JUDGMENT

VIBHU BAKHRU, J INTRODUCTION

1. The petitioner (State Bank of India – hereafter ‘the SBI’) has filed the present petition impugning an order dated 25.10.2019 (hereafter ‘the impugned order’) passed by the learned Debts Recovery Appellate Tribunal, Delhi (hereafter ‘the DRAT’) in IA No.187/2019 in Appeal No.417/2018 captioned M/s Doon Valley Rice Ltd. v. State Bank of India & Others. Respondent No.1 (Doon Valley Rice Mills Ltd. – hereafter ‘DVR’) had filed the aforementioned application (IA No.187/2019) seeking waiver of any pre-deposit under Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 (hereafter ‘the RDB Act’). The learned DRAT had allowed the said application and by the impugned order had decided to entertain DVR’s appeal.

2. DVR had preferred the said appeal aggrieved by the order dated 21.11.2017 passed by the learned Debts Recovery Tribunal-II, Chandigarh (hereafter ‘the DRT’), whereby it had allowed the SBI’s application (IA No.1403/2017) seeking rejection of the respondents’

counterclaim as not maintainable.

3. The SBI contends that the impugned order violates Section 21 of the RDB Act and that it is not open for the learned DRAT to entertain an appeal of a person indebted to bank(s) and/or financial institution(s) without deposit of a minimum of 25% of the debt due. It is DVR’s case that there is no requirement of a pre-deposit as its appeal before the learned DRAT is confined to the rejection of its counterclaim and not the issuance of the Recovery Certificate.

4. In view of the above, the principal question to be addressed is whether there is any requirement for making any pre-deposit under Section 21 of the RDB Act to maintain an appeal preferred against rejection of a counterclaim made against the concerned bank/financial institution.

FACTUAL BACKGROUND

5. The aforesaid controversy arises in the following context.

6. The SBI had extended the credit / loan facility to DVR sometime in the early 1990’s. SBI claims that DVR defaulted in servicing the loans advanced. Consequently, on 19.06.2002, SBI filed an Original Application (being OA No.425/2002) against DVR and the Guarantors (persons who had guaranteed DVR’s repayment obligations) for recovery of the outstanding amount payable to it.

7. The learned DRT by an order dated 04.11.2011 allowed the SBI’s Original Application (OA No.425/2002) and issued a Recovery Certificate. DVR had also filed a counterclaim, however, the same was dismissed. DVR claimed that it had incurred a loss of ₹15,41,62,780/- and after adjusting the amount of ₹8,37,46,752.97/-, the balance amount of ₹7,50,40,318.81/- was payable by the SBI. The learned DRT held that since the amount of counterclaim exceeded the SBI’s claim, the counterclaim was not maintainable and it had no jurisdiction to decide the same. Accordingly, it rejected DVR’s counterclaim. Insofar as the SBI’s claim is concerned, the learned DRT determined that a sum of ₹6,04,28,763.97/- was due and issued a Recovery Certificate for the said sum of ₹6,04,28,763.97/- along with pendente lite and future interest at the rate of 12% per annum from the date of filing the Original Application (OA No. 425/2002).

8. Aggrieved by the order dated 04.11.2021, DVR filed two appeals. The first in respect of the learned DRT’s decision to issue Recovery Certificate in respect of the SBI’s claim, and the second against the order dated 04.11.2021 rejecting its counterclaim. DVR claimed that pursuant to its complaints, investigation was conducted by the officials of the SBI and they had found that excessive interest was charged from DVR and that the acts of the concerned branch officials had caused losses to DVR. DVR contended that the reports were not produced despite orders passed by the learned DRT.

9. The learned DRAT allowed the said appeals by an order dated 06.04.2015 and remanded the matter to the learned DRT for reconsideration of DVR’s contention regarding counterclaims and to further consider the import of the investigation