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Judgment
S.N.H. Zaidi, J
The instant application (M.A. 549/ 2011), under Section 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the Act), has been filed by the appellants for complete waiver of the amount required to be deposited for entertaining the accompanying appeal. It appears that respondent Bank had filed application (OA 209/1997) against the deceased predecessor of defendants/appellants 1(a) to 1(c), defendants/ appellants 2 to 5 and defendants/respondents 2 to 5 under Section 19 of the Act, for the recovery of Rs. 1,21,85,258.75 claiming due as on 21.3.1997 with interest and cost, stating that the Bank had sanctioned certain credit facilities to respondent 2, a proprietary firm of respondent 3, who executed security documents, respondents 4 and 5 stood personal surety and guarantee and a partnership firm, namely, M/s. Ajit Bros., created equitable mortgage of its property bearing Block No. A-8/2, Wazirpur Industrial Area, New Delhi, through its partners and respondent 4 equitably mortgaged her property bearing No. H-24, Shivaji Park, Village Madipur. Delhi as collateral securities for the repayment of the outstanding dues of the Bank and the claimed amount became due on the defendants who did not pay the same despite repeated requests, demand and legal notice. The defendants contested the claim and the learned Presiding Officer of DRT-11 Delhi after hearing the parties, by the impugned order dated 5.4.2011, allowed the OA for the entire claimed amount of Rs. 1.21,85.258.75 together with pendente lite and future simple interest @ 15.75% p.a. from the date of filing of the OA till its actual realisation, made the defendants jointly and severally liable for payment of the said amount and directed them to pay the said amount within a period of 90 days. Feeling aggrieved with that order, defendants 5(a) to 5(c) and defendants 6 to 9 have filed the appeal before this Tribunal with the application as mentioned above.
The respondent Bank has opposed the waiver of the pre-deposit and has filed a reply to the aforesaid application.
I have heard Mr. Rajeeve Mehra, learned Senior Advocate with Mr. Aditya Malhotra for the appellants/applicants and Mr. Vipin Pillai for the respondent Bank and perused the record.
Section 21 of the Act provides as under:
21 Deposit of amount of debt due, on filing appeal--Where an appeal is preferred by any person from whom the amount of financial debt is due to a Bank or a financial institution or a consortium of Banks and financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal seventy-five per cent of the amount of debt so due from him as determined by the Tribunal under Section 19:
Provided that the Appellate Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section.
A perusal of the above provision shows that 75% of the amount determined by the Tribunal under Section 19 has to be deposited as a pre condition for entertaining the appeal. However, the proviso to the section states that the Appellate Tribunal may, for reasons to be recorded in writing, waive or reduce the said amount.
It is now a settled proposition of law that the right of appeal is neither an absolute right nor an ingredient of natural justice the principle of which must be followed in all judicial and quasi-judicial adjudication and the right of appeal is a statutory right and it can be circumscribed by the conditions in the grant. (Vijay Prakash D. Mehta v. Controller of Customs (Preventive), 1968 (4) SCC 402, Anant Mills Ltd, v. State of Gujarat, IV (2009) BC 43=1975(2) SCC 175).
In Harjit Singh Sohal & Anr. v. Indian Bank, Mumbai, 2009(2) Mh.L.J. 187, the Bombay High Court has observed that the object of Section 21 of the Act apparently is to ensure the deposit of debt due from the appellant in case he seeks to file an appeal against the order made by a Tribunal under the Act. All that this section seeks to do is to regulate the exercise of the right of appeal which is conferred upon a person, who is aggrieved by the order of the Tribunal directing the recovery of the debt due, and at the same time to protect the right of the Banks to have speedy of the debt and also to prevent the delay in effecting their recovery.
Mr. Mehra arguing at great length dwelt upon the facts and circumstances of the case in detail, pointed out the evidence on record and assailed the impugned order on merits. In the waiver application also the appellants, extensively assailing the impugned order on merit, have said in the end that they do not possess any financial wherewithal to deposit any amount towards the requirement of Section 21. It has also been said that in view of the peculiar facts and circumstances of the case it would be harsh and onerous to direct the appellants to make any deposit for entertaining the appeal and if the appellants are called upon to liquidate their savings to meet the requirement of pre-deposit, it would make them penny less. It has further been said that appellants 1 (a) to (c) and 3 to 5 have only inherited the undivided rights of their predecessors in Wazirpur property whereas appellant No. 2, who is an infirm and old person of 80 years of age, does not possess any wealth to make any pre-deposit and, as a partner of the said firm, he too has only an undivided share in the said property.
Learned Counsel for the respondent Bank, on the other hand, submitted that all the pleas raised by the appellants are on merit of the case which cannot be considered at this stage. It has been pointed out that the amount of debt due has now increased to Rs. 3,85,73,960.00 as on 31.12.2011 on adding interest to the decretal amount at the awarded rate from the date of filing of OA, i.e., 21.3.1997. It has also been pointed out that the appellants have not produced any evidence in support of their claim of waiver.
I am in agreement with the respondent's Counsel that at the initial stage of hearing on waiver application for entertaining the appeal, it would not be proper to express any opinion on the merit of the appeal. The pleas raised by Mr Mehra relating to the facts and circumstances of the case as well as in respect of the impugned order are relevant for the purposes of consideration on admission or deciding the appeal after it is entertained as per provisions of the Act, but not for consideration on waiver application. Any expression of opinion on merit of the case at this stage may prejudicially affect the interest of any party in appeal.
So far as the question of waiver or reduction of the amount required to be deposited for the entertainment of the appeal, under Section 21 of the Act, is concerned, mere averment in the application that the appellants do not possess sufficient financial resources or means to deposit the required amount is not sufficient as despite there being seven appellants, nothing has been placed by them before this Tribunal to show that why they cannot deposit the required amount of pre-deposit. There is nothing on record to show as to what callings/business the appellants are engaged in and what is their income or sources of income. No document relating to any property owned by any of them has also been filed. Infirmity and old age of one appellant out of many may be a circumstance relevant for reducing the amount of pre-deposit if it is found that he does not possess any asset or has no financial resource to meet the requirement of section 21 of the Act, but as stated earlier, since no evidence has been produced by the appellants in support of their waiver application, therefore, there appears to be no sufficient ground for reducing the amount of pre-deposit.
In the light of the foregoing discussion. I am of the view that the appellants have failed to make out any case either for complete waiver or reduction of the amount required to be deposited for entertaining the appeal under Section 21 of the Act. The application is, therefore, liable to be and is accordingly dismissed.
The amount of debt due to the appellants, as determined by the DRT, is Rs. 1,21,85,25875, therefore, 75% of the said amount comes to Rs. 91,38,943.50. The appellants are directed to deposit Rs. 90 lacs, out of which Rs. 30 lacs will be deposited within 30 days from the date of this order and the balance amount of Rs. 60 lacs will be deposited within the next two months with the Registrar of this Tribunal, failing which the appeal shall not be entertained.
As and when the aforesaid amount is deposited, it shall be invested in Fixed Deposit in the name of the Registrar, DRAT, Delhi, with the respondent Bank initially for a period of 13 months and thereafter it will be renewed from time-to-time as the situation warrants.
List on 17.2.2012 for further orders. A copy of the order be given to the parties as per law.