limited (hereinafter referred to as the Bank) against the common interim order dated 27. 2008 passed by the Debts Recovery Appellate Tribunal (for short, the DRAT), Chennai in I.A.No.796 and 797 of 2008 in IN(SARFAESI).No.338 of 2008.

2. By the said common interim order dated 27. 2008, the DRAT while holding that the liability of the second respondent herein, namely M.Jayaram (one of the guarantors) is yet to be decided ultimately on merits, passed a conditional interim order of stay on deposition of Rs.50 lakhs in two equal instalments, each at Rs.25 lakhs, first one payable on or before 9. 2008 and the second one payable on or before 10. 2008 with further order that if the second respondent herein fails to comply with the above conditions, the proceedings in IN (SA).No.338 of 2008 stands disposed of without any further reference to the DRAT. On such deposit, the writ petitioner-Bank was directed by the DRAT to keep the said amount in an interest earning no-lien account, until further orders.

3. While the writ petitioner-Bank took plea that the DRAT cannot waive the amount below 25% of the claim amount, according to the second respondent-guarantor, the DRAT has jurisdiction to decide the prima-facie claim and can pass conditional order of interim stay.

4. From the pleadings/records, it appears that the second and third respondents (guarantors) are the owners of 68.25 cents of land(s) comprised in S.No.68/5 situated at No.10, Five Furlong Road, Guindy, Velacherry Village, Chennai-32. Originally, they approached fourth respondent-M/s. Shristi Estates and Investments Private Limited, by its Managing Director Mr. V. Subbaiah (builder) for joint development of the land(s) in question by promoting the same into residential flat(s) at the ratio of 60:40, i.e. 60% built-up area to be shared by the builder and the balance 40% built-up area to be the shared by the owners (i.e. guarantors). To that extent, a Memorandum of Understanding was reduced into writing on 112. 1993, pursuant to which the possession of the land(s) has also been handed over to the builder.

5. Fourth respondent-builder availed of the financial assistance from the writ petitioner-Bank by way of project loan. According to the writ petitioner-Bank, the account of fourth respondent-borrower having become a non-performing asset (for short, the NPA), the Bank issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (for short, the NPA Act), calling upon the second, third and fourth respondents (guarantors/borrower) to pay the due amount(s) as on 22. 2006, viz., Rs.15,72,47,661/-. Respondents 2, 3 and 4 (guarantors/borrower) having failed to pay the due amount(s), the Bank initiated action u/s 13(4) of the NPA Act, for taking the possession of the secured asset(s), on 20.7.2006 and showing the intention of sale, on 8. 2006.

6. Second respondent (one of the guarantors) filed Application (appeal) under Section 17 of the NPA Act before the Debts Recovery Tribunal (for short, the DRT)-I, Chennai, and by order dated 8. 2006, the DRT-I, in S.A.SR.No.1449 of 2006, passed ex-parte interim order, without any condition of payment.

7. In the meantime, 13 persons who have purchased the flat(s) from the builder (fourth respondent, also preferred application(s) (appeal(s)) u/s 17 of the NPA Act, before the DRT-I, Chennai.

.8. The application (appeal) preferred by second respondent herein and the application (s)(appeal(s) preferred by the above said 13 purchasers, were subsequently transferred to DRT-2, Chennai.

9. The appeal(s) preferred by 13 purchasers of the flat(s), was disposed of with a direction to them to deposit their respective amount(s) with the Bank, with their previous alleged payment being made to fourth respondent-builder (borrower). Accordingly, the writ petitioner-Bank recovered a sum of Rs.1