IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
PANKAJ BHATIA, J.
M/s. Sai Enterprises And Others - Petitioners
Versus
Debts Recovery Appellate And Another – Respondents
Writ C. No. 7439 of 2023
Decided On : 17-03-2023
Recovery of Debts and Bankruptcy Act, 1993 - Section 21 - Debts Recovery - Controversy - Whether appeal can be dismissed only on ground that same is without mandatory pre-deposit -Held, Counsel for respondent Bank argues that petitioner has not paid dues and is adopting dilatory tactic and when steps were taken to recover dues of Bank he made the application after depositing amount as stated - Submission coupled with issue raised in present writ petition pertains to interpretation of Section 21 of RDB Act, 1993 court am not inclined to keep matter pending as order impugned is set aside with directions to Appellate Tribunal to hear and decide appeal on merit in accordance with law with all expedition preferably within a period of four months from production of certified copy of this order - Writ petition is allowed.
ORDER :
(Pankaj Bhatia, J.)
1. The present petition has been filed by the petitioner challenging the order dated 03.01.2023 whereby the restoration application filed by the petitioner has been rejected on the ground of limitation.
2. The facts in brief are that the proceedings were initiated by the respondent Bank against the petitioner before the Debts Recovery Tribunal, Patna which was decided against the petitioner. Against the order of DRT, Patna, the petitioner preferred an Appeal before the Debts Recovery Appellate Tribunal, Allahabad, however, the petitioner had not made any deposit along with the appeal as is required under Section 21 of The Recovery of Debts and Bankruptcy Act, 1993.
3. From the documents as on record, it appears that the petitioner was granted time to make the deposit, however, he has not deposited which led to the dismissal of the appeal. Subsequently, when the petitioner arranged the funds, he moved an application for deposit of an amount of Rs.20,00,000/-and sought recall of the order dated 21.01.2020 whereby the appeal was dismissed for want of pre-deposit and prayed that the said order be recalled and decided on merit. The said recall application has been dismissed by means of the impugned order dated 03.01.2023 mainly on the ground that the restoration application has been filed after expiry of two and a half years and the same is highly belated.
4. The contention of the Counsel for the petitioner Shri Sanjay Kumar Gupta, is that under the Act in question, there is a provision of filing of an appeal as contained under Section 21 of the RDB Act. 1993. He argues that condition specified in Section 21 is only for entertaining the Appeal and the provisions of said does not provide any power to the DRAT to direct the pre-deposit and in any case, even if, no deposit is made, as specified in Section 21, the appeal cannot be dismissed. The only effect of Section 21 of the RDB Act, 1993 is that the appeal would not be entertained unless the deposit as required is made. Before discussing the said controversy, it is necessary to reproduce the said Section 21 of the RDB Act, which is as under:
"21. Deposit of amount of debt due, on filing appeal. Where an appeal is preferred by any person from whom the amount of debt is due to a bank or a financial institution or a consortium of banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal fifty per cent. of the amount of debt so due from him as determined by the Tribunal under section 19:
Provided that the Appellate Tribunal may, for reasons to be recorded in writing, reduce the amount to be deposited by such amount which shall not be less than twenty-five per cent. of the amount of such debt so due to be deposited under this section."
5. On a plain reading of Section 21, it is clear that it provides for a statutory appeal, with a rider that the appeal can not be entertained, if the deposit, as specified, subject to the exercise of powers under the proviso, is not made.
6. The phrase "shall not be entertained", came up for consideration in various judgments of Supreme Court as the said expression is used in many statutes. The Supreme Court in the Judgment of Ananthesh Bhakta vs. Nayana S Bhakta (2017) 5 SCC 185 considered the meaning of the said expression and laid as under.
“20. There is one another aspect of the matter which is sufficient to uphold the order of the District Judge. Section 8(2) uses the phrase “shall not be entertained”. Thus, what is prohibited is the entertainment of the application unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
21. The word “entertained” has specific meaning in P. Ramanatha Aiyar's Advanced Law Lexicon. The word “entertained” has been defined as:
“Entertain.—(1) To bear in mind or consider; esp., to give judicial consideration to (the court then entertained motions for continu
Ananthesh Bhakta vs. Nayana S Bhakta (2017) 5 SCC 185
Kundan Lal v. Jagan Nath Sharma
Dhoom Chand Jain v. Chaman Lal Gupta
Haji Rahim Bux and Sons v. Firm Samiullah and Sons
SupremeToday
The court ruled that appeals against procedural orders should not be subjected to deposit requirements under section 21 of the RDB Act, preserving natural justice.
Appeal – Any waiver of pre-deposit to entire extent would be against statutory provisions and not sustainable in law.
A writ petition under Article 226 is not maintainable when an effective statutory remedy exists under the Securitisation Act, especially in recovery related matters.
The requirement to pre-deposit up to 50% of the debt due to prefer an appeal under Section 18 of the Act, 2002 against any order passed by the Tribunal under Section 17 is mandatory and applicable to....
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