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2012 Supreme(All) 2395
ALLAHABAD HIGH COURT
Dilip Gupta, J.
Deepak Mitra -Appellant
Versus
United Bank of India and Others -Respondent
C.M.W.P. No. 43885 of 2012
Decided On : 13-09-2012
Counsel for the Petitioner: Rahul Sahai.
Counsel for the Respondents: K.M. Asthana.
Headnote:
The petitioner, a Director of M/s. Mitra Prakashan Ltd., filed a petition to quash the orders dated 17th October, 2011 and 13th February, 2012 passed by the Debts Recovery Appellate Tribunal, Allahabad in the appeal filed by the petitioner under Section 20 of the Recovery of Debts Due to Banks & Financial Institutions Act, 1993 (hereinafter referred to as the 'Act'). The said appeal was filed by the petitioner to assail the order dated 24th July, 2009 passed by the Debts Recovery Tribunal, Allahabad in Original Application No. 109 of 2002 which had been filed by respondent No.1-United Bank of India (hereinafter referred to as the 'Bank') under Section 19 of the Act for payment of the outstanding amount of Rs.3,76,50,871.90/- with interest by the Company and the four Directors of the Company.
Fact of the Case:
The Debts Recovery Tribunal had allowed the Original Application filed by the Bank by the order dated 24th July, 2009 and issued the recovery certificate for an amount of Rs.3,76,50,871/- with pendente lite and future interest @ 19% per annum with quarterly rest from 30th January, 2011 till the realisation of the amount. The counter-claim filed by the petitioner who was impleaded as defendant No.4 in the Original Application for claiming Rs.35,66,17,673/- with interest was, however, dismissed by the Debts Recovery Tribunal by the said order dated 24th July, 2009. Feeling aggrieved by the said order passed by the Debts Recovery Tribunal, the petitioner preferred an appeal before the Debts Recovery Appellate Tribunal, Allahabad (hereinafter referred to as the 'Appellate Tribunal') under Section 20 of the Act and with the appeal an application was also filed by the petitioner under Section 21 of the Act for waiver of the amount required to be deposited as the said Section stipulates that such appeal shall not be entertained by the Appellate Tribunal unless the appellant has deposited 75% of the debt so due from him as determined by the Debts Recovery Tribunal under Section 19 of the Act.
Finding of the Court:
The Appellate Tribunal passed the order dated 17th October, 2011 on this application filed by the petitioner under Section 21 of the Act and directed the appellant to deposit 60% of the amount due to the appellant as determined by the Debts Recovery Tribunal under Section 19 of the Act within a period of thirty days. The petitioner-appellant submitted an application for recalling the order dated 17th October, 2011. The Appellate Tribunal considered this application and also examined whether the earlier order dated 17th October, 2011 passed by it for deposit of 60% of the amount due within thirty days had been complied with and by the order dated 13th February, 2012, dismissed the appeal filed by the petitioner as the order dated 17th October, 2011 had not been complied with and for other reasons mentioned hereinafter.
Issues: 1. Whether the proceeding is maintainable? 2. Whether the proceeding is barred by limitation? 3. Whether financial accommodation was made available to the company during 1998-1999 and defendant no.4 was a guarantor to the advance. 4. Whether FDR/RIP worth Rs.303.72 lacs was pledged by the company as security in 1994. 5. Whether FDRS/RIPS of the company and directors taken as security were adjusted validly in the loan account and when? 6. Whether other FDRS/RIPS of the company were validly adjusted in the loan account? 7. Whether any illegal and unauthorized debits were raised in the account? 8. Whether paper/raw materials amounting to Rs.3,76,207/- kept under lock and key of the bank and the sale proceeds have been misappropriated by the Bank? 9. Whether there is any connivance of the Branch Manager with the Directors? 10. Whether statement of account filed by the bank is correct? 11.To what relief the applicant is entitled?
