Ashish Ghai And Ors. vs ICICI Bank Ltd.

J.M. Malik, J

The appellants had taken home loan in the sum of Rs. 1,35,49,790/- out of which they have repaid Rs. 30 lacs. They are defaulters and notice under Section 13(2) of the SRFAESI Act was issued. Thereafter, S.A. was filed before the learned Trial Court. Notice under Section 13(2) of the SRFAESI Act reveals that an amount of Rs. 1,62,78,540/- was outstanding against the applicant as on 18.6.2010 and as on date Rs. 2 and odd crores is due. It appears that the same amount is inclusive of interest. The learned Trial Court stayed the recovery of the loan subject to appellants' deposing Rs. 20 lacs within twenty days and Rs. 30 lacs within next thirty days vide order passed on 13.6.2011. The case was adjourned to 29.8.2011. Aggrieved by that order, the present appeal has been preferred.

I have heard the Counsel for the parties. Counsel for the parties have argued the case on the question of pre-deposit. Counsel for the appellants has placed reliance on an authority reported in Nahar Industrial Enterprises Limited v. Hong Kong and Shanghai Banking Corporation, : III (2009) BC 539 (SC) : V (2009) SLT 737 : (2009) 8 SCC 646. He has drawn my attention towards head note 'K' of the said authority but did not cite the portion of the judgment as such. That authority pertains to Sections 20 and 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. However, in the instant case we are dealing with the S.A. filed under SRFAESI Act.

In a latest case, Bombay High Court, reported in M/s. Vinay Containers Services Pvt. Ltd. & Ors. v. Axis Bank, : IV (2011) BC 191 (DB), decided on 16.11.2010 it was held that requirement of pre-deposit under Section 18(1) of the Act would be attracted where the order that is challenged in an appeal before the Appellate Tribunal is not a final order under Section 17 but is an interlocutory order. SLP preferred against that case was dismissed by the Apex Court in limine vide order passed by the Apex Court in Petition for Special Leave to Appeal (Civil) No. 36326/2010 dated 7.1.2011.

Again in another case reported in Narayan Chandra Ghosh v. UCO Bank and Ors., IV (2011) SLT 229 : II (2011) CLT 355 (SC), Civil Appeal No. 2681/2011 [Arising out of SLP (C) No. 5488/2011 ] decided by the Apex Court on 18.3.2011, it was held:

The argument of learned Counsel for the appellant that as the amount of debt due had not been determined by the Debts Recovery Tribunal, appeal could be entertained by the Appellate Tribunal without insisting on pre-deposit, is equally fallacious. Under the second proviso to Sub-section (1) of Section 18 of the Act the amount of fifty per cent, which is required to be deposited by the borrower, is computed either with reference to the debt due from him as claimed by the secured creditors or as determined by the Debts Recovery Tribunal, whichever is less. Obviously, where the amount of debt is yet to be determined by the Debts Recovery Tribunal, the borrower, while preferring appeal, would be liable to deposit fifty per cent of the debt due from him as claimed by the secured creditors. Therefore, the condition of pre-deposit being mandatory, a complete waiver of deposit by the appellant with the Appellate Tribunal, was beyond the provisions of the Act, as is evident from the second and third proviso to the said Section. At best, the Appellate Tribunal could have, after recording the reasons, reduced the amount of deposit of fifty per cent to an amount not less than twenty five per cent of the debt referred to in the second proviso. We are convinced that the order of the Appellate Tribunal, entertaining appellant's appeal without insisting on pre-deposit was clearly unsustainable and, therefore, the decision of the High Court in setting aside the same cannot be flawed.

It is stated before us that in the notice issued to the appellant under Section 13(2) of the Act, the debt due from the appellant as on 25th September, 2006 was Rs. 52,42,474/. Since in the present case Debts Recovery Tribunal had not determined the debt due, we direct that on appellant's depositing with the Appellate Tribunal an amount of Rs. 15 lakh within a period of four weeks from today, his appeal shall be entertained and decided on merits. We direct that till the Appellate Tribunal takes a final decision in the appeal, the Bank shall maintain status quo in respect of the property of which physical possession is stated to have been taken by it.

Counsel for the appellants submitted that this order was passed on the final judgment.

However, I am of the considered view that the need of pre-deposit would arise only if this Court admits this appeal. The learned Counsel for the appellants vehemently argued that the interest charged by the respondent Bank is excessive, higher and unconscionable. He submits that Bank is not charging interest as per Ravindra's Judgment. All these facts are kept open and will be considered by the learned Trial Court at the proper time i.e. at the time of final arguments. At this stage the duty cast on this Court is to find out whether the condition laid by the learned Trial Court is correct?

This was not denied by this Court that the appellants have been the defaulters. The law does not require that defaulters must be awarded. Despite the order passed by the learned Trial Court the appellants have deposited a sum of Rs. 5 lacs only. As per the order-sheet of this Court dated 5.7.2011, the said Rs. 5 lacs was deposited as per the offer made by the Counsel for the appellants. It is stated that appellants are still in arrears for a sum more than Rs. 45 lacs. Under these circumstances, the order passed by the learned Trial Court appears to be quite just and reasonable. The appeal has no merit and the same is, therefore, dismissed in limine,

However, the Counsel for the appellants has prayed that the appellants should be given six months' time to deposit the rest of the amount. Grant of enough time would go a long way to defeat the purpose of the SRFAESI Act which requires that the recovery of debt should be fast. Keeping in view all the facts and circumstances, I still take a lenient view and direct the appellants to deposit Rs. 45 lacs in three equated monthly instalments. The first instalment would be paid till 8.8.2011; second till 8.9.2011 and third till 8.10.2011. If they fail to deposit even a single instalment, the respondent Bank will be at liberty to proceed against them as per law. In case they deposit the entire amount in time their appeal shall stand accepted. The learned Trial Court is directed to take efforts to expedite the case. The Bank must file the reply before the learned Trial Court, if not already filed, on 29.8.2011 for which no other date be given and the rejoinder must be filed within next two weeks as ordered by the learned Trial Court. The appeal stands disposed of. Copies of this order be furnished to the parties as per law and one copy be sent to the learned DRT forthwith.