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Judgment
P.K. Bhasin, J
The appellant claims to be a builder and developer and is aggrieved by an order of the Debts Recovery Tribunal (DRT) in its petition under Section 17 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short 'SARFAESI Act') whereby instead of staying sale of property No. U-29, Green Park, New Delhi (hereinafter to be referred as the 'mortgaged property'), as was the prayer of the appellant, proposed to be conducted by respondent No. 1 Bank, which claims to be the mortgagee of the same having been mortgaged by its owner Preeti Bansal, respondent No. 2 herein, to whom over seven crores of rupees was given as housing loan, and in respect of which it had entered into a building/collaboration agreement with the owner/borrower after the creation of mortgage and to whom it had paid over a crore of rupees besides spending money in constructing a huge new house after demolishing old structure, has ordered while issuing notice of the petition to the Bank that the Bank could go ahead with the auction but after giving fifteen days' notice to the appellant. The relevant facts as could be culled out from the records and which are undisputed are as under:
The respondent No. 1 Bank gave loan of over seven crores to respondent No. 2 herein sometime during the year 2013 perhaps to enable her to construct a new house after demolishing the mortgaged property. The mortgage of the mortgaged property was created in favour of the respondent No. 1 Bank to secure repayment of the loan amount as per the loan agreement by respondent No. 2 borrower/mortgagor.
After taking loan from respondent No. 1 Bank respondent No. 2 entered into a collaboration agreement dated 3.6.3015 with the appellant herein for the construction of a new residential building after demolishing the mortgaged property. The appellant accordingly demolished the old structure and it claims to have already constructed new building consisting of stilt area for parking of cars by the owners of different floors, ground floor, first floor, second floor and third floor storeyed building which though has not so far been made fit for occupation and now the same cannot even be completed because the respondent No. 1 Bank has now taken over physical possession of the mortgaged property because of the borrower/mortgagor having failed to adhere to the terms of loan and his defaulting in paying back the loan money. The appellant Bank has taken possession of the mortgaged property in exercise of its power as a secured creditor under Section 14 of the SARFAESI Act.
Before the appellant Bank could take physical possession of the mortgaged property it had served the requisite demand notice under Section 13(2) of the SARFAESI Act upon the borrower/guarantor/mortgagor as well as upon the limit herein upon coming to know that its borrower/mortgagor had handed over possession of the mortgaged property to appellant herein under a collaboration/building contract. The borrower/guarantor/mortgagor did not bother to take any legal action against its creditor Bank. Instead, the appellant claiming to have been adversely affected by the non-disclosure of the prior mortgage of the mortgaged property in favour of the appellant Bank to it by respondent No. 2 while entering into collaboration/building contract and then committing default in repaying the Bank's, dues as per the terms of grant of loan approached the DRT by invoking the provisions of Section 17 of the SARFAESI Act so that the auction of the mortgaged property could be stopped. In that petition the appellant had sought ex parte ad interim relief against the Bank against its threatened action of taking over of physical possession of the mortgaged property but the DRT did not grant any ex parte relief to the appellant and passed the following ex parte order on 2.9.2016 with which the appellant felt seriously aggrieved and filed the present appeal:
"I.A. No. 1147/2016
This IA has been filed on behalf of applicant praying therein to implead the borrowers as a necessary party to this SA and take on record the amended memo of parties.
Let Notice on this IA bo issued to the other sides, inviting their reply(s). Notice be served Dasti as well as through speed post along with copy of IA. Learned Counsel for applicant is directed to collect the notice and serve the same upon other sides, as stated above, and file proof of service.
SA
Meanwhile respondent Bank is directed to give 15-days prior notice to the applicant herein before proceeding, for the auction of the property in question.
Case be listed on 4.10.2016.
Dasti
Sd/-
(Dr. Rekha Dhakar)
Presiding Officer
DRT-I, Delhi"
This Tribunal issued notice of the appeal to the respondents. Respondent No. 1 Bank only entered appearance and not the borrower, respondent No. 2. Since there was no restraint order against the Bank it succeeded in taking over physical possession of the mortgaged property through a receiver who had already been appointed on 1.9.2016 by the Chief Metropolitan Magistrate (South), Delhi when approached by the respondent No. 1 Bank under Section 14 of the SARFAESI Act.
