SHORT NOTE
CALCUTTA HIGH COURT
Sanjib Banerjee, J.
Sutapa Chatterjee & Anr. —Petitioners
versus
UCO Bank & Ors. —Respondents
C.O. No. 4051 of 2012
Decided on 12.3.2013

IMPORTANT POINT
Requirement of pre-deposit can be waived.

Headnote:(i) Recovery of Debts due to Banks and Financial Institutions Act, 1993—Section 21—Appeal—Requirement of pre-deposit—Waiver—Section 21 is restricted to a stage after passing of final order and a final order may be restricted to a part of claim and need not necessarily conclude lis, passed by a Debts Recovery Tribunal and requirement of pre-deposit is only for a would-be appellant from whom ascertained sum is adjudged to be due to bank or financial institution or consortium of banks or financial institutions—Section 21, by its very nature, cannot apply to appeals from orders made prior to adjudging would be appellant to be a debtor to a bank or a financial institution or a consortium of banks or financial institutions.

       Held: The key words of Section 21 of the Act are “debt is due”. A debt, even within the meaning of Section 2(g) of the said Act, may be said to be due only if it is adjudged to be due. The expression “debt is due” in Section 21 of the Act necessarily implies the quantum of money found to be due upon adjudication of the claim by a Debts Recovery Tribunal. The adjudication of a claim, ordinarily, happens only upon the conclusion of the proceedings launched under Section 19 of the Act. In some cases a part of the claim maybe adjudicated upon while the adjudication of the balance claim is postponed. It is evident, therefore, that Section 21 of the Act is restricted to a stage after the passing of the final order (and a final order may be restricted to a part of the claim and need not necessarily conclude the lis) passed by a Debts Recovery Tribunal and the requirement of a pre-deposit is only for a would-be appellant from whom an ascertained sum is adjudged to be due to a bank or a financial institution or a consortium of banks or financial institutions. Section 21 of the Act, by its very nature, cannot apply to appeals from orders made prior to adjudging the wouldbe appellant to be a debtor to a bank or a financial institution or a consortium of banks or financial institutions. Indeed, the quantum of pre-deposit as recognised in Section 21 of the Act is a percentage of “the amount of debt so due from him as determined by the Tribunal under section 19” as the closing words of the body of the section indicates. The operative words of the section may, for the present purpose, be read thus:

        “Where an appeal is preferred by any person from whom the amount of debt is due … such appeal shall not be entertained … unless such person has deposited … seventy-five percent of the amount of debt so due from him as determined by the Tribunal under section 19:”

       (ii) Recovery of Debts due to Banks and Financial Institutions Act, 1993—Section 21—Appeal—Requirement of pre-deposit—Waiver—Appeal sought to be preferred by petitioners was against an order of relevant Debts Recovery Tribunal disallowing petitioners’ plea for cross-examining bank’s witness—As at the time of preferring appeal, no amount of debt was adjudged to be due from petitioners or either of them to bank under Section 19 of the Act—In neither petitioner being a person from whom any amount of debt was determined by relevant Debts Recovery Tribunal to be due under Section 19 of the Act, Appellate Tribunal could not have imposed onerous condition of appellants or either of them being required to make pre-deposit for proposed appeal to be entertained—Orders passed by Appellate Tribunal set aside and proposed appeal restored to file of Appellate Tribunal.

       Held: In the present case, the appeal sought to be preferred by the petitioners was against an order of the relevant Debts Recovery Tribunal disallowing the petitioners’ plea for cross-examining the bank’s witness. As at the time of preferring the appeal, no amount of debt was adjudged to be due from the petitioners or either of them to the bank under Section 19 of the Act. In neither petitioner being a person from whom any amount of debt was determined by the relevant Debts Recovery Tribunal to be due under Section 19 of the Act, the appellate tribunal could not have imposed the onerous condition of the appellants or either of them being required to make a pre-deposit for the proposed appeal to be entertained.

       The orders dated September 7, 2012 and October 16, 2012 passed by the appellate tribunal are set aside and the proposed appeal restored to the file of appellate tribunal for the appellate tribunal to consider the same in accordance with law. The application made by the petitioners herein for waiver of the predeposit for the purpose of the proposed appeal to be entertained was misconceived and is not required to be considered.

       Result: C. O. allowed.