Kakkar Steel Forgings And Ors. vs State Bank Of India And Ors.

S.N.H. Zaidi, J

The appellant has filed the instant application with the affidavit of appellant No. 2 under the Proviso to Section 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short 'the Act') for the waiver of the amount required to be deposited for entertaining the appeal under the said Act. Reply to the said application has been filed by the respondent Bank with affidavit dated 15.3.2011 of its Chief Manager.

I have heard Mr. R.S. Mittal, learned Sr. Advocate accompanied by Mr. Mukul Chandra, for the appellants and Mr. S.L Gupta for the respondent Bank.

After the parties were heard and orders were reserved on 28.11.2011, the appellants filed an application dated 1.12.2011 for passing order holding that the application of the appellants for waiver of the condition of pre-deposit be deemed to have been allowed.

Mr. Mittal mainly stressed that the learned DRT had allowed the O.A. for the recovery of Rs. 96, 66, 113/- filed by the Bank without there being any evidence on record regarding the alleged loan. It has also been submitted that appellant No. 2, who is the Managing Partner of appellant No. 1, is a retired Colonel of Indian Army with modest means of income and has no financial source which could enable him to make deposit in terms of Section 21 of the Act.

It has been stated in the application dated 1.12.2011 that on 5.5.2011, this Tribunal, while condoning the delay in filing the appeal, directed the case to be listed for the next date for arguments on the waiver application as well as on admission of appeal and on the next date, the Tribunal heard the parties' Counsel only on admission of appeal despite the fact that it was also listed for hearing of waiver application and as such the Tribunal shall be deemed to have allowed complete waiver of the condition of pre-deposit.

Mr. Gupta, on the other hand, vehemently opposed the application and submitted that as on 28.2.2011 an amount of Rs. 1237 lakh was outstanding against the appellants. He also submitted that the original documents, which were filed in the suit before the Civil Court, had been lost in transit when the suit was transferred to DRT and a categorical statement to that effect had been made by the Bank and this Appellate Tribunal, vide order dated 21.11.2008, had already set the issue at rest and allowed the reliance on photocopies of those documents, copies whereof were also supplied to the appellants, but neither any categorical denial of those documents, nor any written statement has been filed by the appellants. Mr. Gupta also submitted that besides appellant No. 2, proforma respondent Nos. 2 and 3 were also the defendants in the O.A. and he had instructions that proforma respondent No. 2 Verender Singh, who is son of appellant No. 2, is a NRI and is earning huge amount of money and even appellant No. 2 is a man of means and, as such, he is not entitled to any waiver.

So far as the appellants' contention that O.A. has been allowed without there being any admissible evidence in law on record, is concerned, it is not relevant for the consideration of the application filed under the Proviso to Section 21 of the Act. This question touches the merit of the case and as such, it can be considered only when the appeal is entitled to be entertained.

I do not find any substance in the contention of the appellants that though the appeal was listed on 27.5.2011 for hearing on admission and waiver application and on that date his Tribunal heard the parties on the point of admission only and ordered for summoning the record of the lower Court, the waiver application shall be deemed to have been allowed. By any stretch of imagination, it cannot be said that the waiver application had been allowed, as, admittedly, no order was passed by this Tribunal on the prayer of waiver made through the instant application. An application filed by any of the parties whereon objections/reply are invited/filed, does require an specific order of disposal and the same cannot be deemed to have been disposed of without a order qua that application.

Section 21 of the Act makes it necessary for a person from whom an amount of debt is due to a Bank or financial institution to deposit 75% of the amount of debt so due as determined by the Tribunal, for the entertainment of the appeal by the Appellate Tribunal, though, such deposit can be waived or reduced by the Tribunal, for reasons to be recorded in writing under the proviso to the said section. The impugned order dated 17.12.2008 passed in the O.A. shows that the learned DRT-II, Chandigarh had determined the liability of the defendants (appellants herein) as Rs. 96, 66, 113/-jointly and severally with costs, pendente lite and future interest. The appellants have utterly failed to satisfy this Tribunal as to why the amount required to be deposited under Section 21 of the Act be fully waived. Besides the appellants, proforma respondents 2 and 3 were also the defendants in the O.A. and though the appeal has been filed by the appellants only, making other defendants as respondents, yet the financial means of other defendants from whom also the amount of debt in question is due to the Bank and they have also been held liable jointly and severally for the same, as per the impugned order, can also be taken into consideration while deciding the question of wavier or reduction of deposit under the Proviso to Section 21 of the Act, but, nothing has been said about the financial means of the proforma respondents, No details of the properties of the appellants or source of their income have been given either in the application or in the accompanying affidavit.

In view of the above discussion, 1 hold that it is not a fit case for complete waiver of the amount required to be deposited under Section 21 of the Act, but considering that appellant No. 2 is a retired Colonel of the Indian Army, the amount of pre-deposit is reduced to 25% of the amount of debt as determined by the learned DRT. The amount determined by the DRT is Rs. 96, 66, 113/-, therefore, 25% of the said amount comes to Rs. 24, 16, 528.25. The appellants are directed to deposit the aforesaid amount, out of which Rs. 12, 08, 528/- will be deposited on or before 11.1.2012 and the balance amount of Rs. 12, 08, 000/- will be deposited on or before 10.2.2012, with the Registrar of this Appellate Tribunal.

Needless to say that in case of default in any of the deposits as aforesaid, the appeal shall not be entertained. The application is disposed of accordingly.