Ratio Decidendi: The Appellate Tribunal committed no illegality in holding that two separate appeals were required to be filed against the orders passed in the Original Application filed under Section 19(1) of the Act and the counter-claim filed under Section 19(8) of the Act. If the appeal is treated to be an appeal filed against the order passed in the Original Application, then the provisions of Section 21 of the Act get attracted. The said Section provides that where an appeal is preferred by any person from whom the amount of debt is due to a bank, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal 75% of the amount of debt so due from him as determined by the Tribunal under Section 19 of the Act but the Appellate Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited.
Final Decision: The writ petition is, accordingly, dismissed.
This petition, at the instance of a Director of M/s. Mitra Prakashan Ltd., a Company that was incorporated under the Indian Companies Act, 1956 with its Head Office at Allahabad, has filed this petition for quashing the orders dated 17th October, 2011 and 13th February, 2012 passed by the Debts Recovery Appellate Tribunal, Allahabad in the appeal filed by the petitioner under Section 20 of the Recovery of Debts Due to Banks & Financial Institutions Act, 1993 (hereinafter referred to as the 'Act'). The said appeal was filed by the petitioner to assail the order dated 24th July, 2009 passed by the Debts Recovery Tribunal, Allahabad in Original Application No. 109 of 2002 which had been filed by respondent No.1-United Bank of India (hereinafter referred to as the 'Bank') under Section 19 of the Act for payment of the outstanding amount of Rs.3,76,50,871.90/- with interest by the Company and the four Directors of the Company.
2. The Debts Recovery Tribunal had allowed the Original Application filed by the Bank by the order dated 24th July, 2009 and issued the recovery certificate for an amount of Rs.3,76,50,871/- with pendente lite and future interest @ 19% per annum with quarterly rest from 30th January, 2011 till the realisation of the amount. The counter-claim filed by the petitioner who was impleaded as defendant No.4 in the Original Application for claiming Rs.35,66,17,673/- with interest was, however, dismissed by the Debts Recovery Tribunal by the said order dated 24th July, 2009.
3. Feeling aggrieved by the said order passed by the Debts Recovery Tribunal, the petitioner preferred an appeal before the Debts Recovery Appellate Tribunal, Allahabad (hereinafter referred to as the 'Appellate Tribunal') under Section 20 of the Act and with the appeal an application was also filed by the petitioner under Section 21 of the Act for waiver of the amount required to be deposited as the said Section stipulates that such appeal shall not be entertained by the Appellate Tribunal unless the appellant has deposited 75% of the debt so due from him as determined by the Debts Recovery Tribunal under Section 19 of the Act.
4. The Appellate Tribunal passed the order dated 17th October, 2011 on this application filed by the petitioner under Section 21 of the Act and directed the appellant to deposit 60% of the amount due to the appellant as determined by the Debts Recovery Tribunal under Section 19 of the Act within a period of thirty days from the date of the order.
5. The petitioner-appellant submitted an application for recalling the order dated 17th October, 2011. The Appellate Tribunal considered this application and also examined whether the earlier order dated 17th October, 2011 passed by it for deposit of 60% of the amount due within thirty days had been complied with and by the order dated 13th February, 2012, dismissed the appeal filed by the petitioner as the order dated 17th October, 2011 had not been complied with and for other reasons mentioned hereinafter.
6. The Original Application had been filed by the Bank under Section 19 of the Act against the Company and the four Directors including the petitioner who was arrayed as defendant No.4 in the Application for payment of Rs.3,76,50,871.90/- with interest with the allegation that the Bank had sanctioned credit facilities in favour of the Company against hypothatication of all the assets of the Company as well as the guarantees and the promissory notes executed by the Directors of the Company and on accounting an amount of Rs.3,76,50,981/- till 28th February, 2002 was found to be due from the defendants but despite demands it was not paid. Only defendant Nos. 1, 4 and 5 appeared through counsel, as is noticed in the order passed by the Debts Recovery Tribunal, but during the pendency of the Application, defendant Nos. 2 and 5 expired and though notice was issued on the substitution application, their heirs and legal representatives failed to appear. Defendant-Company w
