Housing And Urban Development Corporation Ltd vs Vikram Bakshi And Ors

The appellant(HUDCO) is aggrieved by the entertainment by the DRT of an appeal filed by respondents herein(CDs) under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993(RDDBFI Act)without ensuring compliance of the mandatory requirement of making of a pre-deposit of 50% of the amount of debt adjudicated by the DRT against the respondents to be recoverable from them vide orders dated 12.08.2015, which subsequently came to be modifiedvide order dated 12.11.2018, passed by DRT in O.A.No.224/2013 filed by the appellant herein under Section 19 of the RDDBFI Act.

The appellant had advanced loan of eighty crores of rupees in theyear 2006 to respondent no.2 M/s Ascot Hotels & Resorts Pvt. Ltd. Repayment of that loan was guaranteed by other respondents. Since the loan was not repaid by the respondents the appellant filed Original Application (O.A.) before the DRT-II, Delhi for recovery of Rs.73,78,82,759/- with interest thereon at the contractual rate. That O.A. was allowed and a joint and several recoverycertificate was ordered to be issued against the respondents herein.

Recovery Certificate was forwarded to the Recovery Officer for execution and recovery of Rs.68,62,91,032/- with interest @ 15% p.a. with quarterly rests. That recovery proceedings were registered as RC No.330/2015. Before the Recovery Officer, the appellant(CH) prayed for certain directions for attachment etc. of the assets of the certificate debtors (CDs), respondents herein. The Recovery Officer passed one order on 09.05.2019 giving certain directions to be complied with by respondent no.1 herein Mr.VikramBakshi(CD No.3 in recovery proceedings)and one Company by the name of McDonalds India Pvt. Ltd.CD No.3 Mr. VikramBakshi felt aggrieved by the directions given by the Recovery Officer on 09.05.2019 and so he filed an appeal before the learned Presiding Officer of DRT-II, Delhi under Section 30(1) of RDDBFI Act which came to registered as Appeal No.776/2019).

It is undisputed that for the entertainment the appeal filed by CD Mr. VikramBakshi he was supposed to make a mandatory pre-deposit of 50% of the amount of debt adjudicated by DRT in the O.A. filed by appellant herein against him and other respondents-defendants. The pre-deposit is required to be made under Section 30(A) of RDDBFI Act. The appellant CH accordingly filed an application, I.A.No. 126/2019, dated 25.05.2019 before the Presiding Officer for a direction to the appellant Mr. VikramBakshi to make the pre-deposit of 50% of the debt due under the recovery certificate issued by DRT in the O.A. as on 25.05.2019. The respondent herein, CD No.3, does not appear to have filed reply to the application of HUDCO. The learned DRT directed Mr.VikramBakshi, vide order dated 06.06.2019, to make the pre-deposit of 50% taking note of the fact that recovery certificate was for a sum of Rs.68,62,91,032 with interest @ 15.5% p.a. The DRT also observed that the appellant therein was entitled to the adjustment of Rs. 56,42,42,111/- which he was claiming to have paid to HUDCO after 30.11.2006 upon receipt of demand notice under Section 13(2) of SARFAESI Act and the amount of ten crores paid by him after filing of the appeal and after adjustment of those amounts the pre-deposit for the balance amount was directed to be made within 30 days.

Then in the impugned order dated 09.07.2019 the learned Presiding Officer observed that the appellant VikramBakshi had made pre-deposit of 50% of the RC amount after taking into consideration the sale proceeds of sale of one mortgaged property whichhad fetched Rs.2.40 crores, Rs. 10 crores deposited on 28.05.2019 and Rs.8,96,05,271/-.

In this appeal the appellant HUDCO has claimed that since final adjudication of debt payable by CDs was done by the DRT while passing the final order in the O.A. and recovery certificate for Rs.68,62,91,032/-with interest there was no occasion to give any benefit of payments which CD VikramBakshi was claiming to have made after receipt of demand notice after 30.11.2006 under Section 13(2) of SARFAESI Act. It has been claimed by the appellant herein that a sum of Rs. 143.16 crores approx. was payable by CD VikramBakshi on the dateof filing of appeal by him before the DRT and accordingly he was required to make pre-deposit of 50% of that amount.

On behalf of respondent his learned counsel Mr.PallavSaxena had, while supporting the impugned observation of the DRT in the order dated 9.7.2019 that requirement of pre-deposit of 50% of the debt in question stood complied with, also submitted that the respondent's appeal in fact has already been rendered infructuous because the shares which the respondent CD held in one Company by the name of M/s Connaught Plaza Restaurant Pvt. Ltd., stay against transfer of which shares was being sought from the Recovery Officer, have already been transferred to M/s McDonalds India Pvt. Ltd.

However, in my view, as far as the submission of Mr.Saxena that respondent's appeal has become infructuous, which in fact was his stand even before the DRT in his written statement, is concerned, this Tribunal has no observations to make since the fact remains that respondent's appeal is still pending before the DRT. Therefore, this Tribunal is to examine the correctness of the observation of the learned Presiding Officer of DRT that requirement of pre-deposit stood complied with, which observation obviously appears to have been made taking into consideration the payments allegedly made by the respondent CD to the CH appellant after receipt of demand notice under Section 13(2) of the SARFAESI Act. In my view, this observation is patently illegal for the reason that the DRT itself had decided the appellant's O.A. in the year 2015 when a recovery certificate for a sum of Rs.68,62,91,032/- with interest thereon was passed and recovery certificate was issued accordingly. That recovery certificate was subsequently modified also vide order dated 12.11.2018 by the DRT vide which the principal amount had remained the same while some variation was made in the interest rate. After disposal of the O.A. and issuance of recovery certificate for the aforesaid amount, there was no occasion for the learned Presiding Officer to have observed that respondent CD was entitled to the adjustment of the payments made by the respondent after receipt of demand notice under Section 13(2) of the SARFAESI Act. If that view of the learned DRT is accepted, that would mean that the learned Presiding Officer himself was accepting that the recovery certificate directed to be issued in the O.A. was wrongly issued for the above referred amount of Rs.68,62,91,032/-. In the on-going execution proceedings no such variation could be made in the recovery certificate amount. For the purposes of compliance of the condition of pre-deposit for the entertainment of the respondents' appeal, the amount of which 50% pre-deposit was to be made is the amount which was finally adjudicated by the learned DRT in the FI's O.A.

For the aforesaid reasons, finding the decision of the learned Presiding Officer that requirement of pre-deposit stood complied with to be patently illegal and unsustainable, this appeal is disposed of by directing the learned Presiding Officer of the DRT now to proceed further in the appeal only if the appellant before it, respondent herein, makes a pre-deposit of half of the amount of debt determined by the DRT to be recoverable from him in its order dated 12.8.2015 in the FI's O.A. after adding the interest amount awarded by the DRT on the aforesaid principal amount of Rs.68,62,91,032/- from 1.4.2013 till 12.8.2015. In case the respondent has made any payments to the FI or FI has recovered any amount after 12.8.2015, the respondent will be entitled to adjustment of those payments and the pre-deposit on the balance amount will have to be made. This pre-deposit will now be made by the respondent herein within a period of four weeks, failing which the appeal pending before the DRT shall become liable to be dismissed as not entertainable on this ground alone.

This appeal stands disposed of accordingly. The DRT be informed of the present order.