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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
UJJAL BHUYAN, P. MADHAVI DEVI, JJ.
M/s. Progressive Aquatech Enterprises – Petitioner
Versus
The Debts Recovery Tribunal, Hyderabad and Others – Respondents
W.P. No. 30437 of 2021
Decided On : 23-12-2021
Constitution of India,1950 - Article 226 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 17, 37 and sub-section (7) of Section 17 - Recovery of Debts due to Banks and Financial Institutions Act, 1993 - Sections 22(2) (h), sub-section (1) of Section (3) and 19 [(3B)] - Seeks quashing of docket order - Indian Bank for auction sale of the secured asset Petitioner No. 1 filed Securitisation Application before the Tribunal under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, Securitisation Application, petitioner paid court fee of Rs. 1 lakh - Auction sale of the secured asset did not materialize on 16.04.2021 for want of bidders, petitioner withdrew the Securitisation Application from Tribunal - notice to respondents No. 2 and 3 with the observation that on the returnable date an endeavour would be made to dispose of the Writ Petition - Held, Amount of refund - The Presiding Officer of the Tribunal before which any case is filed for settlement of the dues of the Banks and Financial Institutions may order refund of fee remitted at time of filing the case – Court find provision would not be applicable to the fact situation of this case inasmuch as there was no settlement in this case - What had happened was that because the auction sale did not materialise, petitioner did not pursue the Securitisation Application, which was, however, returned for non-rectification of certain defects. Question of rectifying the defects did not arise as the Securitisation Application had become infructuous - nonetheless from a joint reading of Section 17(7) and Section 37 of SARFAESI Act, a view can be taken that relevant provisions of the 1993 Act would be applicable to a proceeding before Tribunal under the SARFAESI Act vis-a-vis refund of court fee - petitioner did not pursue Securitisation Application and there was no proceeding of Tribunal on the said application, it would not be just and proper for the Tribunal to withhold the court fee paid by petitioner. Of course, the amount that was expended in processing the Securitisation Application before the Tribunal may have to be deducted from the total amount of court fee deposited by the petitioner – Court docket order Tribunal in S.A.I.R. No. 356 of 2021 and direct the Tribunal to refund the court fee paid by the petitioner - Writ Petition is disposed of accordingly
ORDER :
1. Heard Mr. N. Gangadhar, learned counsel for the petitioner and Mr. Ravinutala Venkata Subba Rao, learned counsel for respondents No. 2 and 3.
2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of docket order dated 12.10.2021, passed by the Debts Recovery Tribunal-II, Hyderabad (for short ‘the Tribunal’) in S.A.I.R. No. 356 of 2021 and further seeks a direction to the Tribunal for refund of court fee of Rs. 1 lakh paid by the petitioner.
3. Be it stated, that against the sale notice dated 12.03.2021, issued by respondents No. 2 and 3 i.e. Indian Bank for auction sale of the secured asset on 16.04.2021, petitioner No. 1 filed Securitisation Application before the Tribunal under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) which was numbered as S.A.I.R. No. 356 of 2021. Along with the Securitisation Application, petitioner paid court fee of Rs. 1 lakh.
4. As the auction sale of the secured asset did not materialize on 16.04.2021 for want of bidders, petitioner withdrew the Securitisation Application from the Tribunal. Thereafter, petitioner filed an application seeking refund of the court fee paid. By the docket order dated 12.10.2021, Tribunal rejected the said application. Aggrieved, present Writ Petition has been filed.
5. On 29.11.2021, we had issued notice to respondents No. 2 and 3 with the observation that on the returnable date an endeavour would be made to dispose of the Writ Petition.
6. Learned counsel for the parties have made detailed submissions, which we have duly considered. We have also perused the materials on record.
7. At the outset, we may advert to the docket order dated 12.10.2021, relevant portion of which is extracted hereunder:
However, for reasons best known to the Applicant, even before the said case was numbered for want of compliance of observations the Counsel for Applicant did not opt to pursue the case. Subsequently, by filing a Petition under Rule 4 of DRT (Refund of Court Fee) Rules, 2013, R/w. Section 22(2) (h) of RDB Act, 1993 he has sought for refund of Court Fees in the said case.
It is worthwhile to mention here the relevant provisions governing refund of Court Fees:
(a) Section 19 [(3B)] of the RDB Act, 1993 which stipulates that - If any application filed before the Tribunal for recovery of any debt is settled prior to the commencement of the hearing before the Tribunal or at any stage of the proceedings before the final order is passed, the applicant may be granted refund of the fees paid by him at such rates as may be prescribed.
(b) The Debt Recovery Tribunals (Refund of Court Fee) Rules, 2013 in respect of Original Applications.
Hence, on going through the above mentioned Section 19 [(3B)] of the RDB Act, 1993 and the Rules mentioned in the DRT (Refund of Court Fee) Rules, 2013, it is very clear that, it is only in the case of OA filed for Recovery of Debts, the question of return of Court Fee arises. By virtue of above Section/Rules, it is clear that, Securitization Application (SA) filed under Section 17 of SARFAESI Act will not come under its purview. Even otherwise, there is no specific Section/Rule in the SARFAESI Act/Rules duly permitting return of Court Fee in SAs.
In view of the above, when the provisions of The RDB/SARFAESI Acts do not permit refund of Court Fee, we may dismiss the petition filed for refund of Court Fees.”
8. ‘Debts Recovery Tribunal
The court established that litigants have an inherent right to a refund of court fees when their application is disposed of as infructuous, despite the absence of an explicit statutory provision for ....
The main legal point established is the determination of court fees payable under the SARFAESI Act and the relevant rules, based on the definition of 'debt' as per the applicable laws.
The Debt Recovery Tribunal must formally adjudicate on the status of parties involved rather than treating fee disputes as mere procedural defects.
The determination of a party's status in debt recovery proceedings must be adjudicated by the Tribunal, not merely treated as a procedural defect.
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