Vinay Rubbers And Ors. vs Punjab & Sind Bank And Ors.

S.N.H. Zaidi, J

These two identical applications have been moved in both, the appeals for appropriate directions regarding pre deposit in compliance of Section 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the RDDBFI Act). The respondent Bank in its replies has opposed to these applications. The relevant facts, in brief, are that the respondent Bank had filed two applications T.A. No. 81/2002 and R.A. No. 286/2002 under Section 19 of the RDDFFI Act, for the recovery of certain amounts from the appellants herein. The Bank taking recourse to the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the SARFAESI Act) and issuing notices under Section 13(2) of the said Act demanding Rs. 1,79,08,287/- from appellant M/s. Vinay Rubber and Others and Rs. 91,52,198/- from appellant M/s. SB Rubber Pvt. Ltd. and Others, as on 31.3.2005, also took actions under the said Act. Both the aforesaid companies, challenging the actions of the Bank, filed applications S.A. 125/2008 and S.A. 124/2008 under Section 17 of the SARFAESI Act. The learned Tribunal below disposed of all the applications filed by the Bank under the RDDBFI Act as well as by the appellants under the SARFAESI Act by a common judgment dated 19.3.2000 determining the amount of debt due in respect of both the loans at Rs. 55 lacs together with interest @ 10% p.a. on such sum with effect from 10.5.2002 till 31.3.2008 and directed the borrowers to pay Rs. 20 lacs within 10 days and the balance amount within 90 days from the date of receipt of that order. It was also directed that, in case of default of payment, the certificate of recovery (RC) shall be issued for the recovery of the entire determined amount at the contractual rate of interest from the date of filing till the payment in full. The borrower companies did not deposit any amount in compliance of the said order and filed application (R. A. No. 19/2008) on 17.7.2003 for review of the said order. The review application was, however, dismissed by the Tribunal below on 31.12.2010. Feeling aggrieved, the appellants have filed the present appeals challenging the order dated 31.12.2010 as well as the earlier order rendered on 19.3.2008. The delay in filing the appeals against the order dated 19.3.2000 has been condoned by this Tribunal on the condition of deposit of Rs. 75,000/- in each appeal, vide order dated 25.1.2011. This Tribunal also passed a common order on applications for waiver of pre-deposit under Section 21 of the RDDBFI Act on 14.2.2011 and directed the appellants to deposit 50% of the amount demanded in notices under Sections 13(2) of the SARFAESI Act, i.e., Rs. 1,79,08,287/- and Rs. 91,52,198/- for admitting/entertaining the appeals. The appellants did not deposit any amount in compliance of the said order and, instead, filed the instant applications.

I have heard Mr. G.S. Aggarwal for the appellants/applicants and Mr. Satvinder Singh for the respondent Bank and perused the record.

A perusal of the record shows that the aforesaid order dated 14.2.2011 was later kept in abeyance by order dated 1.3.2011 of this Tribunal and, as per agreement of the parties, it was directed that the property bearing No. C-300, Sector-10, Noida would first be sold by the respondent Bank within the given time and if the appellants would produce a better buyer, the said buyer would get the priority and the sale proceeds would be deposited with the Bank and, thereafter, it would be considered whether the order dated 14.2.2011 would prevail or would be modified. It appears that as per the valuation report obtained for the auction sale of the said property, it was found that the said property had been leased out to somebody and although the Bank was allowed to sell the said property, there is nothing on record to show that it was sold as per the direction dated 1.3.2011 of this Tribunal.

The contention of Mr. Aggarwal is that during the pendency of the review application the appellants had deposited Rs. 30 lacs with the respondent Bank by depositing Rs. 10 lacs each on 21.7.2008, 25.10.2008 and 26.4.2010 and a further sum of Rs 1.50 lacs was deposited with the respondent Bank on 8.2.2011 and as such a total sum of Rs. 31.50 lacs has been deposited, which is about 60% of the determined amount of Rs. 55 lacs. It has also been contended by him that if the amount of Rs. 10,12,131/-, which was due to the appellants from the respondent Bank, is also added, then the total amount would be more than 75% of the said amount and as such the provisions of Section 21 of the RDDBFI Act stood fully complied with and the appeals are entitled to be entertained.

The contention of Mr. Satvinder Singh, on the other hand, is that while determining the amount of debt due to the borrowers qua both the loans as Rs. 55 lacs, the learned Tribunal below had also awarded interest @ 10% per annum on such sum w.e.f. 10.5.2002 till 31.3.2008 and directed the borrowers/appellants to pay that amount within the given time schedule with the condition that in case of default the recovery certificate would be issued for the recovery of such amount along with contractual rate of interest from the date of filing (of the applications under the RDDBFI Act) till the payment is made in full. He pointed out that there is no dispute that no amount was paid by the appellants in pursuance of the said order within the given time and the application for the review of that order filed by them had also been dismissed. According to Mr. Singh, the appellants are liable to deposit 75% of the determined amount along with interest at the contractual rate as ordered by the Tribunal below to make its appeal entertainable. I have given my thoughtful consideration to the submissions of the parties' Counsel. By the impugned order dated 19.3.2008, not only the applications filed by the respondent Bank under Section 19 of the RDDBFI Act were disposed of but the applications filed by the appellants under Section 17 of the SARFAESI Act were also decided. This Tribunal had accordingly ordered for the deposit of 50% of the amount claimed by the notices issued under Section 13 (2) of the SARFAESI Act, by order dated 14.2.2011. But since the effect of the said order had been stayed by the order dated 1.3.2011 and the second proviso to Section 18(1) of the SARFAESI Act provides for deposit of 50% of the amount of debt us claimed by the secured creditor or determined by the DRT, whichever is less, and since the amount of debts determined is less than the amount claimed by the respondent Bank through the notices issued under Section 13(2) of the said Act, therefore, the appellants are inquired to deposit 50% of Rs. 55 lacs together with interest as determined by the Tribunal below, vide order dated 19.3.2008, for the entertainment of these appeals and the percentage of pre-deposit is reduced to that extent under the proviso to Section 21(2) of the RDDBFI Act. Any deposit made by the appellants subsequent to that order shall be adjusted towards the payment of pre deposit. Since some payments have already been made, therefore, the appellants to deposit the remainder of the amount in accordance with the above order, if any, with the Bank within three weeks from today. In case the amount is not deposited as directed, the appeal shall not be entertained and shall be dismissed.

The applications are disposed of accordingly.

List the matter on 12.6.2012 for further orders.