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2014 DIGILAW 1068 (CAL)

Bhutoria Dealers Pvt. Ltd. v. Allahabad Bank

2014-11-14

HARISH TANDON

body2014
JUDGMENT : Harish Tandon, J. The sole point involved in this revisional application is whether an appeal filed by a person aggrieved by an order passed by the Debt Recovery Tribunal who is neither a borrower nor a guarantor nor a person from whom that the amount of debt is due, is liable to pay the fees prescribed under Rule 8 (2) of the Debt Recovery Appellate Tribunal (Procedural) Rules, 1994. 2. For the purpose of addressing the issues as indicated above, it is not necessary to record the facts of the proceeding before the Debt Recovery Tribunal extensively. It would be suffice for the present purpose to say that the Bank agreed to sale the mortgage property to the petitioner at a sum of Rs. 47 lakhs. The petitioner moved an application before the Tribunal seeking his addition as well as the execution of the conveyance in its favour. On the date of the hearing of the said application, the petitioner tendered an amount equivalent to 10% of the offer and undertook to pay the balance sum at the time of execution of the deed of conveyance. Subsequently another application was filed for confirmation of the sale and the sale to be affected by the receiver to be appointed by the Tribunal. From time to time, applications are being taken out with the prime intent to get the sale confirmed at the said consideration price and execution of the deed in favour of the petitioner. Several orders came to be passed wherefrom it would appear that some of the applications are pending. 3. Amidst pendency of those applications, a compromise was effected which was accepted by the Tribunal. After coming to know that the compromise is effected between the original parties, the petitioner filed an application and upon dismissal thereof filed an appeal before the Debt Recovery Appellate Tribunal. In the said appeal, an application for waiver of the pre-deposit has been allowed and the petitioner seeks to waive the requisite fees required to be paid on an appeal filed under Section 20 of the Debt Recovery Tribunal Act. The order of rejection of the said application is challenged in the present revision application. 4. In the said appeal, an application for waiver of the pre-deposit has been allowed and the petitioner seeks to waive the requisite fees required to be paid on an appeal filed under Section 20 of the Debt Recovery Tribunal Act. The order of rejection of the said application is challenged in the present revision application. 4. The learned Advocate appearing for the petitioner submits that the petitioner is neither a borrower nor a guarantor and, therefore, no debt is due so as to attract the fees to be paid under Rule 8 (2) of the Debt Recovery Appellate Tribunal (Procedural) Rules, 1994. He submits that though the petitioner is a person aggrieved by an order of the Tribunal and enjoins the right to prefer an appeal under Section 20 of the Debt Recovery Tribunal Act, he is not obliged to pay the fees as prescribed in the said Appellate Tribunal Rules as no debt is due from him. 5. The opposite party including the Bank submits that the Appellate Tribunal Rules provides the fees on the legally recoverable debt and such fees is required to be deposited even an appeal is taken out other than the borrower or guarantor. According to them, there is no distinction made in an appeal under Section 20 of the Debt Recovery Tribunal Act and, therefore, the petitioner cannot enjoy the immunity from paying the requisite fees prescribed therefor. 6. It is indisputable that Rule 8 of the Appellate Tribunal Rules prescribed a fee on the basis of the amount due which can be clearly ascertained from the extract therefrom which reads thus: "8. Fee.-(1) Every memorandum of appeal under Section 20 of the Act shall be accompanied with a fee provided in sub-rule (2) and such fee may be remitted either in the form of crossed demand draft drawn on a nationalised bank in favour of the Registrar and payable at the station where the Registrars officer is situated or remitted through a crossed Indian Postal Order drawn in favour of the Registrar and payable in Central Post Office of the station where the Appellate Tribunal is located. (2) The amount of fee payable in respect of appeal under Section 20 shall be as follows:- Amount of debt due Amount of fees payable 1. Less than Rs. 10 lakhs Rs. 12,000 2. Rs. 10 lakhs or more but less than Rs. 30 lakhs Rs. (2) The amount of fee payable in respect of appeal under Section 20 shall be as follows:- Amount of debt due Amount of fees payable 1. Less than Rs. 10 lakhs Rs. 12,000 2. Rs. 10 lakhs or more but less than Rs. 30 lakhs Rs. 20,000 3. Rs. 30 lakhs or more Rs. 30,000 7. Section 20 of the Debt Recovery Tribunal Act bestowed the right of appeal on any person aggrieved by an order made by the Tribunal. The said provision does not make a distinction between an order adjudicating the debt finally or in preliminary form but imbibe within itself all orders including the interlocutory orders capable of being assailed before the DRAT. 8. Section 21 of the Debt Recovery Tribunal Act requires the deposit of 75% of the amount of debt so due from any person as determined by the Tribunal under Section 19 thereof. The Debt has been defined in Section 2 (g) of the said Act to mean any liability (inclusive of interest) claimed as due from any person by a bank or financial institution and legally recoverable on the date of the application. The expression "any person from whom the amount of financial debt is due to a bank or financial institution", is a significant expressions to mean the person from whom such debt is legally recoverable by the bank or financial institution. For the purpose of depositing of an amount in an appeal preferred by such person, a determination of the debt so due under Section 19 is sine qua non. The determination of the debt is a word of importance and Section 21 of the Act can be pressed upon the determination of the debt due to the bank by a person. Section 20 of the Act is not controlled by Section 21 in all conceivable eventualities. If a debt of a person is adjudicated by the Tribunal, an appeal filed by the said person is obligated to comply the provision of Section 21. Since Section 20 is not restricted to an appeal only against an order adjudicating and/or determining the debt due from a person as the appeal can also be filed against an interlocutory orders or orders passed in a miscellaneous application which does not determine the debt due to the bank. Since Section 20 is not restricted to an appeal only against an order adjudicating and/or determining the debt due from a person as the appeal can also be filed against an interlocutory orders