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Judgment
By an order dated 20/9/2011, notice for final disposal was issued. Rule. Rule is made returnable forthwith. Petition is heard finally.
The respondent no.2 is borrower of petitioner Godavari Laxmi Cooperative Bank Ltd. The respondent no.2 filed proceedings u/section 17 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [for short the Act of 2002] consequent to the issuance of notice u/section 13(4) of the said Act. By judgment and order dated 7/3/2011, the Debt Recovery Tribunal, Aurangabad dismissed the Securitisation Application No.08/2010.
Respondent no.2 preferred an Appeal under the provisions of Section 18 of the Act of 2002 before the Debts Recovery Appellate Tribunal, Mumbai. Respondent no.2 filed application bearing No.M.A.328/11 in Appeal No.66/11 seeking waiver of deposit as prescribed u/section 18(1) of the Act of 2002 on 24/3/2011. The appellant filed reply to the said application. By order dated 27/4/11 the Appellate Tribunal allowed the application filed by respondent no.2 by observing that respondent no.2 herein cannot be asked to deposit any more amount and no amount is required to be deposited u/section 18(1) of the Act of 2002. The petitioner bank has questioned the correctness and legality of the said order in the present petition.
The learned counsel appearing for the petitioner Shri Deve submits that notice u/section 13[2] of the Act of 2002 was issued by the bank on 11/5/2007. A notice was issued resorting the provisions of Section 13[4] of the Act of 2002 on 26/12/2009. The notice is titled as possession notice. The relevant portion of the notice which is ascertained from the original record is reproduced herein below :
Whereas,
The undersigned being the Authorised Officer of the Godavari Laxmi Co-op. Bank Ltd. Jalgaon under the Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest [Act 2002 (54 of 2002)] and in exercise of powers conferred u/s 13(12) read with rule 9 of the Security Interest (Enforcement) Rules 2002, issued Demand Notice dated 11/05/2007 calling upon the borrower Mohd. Shafi Mohd. Husen Humduley Prop. Maharashtra Boiler & Tubining Corporation to repay the amount mentioned in the notice being Rs.45,61.459.54 + Intt (Rupees Forty Five Lac Sixty One Thousand Four Hundred Fifty Nine & Paise Fifty Four Only) within 60 days from the date of receipt of the said notice has present outstanding Rs. 24,61,985.54 + intt. + expenses as on 30.11.2009.
The borrower having failed to repay full amount even after many chances, notice is hereby given to the borrower and the public in general that the undersigned has taken symbolic possession of the property described herein below in exercise of powers conferred on him u/s 13(4) of the said Act read with rule 9 on this 26th day of Dec. of the year 2009.
The borrower in particular and the public in general is hereby cautioned not to deal with the property. Any dealings with the property will be subject to the charge of the Godavari Laxmi Co-op. Bank Ltd. Jalgaon for an amount of Rs.24,61,985.54 and interest, cost & expenses thereon.
The learned counsel for the petitioner submits that the Appellate Tribunal erred in clubbing the figures as mentioned in the notice u/section 13(2) and 13(4) of the Act. There was error on the part of Tribunal in accepting the contentions of the respondent no. 2 that sum of Rs.41.50 Lakhs was already deposited by the respondent no.2 with the petitioner subsequent to the notice issued u/section 13(2) of the Act of 2002. Respondent no.2 did not comply with the provisions of Section 18(1) of the Act.
In the facts of the case, according to the learned counsel for petitioner, respondent no.2 has not deposited 50% of the amount which is due from respondent no.2 as claimed by the secured creditor. The learned counsel has placed reliance on the judgment reported in Narayana Chandra Ghosh Vs. UCO Bank and Others, in support of his submissions.
The learned counsel appearing for respondent no.2 submits that proceedings were initiated before the Debt Recovery Tribunal, Aurangabad consequent to the notice issued by the petitioner u/section 13(4) of the Act 2002. Section 13(4) of the Act of 2002 relates to the amount claimed by the bank in notice issued u/section 13(2) of the Act of 2002. The counsel further submits that in the possession notice, the petitioner bank had referred to outstanding amount of Rs.45,61,459.54 + interest and the present outstanding amount of Rs.24,61,985.54 + interest + expenses as on 30/11/2009. It is submitted that even if these two figures of amount claimed are clubbed together, it can be ascertained that the respondent no.2 having paid 41.50 lakhs in favour of the petitioner bank, the pre condition for entertaining Appeal u/section 18 by Appellate Tribunal gets satisfied. In other words, the respondent no.2 claims that having deposited 50% of the amount due from respondent no.2 his Appeal filed before Appellate Tribunal shall be entertained without calling upon the respondent no.2 to deposit any further amount.
We have perused the original record and proceedings, the impugned order, reply filed by respondent, and the relevant notice issued by the petitioner to the respondent no.2. We have perused the judgment cited supra.
There is no dispute between the parties that the bank had issued notice u/section 13(2) of the Act of 2002 on 11/5/2007. The petitioner-bank had also resorted to measures as prescribed u/section 13(4) of the Act of 2002 by issuing a possession notice on 26/12/2009. The bank is entitled u/section 13(4) of the Act of 2002 to take recourse to measures provided under the said provisions to recover the secured debt on failure of borrower to discharge his liability in full within the period specified in sub Section 2 of the Act.
In the facts of the case and considering the notice issued u/section 13(2) of the Act of 2002, we find that the petitioner bank had claimed as present outstanding, an amount of Rs.24,61,985.54 Ps. and accordingly, the charge was kept upon the subject property by intimating public in general. The bank had described the immovable property over which the charge was kept in the notice issued u/section 13(4) on 26/12/2009. Under the provisions of Section 17 of the Act of 2002, any person aggrieved by any of the measures referred to in sub Section 4 of Section 13, is entitled to approach D.R.T. Under the provisions of Section 18 of the said Act, any person aggrieved by any order passed by D.R.T. u/section 17 may prefer an appeal alongwith such fees as may be prescribed. The second proviso to Section 18 of the said Act provides that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal 50% of the amount of debt due from him as claimed by the secured creditor [emphasis supplied].
In the facts of the present case and considering the notice issued by the petitioner bank to respondent no.2 it is clear that the amount due and claimed by the petitioner from respondent no.2 for the purposes of entertaining the appeal by Appellate Tribunal would be amount of Rs.24,61,985.54 Ps.
We find that the Appellate Tribunal committed error in waiving the mandatory condition of pre deposit by the respondent no.2 before entertaining the appeal as stipulated under the provisions of Section 18 of the Act of 2002. In the light of the reasonings adopted by us as above, we find that the order passed by the Appellate Tribunal is required to be quashed and set aside.
We accordingly quash and set aside the order passed by the Debt Recovery Appellate Tribunal, Mumbai in M.A.No.323/2011 in Appeal No.66/2011 dated 27/4/2001. The D.R.A.T. Mumbai shall pass appropriate order in the light of provisions of Section 18 of the Act of 2002 keeping in view the amount due as claimed from respondent no.2 by petitioner as a secured creditor to the extent of Rs.24,61,985.54 Ps. Rule is made absolute in the above terms.
At this stage, learned counsel for respondent no.2 prayed for stay to the operation of this order for a period of 2 weeks. Request is refused.