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2014 DIGILAW 592 (KAR)

Kirloskar Electric Company Limited v. IDBI Bank Limited

2014-06-18

D.H.WAGHELA, H.G.RAMESH

body2014
ORDER D.H. Waghela, J. 1. The petitioner has invoked Articles 226 and 227 of the Constitution of India with a prayer that the order dated 18-12-2013 at Annexure-H of the Debts Recovery Appellate Tribunal at Chennai in A.I.R. No. 408 of 2010 may be set aside and to consequently direct the said Tribunal to hear the appeal of the petitioner without pre-deposit of any amount. The impugned order dated 18-12-2013 of the Debts Recovery Appellate Tribunal at Chennai is made on Interim Application No. 891 of 2010 with the operative part reading as under: "The petitioner is directed to deposit a sum of Rs. 1,02,80,108/- into this Tribunal on or before 28-2-2014. In the event the said deposit is not made into this Tribunal on or before 28-2-2014 this IA shall stand automatically dismissed". The above order is made after taking into account the express proviso of Section 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, ('The RDDB and FI Act', for short) and in fact, inspite of recovery certificate having been issued by the Debts Recovery Tribunal of competent jurisdiction for recovery of a sum of Rs. 2,05,60,216/-, the Debts Recovery Appellate Tribunal has exercised its jurisdiction to reduce by 25% the amount of pre-deposit. Thus, the application of the petitioner before the Debts Recovery Appellate Tribunal, pending the main appeal, has been partly allowed in favour of the petitioner. Learned Counsel, Mr. K.V. Satish, appearing for the petitioner vehemently argued that while exercising the jurisdiction, learned Debts Recovery Appellate Authority has ignored important facts and contentions of the petitioner, insofar as the amount mentioned in the recovery certificate was not and could not be termed as debt. He further submitted that there were many other grounds to be argued in the proceeding before the Debts Recovery Appellate Authority and the Debts Recovery Appellate Authority was required to fully waive the condition of pre-deposit. 2. It was apparent from the arguments of learned Counsel that the petitioner proposes to rely upon several contentions which could be argued in appeal pending before the Debts Recovery Appellate Authority as and when the appeal were to be entertained and heard. 2. It was apparent from the arguments of learned Counsel that the petitioner proposes to rely upon several contentions which could be argued in appeal pending before the Debts Recovery Appellate Authority as and when the appeal were to be entertained and heard. As against that, the injunction contained in the express proviso to Section 21 of the RDDB and FI Act states that an appeal preferred by any person from whom the debt is due shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal 75% of the amount of debt due from him as determined by the Tribunal under Section 19. Therefore, before the appeal is entertained and heard, the amount determined to be due by the Tribunal has to be taken at its face value and no arguments which can be advanced in the main appeal can be considered, as such a process would amount to entertaining the appeal itself before the condition precedent being satisfied. It is only as a matter of exception that the proviso empowers the Appellate Tribunal to waive or reduce the amount to be deposited with a condition that in case of exercise of such power, the Appellate Tribunal has to record reasons. In the facts of the present case, as discussed earlier, no reasons to further reduce the amount of pre-deposit have been made out, except the arguments which could be heard and considered only after the appeal is entertained. Even otherwise, no ground is made out to exercise the extraordinary jurisdiction of this Court under Articles 226 and 227 of the Constitution to interfere with an interim discretionary order made by the Debts Recovery Appellate Tribunal in exercise of its discretionary powers under Section 21 of the RDDB and FI Act. Accordingly, the petition is dismissed in limine.