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Judgment
R. D. Khare, Chairperson
Learned counsels for the parties were heard on the recall application filed by the respondent-Bank and the case was reserved for orders vide order dated 28.02.2024.
The present recall application has been filed by the respondent-Bank for recalling the order dated 22.03.2023, by which the waiver application has been allowed and the interim relief also.
Learned counsel for the respondent-Bank/recall applicant has drawn attention of this court to page No. 12 of the waiver application dated 03.11.2022 filed by the appellant, which is statement of account and has stated that last entry of the said statement of the account is dated 11.03.2021, which shows that Rs. 10.00 lacs has been deposited. The learned counsel has further drawn attention of this court to page No. 102 of the memo of appeal, which is notice dated 18.12.2019 under section 13(2) of the SARFAESI Act and has stated that the total amount due against the appellant as per the said notice was Rs. 10,62,83,307/-, which is depicted from page No. 103 of the memo of appeal. The learned counsel also submitted that by misleading this court that the appellant has deposited Rs. 3,28,70,730.58 on different dates, which is approximately 30% of the total demanded amount, is incorrect, as the appellant has only deposited the amount as mentioned at page No. 12 of the waiver application, although the deposit, which was made prior to issuance of the second demand notice, has already been appropriated in the account of the appellant-Company and only the amount, which has been deposited after issuance of notice dated 18.12.2019, is Rs. 10.00 lacs. As such the learned counsel for the appellant has concealed the material facts before this Court in getting the waiver application allowed and in obtaining the interim order, therefore, it was prayed that the present recall application may be allowed and the order impugned may be recalled and the appellant may be directed to deposit 50% of the demanded amount for maintaining the appeal.
Learned counsel for the appellant has also referred to page No. 37 of the paper book, which is notice dated 12.08.2016 under section 13(2) of the SARFAESI Act and has argued that once the account was restructured and amount of Rs. 3,28.70,730.58 deposited by the appellant was also appropriated, which is stated in para No. 4 of the waiver application dated 03.11.2022 and later on if the same fails, then the account would revert back to its original stage and no fresh notice can be issued, therefore, the notice as issued by the Bank on 18.12.2019, copy of which has been appended at page No. 102 of the paper book, is illegal and cannot be sustained in the eye of law.
Learned counsel for the appellant-borrower further submitted that the Tribunal has no power to recall its order, as there is no provision in the SARFAESI Act for the same and only the higher court can do the same. The order impugned was passed in presence of the counsel for the Bank Shri A.P. Yadav, who was representing the Bank on the date, when the order impugned was passed and also the said order was passed after giving sufficient opportunity to the Bank to contest the case.
Learned counsel for the appellant also submitted that 30% of the demanded amount has been deposited by the appellant after the account was declared as NPA on 30.07.2016. Against the NPA amount of Rs. 5.45 crore, the appellant deposited Rs. 3,28,70,730/-, which is more than 50% of the said amount.
The next submission of the learned counsel for the appellant was that the NPA account of the borrower was restructured and fresh sanction letter was issued, as also fresh agreement was executed, as such the earlier process of the Bank seized to exists in the eyes of law. It was also contended that after restructuring the account, on default of which the account was required again to be classified as NPA, but it was not done, therefore, the second demand notice is also illegal and cannot be sustained. Hence the appellant is not required to deposit any further amount towards pre-deposit. It was, therefore, prayed that the order impugned has rightly been passed and does not call for any interference.
Heard the learned counsels for the parties and considered the material available on record.
It is to be seen that the appellant-firm was granted various credit facilities by the respondent-Bank and on default in repayment of the dues of the Bank, the account was classified as NPA on 30.07.2016 and the demand notice dated 12.08.2016 under section 13(2) of the SARFAESI Act was issued for Rs. 9,72,99,323.02. Thereafter, on the request of the appellant, the said account was restructured vide sanction letter dated 15.12.2017, but it appears that the borrower again failed to maintain the financial discipline, therefore, the demand notice dated 18.12.2019 under section 13(2) of the said Act was again issued for Rs. 10,62,83,307/-. The borrower filed the representation dated 11.02.2020 against the said demand notice before the Bank under section 13(3-A) of the SARFAESI Act. It is admitted by the appellant that he had deposited Rs. 3,18,70,730/- prior to issuance of second demand notice dated 18.12.2019. Since the account was restructured and was made regular, therefore, the said amount was appropriated in the loan accounts.
The question of the appellant that without declaring the account as NPA, the second demand notice is not sustainable is not tenable because on the request of the appellant-borrower, the loan accounts were restructured and made regular, as the amount deposited by the appellant pursuant to earlier demand notice was appropriated, but on default again being made by the appellant, the demand was changed, therefore, afresh demand notice was necessary to be issued withdrawing the first demand notice.
So far as the reclassification of the account as NPA is concerned, the same pertains to the merits of the case, which shall be decided at the time of passing the final order. At this stage, the only question is, as to whether the waiver application was rightly allowed or not?
It is to be seen that on 22.03.2023, when the impugned order was passed, the appellant had submitted that 30% of the total demanded amount has already been deposited and on believing the said contention, the waiver application was allowed and the interim protection was granted by this Appellate Tribunal, whereas the appellant ought not to have concealed the facts as stated above. If the above facts had been narrated by the appellant, it might be, the waiver application would not have been allowed nor interim relief would have been granted. Any order passed on wrong facts is null and void, therefore, I am inclined to recall the order dated 22.03.2023, by which the waiver application was allowed and interim relief was granted. Thus, the order dated 22.03.2023 passed by this Tribunal is hereby recalled. Consequently, the waiver application stands restored to its original status.
The present appeal has been filed under section 18 of the SARFAEI Act against the final order dated 01.09.2022, by which the S.A. filed by the appellant has been dismissed. The second proviso of section 18 says 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 creditors or determined by the Debts Recovery Tribunal, whichever is less. The third proviso of the said section further says that the Appellate Tribunal may, for the reasons to be recorded in writing, reduce the amount to not less than 25% of debt referred to in the second proviso. The demand notice under section 13(2) dated 18.12.2019 has been issued for Rs. 10,62,83,307/- after adjusting the amount of Rs. 3,18,70,730/-, which was deposited by the appellant on different dates prior to the said notice. After issuance of the said demand notice, only Rs. 10.00 lacs was deposited before the Tribunal below by the appellant pursuant to the order passed by Tribunal below. Since the appellant has not come before this Tribunal with clean hands, therefore, the appellant does not deserve any relaxation. Thus, the appellant is directed to deposit 50% of the amount demanded in the notice dated 18.12.2019 under section 13(2) of the SARFAESI Act after deducting Rs. 10.00 lacs, which was deposited by the appellant before the Tribunal below, in the form of the demand draft favouring the Registrar, Debts Recovery Appellate Tribunal, Allahabad within one month from the date of this order. If the amount is deposited, the Registrar shall keep the same in the shape of FDR in the Nationalized Bank for a period of one year in auto renewal scheme. In case the appellant does not deposit the same within stipulated period as prescribed above, the appeal shall stand dismissed without further reference to this Court. In case of deposit, the Registrar shall place this case before this Court within a week from the date of deposit of the amount by the appellant.