or orders passed in a miscellaneous application which does not determine the debt due to the bank. An order seeking for addition as a party in a proceeding before the Tribunal or an application seeking to cross-examine the witness or to recall the witness are amenable to be challenged under Section 20 when, in fact, the debt is not crystallized and/or adjudicated. Rule 8 (2) of the Appellate Rules requires the deposit of fees on the amount of debt due. 9. The reliance can be made to a judgment of the Co-ordinate Bench in case of Sajeda Khatoon v. Bank of India & Ors; reported in (2012) 4 CLT 409 (HC) where a point arose as to whether an appeal preferred by a third party against whom, no claim is made by a bank or the institution is obliged to make a pre-deposit under Section 21 of the Act. The Court held that right of an appeal emanates from the statute which is required to be construed contextually and the words which have been omitted and did not find place in the statute should not be added so as to bring a person within the ambit of the provisions of the statute in these words: "28. The purposive construction cannot be applied in view of clear language in Section 20 & 21 of the DRT Act. Moreover, the right of appeal is a valuable right and it is a duty of the Court to preserve the right to prefer appeal. Each word in an enactment must play its own role. The right to prefer an appeal by a third party should be construed with respect to the context and other provisions of the Act. The right of appeal has been recognised by judicial decisions as right which vests in a suitor at the time of institution of the original proceeding. The right to prefer an appeal by a third party is also recognised under the Act. The right of appeal has been recognised by judicial decisions as right which vests in a suitor at the time of institution of the original proceeding. The right to prefer an appeal by a third party is also recognised under the Act. Such right to prefer an appeal by a third party is not conditional upon a pre-deposit as distinguished and opposed to an obligation created against the certificate debtor and imposing any such condition would result in curtailment of such right of a third party without an express provision contained in the statute. Such a provision in the statute must be expressed." 10. In an unreported judgment rendered in case of Sutapa Chatterjee & another v. UCO Bank & Ors; reported in (C.O. 4051 of 2012) decided on March 12, 2013, the Co-ordinate Bench took note of the description in the first column embodied in Rule 8 (2) of the Appellate Tribunal Procedural Rules and held that since no amount of debt is adjudicated to be due from a person appealing against an interlocutory order of the Tribunal, the fees prescribed in Rule 8 (2) is not applicable in the followings: "If there is a practise in vogue in the appellate tribunal of requiring pre-deposits to be made in terms of Section 21 of the Act in case of appeals filed by persons who have not been adjudged to be indebted to a bank or the like, it may owe its birth to an erroneous description in the first column of the chart that forms a part of Rule 8 (2) of the Debts Recovery Appellate Tribunal (Procedure) Rules, 1994. Sub-rule (2) of Rule 8 quantifies the amounts of fee payable in respect of appeals under Section 20 of the Act. The chart in the sub-rule has to columns entitled "Amount of debt due" and "Amount of fees payable." The more appropriate description of the first column would have been "Amount of debt claimed to be due or amount of debt due" rather than what appears now. It is elementary, however, that the rules prescribed by a subordinate legislation cannot be in excess or in derogation of the statute under which it is made. For one, if the power to make the rules is delegated by the legislature to the executive, the rules need to conform to the statute. It is elementary, however, that the rules prescribed by a subordinate legislation cannot be in excess or in derogation of the statute under which it is made. For one, if the power to make the rules is delegated by the legislature to the executive, the rules need to conform to the statute. More fundamentally, neither the rules made under a statute nor the authority to make the rules can impinge on any right conferred by the relevant statute. Section 36 of the said Act of 1993 empowered the Central Government to make rules "to carry out the provisions of this Act". The specific areas enumerated in Section 36 (2) include " the form in which an appeal may be filed before the Appellate Tribunal under Section 20 and the fees payable in respect of such appeal" under clause (d) of the sub-section. In specifying the fees payable for filing appeals under Section 20 of the Act, the Central Government could not have implied in Rule 8 (2) of the said Rules that only an appeal from a final order (or a partial final order in the sense of the order finally dealing with a part of the claim) may be maintained as the erroneous heading of the first column of the chart forming a part thereof now suggests. In the present case, the appeal sought to be preferred by the petitioners was against an order of the relevant Debts Recovery Tribunal disallowing the petitioners plea for cross-examining the banks witness. As at the time of referring the appeal, no amount of debt was adjudged to be due from the petitioners or either of them to the bank under Section 19 of the Act. In neither petitioner being a person from whom any amount of debt was determined by the relevant Debts Recovery Tribunal to be due under section 19 of the Act, the Appellate Tribunal could not have imposed the onerous condition of the appellants or either of them being required to make a pre-deposit for the proposed appeal to be entertained." 11. In view of the law as enunciated above, since the appeal filed by the petitioner is against an interlocutory order when admittedly the petitioner is not a certificate debtor, the order of the Appellate Tribunal in directing the fee prescribed under Rule 8 (2) of the Appellate Tribunal Rules is not sustainable. 12. In view of the law as enunciated above, since the appeal filed by the petitioner is against an interlocutory order when admittedly the petitioner is not a certificate debtor, the order of the Appellate Tribunal in directing the fee prescribed under Rule 8 (2) of the Appellate Tribunal Rules is not sustainable. 12. The order impugned is thus set aside. 13. The Appellate Tribunal is directed to treat the appeal in form and shall proceed to decide the same with utmost expedition on merit. 14. The revisional application succeeds. 15. However, there shall be no order as to costs. 16. Urgent photostat certified copy of this order, if applied for, be given to the parties on priority basis. Petition allowed.