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Judgment
Ashok Menon, Chairperson
The matter is taken up for hearing by way of a praecipe filed by Appellant for seeking urgent relief.
The Appellant has come up with an appeal impugning the order dated 27.12.2023 in Appeal No. 2/2023 on the files of Debts Recovery Tribunal-I, Mumbai (D.R.T) whereby on submissions made by the Counsel appearing for the parties across the bar, it was agreed that the Appellant shall come up with a fresh proposal for settlement within 15 days and accordingly the appeal was disposed of.
It is pertinent to note that even though there is a mandate under Section 30A of the Recovery of Debts and Bankruptcy Act, 1993 ( ‘RDB Act’, for short) to make a mandatory pre-deposit for entertaining an appeal filed u/s. 30 of the RDB Act, the same has not been complied with for entertaining the appeal. The Ld. Presiding Officer has also not gone into the merits of the case and has given a direction to the Appellant to approach the Respondent bank with a fresh proposal of settlement.
The Appellant contends that she had approached the Respondent for a settlement, and the Respondent had agreed to a settlement provided for a sum of ₹ 6 crores was paid within 30 days.
Accordingly, the Appellant approached the Ld. Recovery Officer with an Interim Application No. 101/2023 to permit the Appellant to pay ₹ 6 crores and to record full satisfaction of the debt. The Ld. Recovery Officer refused to accept the proposal as per the I.A. which was dismissed, in consequence of which the appeal was filed before the Ld. Presiding Officer, DRT which too got dismissed. The question for determination before the DRT was whether the settlement arrived between the parties concerning the amount of debt to be recovered from the Appellant and others could be enforced at the recovery proceedings by the Ld. Recovery Officer.
It is pertinent to note that the purported settlement arrived at between the parties has no legal sanctity because the sanction of the Tribunal has not been obtained nor has the recovery certificate been amended, modified or withdrawn. Under the circumstances, the settlement could not have been acted upon to force the bank to withdraw the recovery proceedings.
The Appellant need to comply with the mandatory provision of section 21 of the RDB Act to entertain this appeal. There is absolutely no prima facie case for the Appellant. The Appellant has also not provided materials to show that she is under financial strain. Under the circumstances, the Appellant will first have to comply with the mandatory provisions u/s. 21 to deposit 50% of the debt due from the Appellant. The Respondent has filed a reply stating that the debt due is ₹ 43,32,64,388.21 as of date inclusive of interest.
The Ld. Counsel appearing for the Appellant contends that since the parties have arrived at a settlement of the debt for an amount of ₹ 6,25,00,000/- that should be taken as the threshold amount for payment of pre-deposit.
Debt due as mentioned in Sec. 21 of the RDB Act refers to a debt due as per Sec. 2(g) which is a debt which has been determined to be due together with the interest that has accrued and therefore, the Appellants will have to make the mandatory pre-deposit on the threshold amount of ₹ 43,32,64,388.21.
The Appellant is therefore directed to deposit 50% of the said amount towards pre-deposit for entertaining the appeal. The said amount of ₹ 21,66,32,194.10 shall be paid within six weeks on or before 28.02.2024. In default, the Appeal shall stand dismissed, without any further reference to this Tribunal.
The amount shall be deposited in the form of a Demand Draft with the Registrar of this Tribunal.
As and when the said amounts are deposited, they shall be invested in term deposits in the name of Registrar, DRAT, Mumbai, with any nationalised bank, initially for 13 months, and thereafter to be renewed periodically.
With these observations, the I.A. is disposed of. The Respondent is at liberty to file a reply in the Appeal with an advance copy to the other side.
Post on 29.02.2024 for reporting compliance concerning the payment.