When this appeal came up for hearing after notice to the Bank it was put by this Tribunal to Mr. Mukul Gupta, the learned Senior Counsel for the appellant as to how this appeal could be entertained without compliance of the mandatory requirement under Section 18 of SARFAESI Act of pre-deposit of 50% of the amount of money demanded from the borrower by the respondent No. 1 Bank in its notice under Section 13(2) of the SARFAESI Act, the response of the learned Senior Counsel was that in the facts of the present case, where the aggrieved party is neither a borrower nor a guarantor and not even a mortgagor and was simply a third party affected by the action of the Bank, who can also have recourse to the remedy of appeal under Section 18, compliance of Section 18 of SARFAESI Act was not necessary and that the remedy of appeal to a third party cannot be negated by requiring the third party to first make a deposit of 50% of the amount if debt demanded by the secured creditor from its borrower with which third party has nothing to do and further that the second proviso to Section 18, under which only the borrower-appellant is required to make the pre-deposit, cannot override the main section whereunder any aggrieved person including the borrower can file appeal but as far as borrower is concerned there is a requirement of pre-deposit before his appeal is entertained and not in the case of a third party and if that had also been the intention of the law makers it would have been provided in the second proviso that all the persons filing appeal under Section 18 have to make a pre-deposit and not only the borrower. In support of these submissions centering around the interpretation of a 'proviso' to a section Mr. Gupta cited two judgments of the Hon'ble Supreme Court reported in (1997) SCC 353 and Rohitash v. Om Prakash Sharma, VIII (2012) SLT 316 : IV (2012) CLT 325 : (2013) 11 SCC 451. Reliance was also placed on a judgment of High Court of Gujarat reported in I (2015) BC 574 : (2014) Cal LT 460, Satish Tiwari & Another v. The Authorised Officer, SBI, in support of the submission that a third party who is not a borrower is not required to make any pre-deposit before his appeal under Section 18 is entertained. In the written submissions, which were also filed on behalf of the appellant, it was also submitted that the Bank does not have the original title deed in its possession to show that the property in question was actually mortgaged in its favour by the borrower by way of deposit of title deed.
On the other hand, Mr. Rakesh Munjal, learned Senior Counsel for the respondent Bank submitted that this appeal cannot be entertained without the appellant first complying with the mandatory requirement of pre-deposit of 50% of the amount demanded from the borrower by the Bank in its demand notice dated 19.8.2015 which was addressed to the appellant herein also and copy of which notice has been annexed with the memorandum of appeal as Annexure A-4. It was also submitted that the question whether the appellant is a borrower or not can be gone into once appeal is entertained and the same cannot be entertained without pre-deposit. In support of this submission Mr. Rakesh Munjal, learned Senior Counsel for the Bank cited one unreported decision of High Court of Gujarat rendered on 18.10.2011 in Special Civil Application No. 15547 of 2011, Biren Harish Vakharia v. State Bank of India.
After giving my thoughtful consideration to the rival submissions and the record I have come to the conclusion that in the facts and circumstances of his case I need not waste my breath in going into the controversy whether at the stage of consideration of the question of requirement of compliance of Section 18 of SARFAESI Act it can be examined whether the appellant is a borrower or a third party since even without that examination it has to be held that in the present case the appellant cannot have its appeal entertained without making pre-deposit of 50% of the amount claimed by the Bank in its notice under Section 13(2) of SARFAESI Act from its borrower/mortgagor, respondent No. 2 herein, who has chosen not even to enter appearance in the matter where her property is sought to be put to auction by the Bank from which she had taken loan of seven crores. In this case the Securitisation Application under Section 17 was signed by one Mr. Maneet Singh Bhatia, a director of appellant Company, as the authorised person on behalf of the appellant/applicant Company pursuant to a Board resolution and same person has signed the memorandum of appeal also. Mr. Maneet Singh Bhatia admittedly is the attorney of the borrower Ms. Preeti Bansal as well as one of the Directors of the builder Company, appellant herein. If that be so, it becomes evident that this appeal is, in fact, being pursued by none other than the borrower/mortgagor herself and it does not matter that she is doing that through her attorney. She is trying to protect her property mortgaged with the respondent No. 1 Bank by herself remaining in the background and putting in the forefront her attorney in an attempt to avoid compliance of the mandatory requirement of pre-deposit of the debt amount demanded by the secured creditor. This Tribunal can certainly lift the curtain to find out who is the real person in the background litigating before the DRT and once that has been done it has, prima facie, become clear that this litigation is really at the instance of the borrower/mortgagor herself and not by any third party and, therefore, compliance of the second proviso Section 18 of SARFAESI Act by the appellant is must before this appeal is entertained. Since, during the course of arguments no alternative plea was raised for reducing the amount of pre-deposit the appellant is required to make a deposit of 50% of the amount demanded by the Bank in its notice under Section 13(2) of SARFAESI Act which was for a sum of Rs. 740 lakh. Let the appellant make this deposit in the form of a Bank draft in the name of Registrar, DRAT, Delhi and in case deposit is made the money shall be kept in fixed deposit with a nationalised Bank for an initial period of three months. Considering the fact that under the Act the appeals are expected to be decided within six months the appellant shall make the deposit within two weeks.