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Judgment
V.V.S. Rao
The second respondent, a partnership firm, borrowed credit facilities - hypothecation loan, pledge loan and lien loan; from the first respondent. The petitioner is guarantor. The loan advanced became non-performing asset due to defaults committed by the principal borrower. Therefore, the first respondent initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI Act). After issuing the demand notice u/s 13(2) of the SARFAESI Act, possession notice u/s 13(4) of the SARFAESI Act was issued to the petitioner. He then filed an appeal/.application u/s 17(1) of the SARFAESI Act before the Debts Recovery Tribunal, Visakhapatnam (the DRT) on 08.7.2004. The DRT returned the appeal on 09.7.2004 advising the petitioner to pay the court fee of Rs. 1,50,000/- as per the notification of Government of India in department of Economic Affairs being S.O. 466(E), dated 06.4.2004. Aggrieved by the same, the petitioner filed instant writ petition inter alia seeking a direction to the DRT. to register the appeal without insisting payment of the court fee. This Court issued notice on 08.9.2004. While doing so, the DRT was directed to entertain the appeal without insisting payment of court fee and hear the appeal.
During the course of the submissions, the Counsel for the first respondent bank brought to our notice Rule 13 of the Security Interest (Enforcement) Rules, 2002 as amended (inserted) by the notification being S.O, 103(E), dated 02.2.2007 with effect from 02.2.2007. The same reads as under.
Fees for applications and appeals under sections 17 and 18 of the Act.- (1) Every application under sub-section (1) of section 17 or an appeal to the Appellate Tribunal under sub-section (1) of section 18 shall be accompanied by a fee provided in the sub-rule (2) and such fee may be remitted through a crossed demand draft drawn on a bank or Indian Postal Order in favour of the Registrar of the Tribunal or the Court as the case may be, payable at the place where the Tribunal or the Court is situated.
(2) The amount of fee payable shall be as follows:--
No.
Nature of application
Amount of fee payable
1.
Application to a Debt Recovery Tribunal under sub-section (1) of section 17 against any of the measures referred to in sub-section (4) of section 13
(a)
Where the applicant is a borrower and the amount of debt due is less than Rs. 10 lakhs
Rs. 500 for every Rs. 1 lakh or part thereof
(b)
Where the applicant is a borrower and the amount of debt due is Rs. 10 lakhs and above
Rs. 5000 + Rs. 250 for every Rs. 1 lakh or part thereof in excess of Rs. 10 lakhs subject to a maximum of Rs. 1,00,000
(c)
Where the applicant: is an aggrieved party other than the borrower and where the amount of debt due is less than Rs. 10 lakhs and above
Rs. 125 '' for every rupees One lakh or part thereof
(d)
Where the applicant is an aggrieved party other than the borrower and where the amount of debt due is Rs. 10 lakhs and above
Rs. 1250 + Rs. 125 for every Rs. 1 lakh or part thereof in excess of Rs. 10 lakhs subject to a maximum of Rs. 50,000
(e)
Any other application by any person
Rs. 200
2.
Appeal to the Appellate Authority against any order passed by the Debt Recovery Tribunal u/s 17
Same fees as provided at clauses (a) to (e) of Serial Number 1 of this rule.
The petitioner presented appeal on 08.7.2004. At the relevant time, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest. (Removal of Difficulties) Order, 2004 vide S.O. 466(E), dated 06.4.2004 governed, the question of payment of court fee for availing the remedy u/s 17 of the SARFAESI Act. Rule 3 of the 2004 Order deals, with the quantum of fee payable for filing an appeal before the DRT. It reads as follows.
Fee for filing of an appeal of Debts Recovery Tribunal.-- The fee for filing of an appeal to the Debts Recovery Tribunal under sub-section (1) of section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, shall be mutatis mutandis as provided for filing an application to the Debts Recovery Tribunal under rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993.
Thus the fee payable on every application u/s 19(1) or 19(2) of the SARFAESI Act is stipulated under Rule 7(2) of the Debts Recovery Tribunal (Procedure) Rules, 1993 would apply to the extent relevant. Sub-rules (1) and (2) of Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993 read as under.
Application Fee.--(1) Every Application u/s 19(1), or section 19(2), or section 19(8), or section 30(1) of the Act, or interlocutory application or application for review of decision of the Tribunal shall be accompanied by a fee provided in the sub-rule (2) and such fee may be remitted through a crossed Bank Demand Draft drawn on a bank or Indian Postal Order in favour of the Registrar of the Tribunal and payable at the place where the Tribunal is situated. 2) The amount of fee payable shall be as follows:-______________
Sl.
No.
Nature of application
Amount of fee payable
1.
Application for recovery of debts due u/s 19(1) or section 19(2) of the Act
(a) Where amount of debt due is Rs. 10 lakhs
(b) Where the amount of debt due is above Rs. 10 lakh
Rs. 12,000
Rs. 12,000 plus Rs. 1,000 for every one lakh rupees of debt due or part thereof in excess of Rs. 10 lakhs, subject to a maximum of Rs. 1,50,000
2.
Application to counter claim u/s 19(8) of the Act
(a) Where amount of claim made is upto Rs. 10 lakhs
(b) Where the amount of claim made is above Rs. 10 lakh
Rs. 12,000
Rs. 12,000 plus Rs. 1,000 for every one lakh rupees of debt due or part thereof in excess of Rs. 10 lakhs, subject to a maximum of Rs. 1,50,000
3 to 6 are omitted as not relevant
In view of the notification S.O.466(E) and Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, the action of the DRT in returning the appeal/application filed by the petitioner for want of payment of court fee of Rs. 1,50,000/- is unassailable. The writ petition is misconceived and is, accordingly, dismissed.