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2015 DIGILAW 938 (CAL)

Madhav Goenka v. Allahabad Bank

2015-12-02

HARISH TANDON

body2015
JUDGMENT : Harish Tandon, J. Challenge is made to an order dated 3rd December, 2014 passed by the Debt Recovery Appellate Tribunal at Kolkata in Appeal No. 176 of 2012 by which an application for stay being Application No. 366 of 2012 is disposed of directing the petitioner to deposit a sum of Rs. 1 Crore as condition for such stay. 2. The opposite party-bank filed an application under Section 19 of the Recoveries of Debt Due to Banks and Financial Institution Act, 1993 before the Debt Recovery Tribunal to recover a sum of Rs. 13 Crores and odd together with the interest against the petitioners. In the written objection filed to the said application, the petitioners took the specific defence on maintainability of the said proceeding on the ground of limitation. 3. According to the petitioner, in view of the specific pleadings made in the said application by the opposite party-bank that the cause of action arose on 31.3.1995, the initiation of the said proceeding in the year 2006 is palpably barred by limitation. Both the parties filed the written notes of argument before the Debt Recovery Tribunal who by the judgment dated 10th July, 2012 allowed the said application negativing the plea of limitation. 4. The petitioner challenged the said order before the Debt Recovery Appellate Tribunal, Kolkata in Appeal No. 176 of 2012. In the said appeal, an application for waiver of the pre-condition deposit under Section 21 of the said Act was taken out. By the impugned order, the Appellate Court disposed of the said application directing the petitioner to deposit a sum of Rs. 1 crore which shall be kept in an interest bearing fixed deposit. The learned Advocate for the petitioner submits that the Appellate Tribunal ought to have waived the pre-condition deposit in its entirety in view of the fact that the claim of the bank is apparently barred by law of limitation. It is further submitted that since the right to recover the debt from the principal borrower ceases to exist being barred by limitation, it automatically absolves the guarantor from such liability. 5. There is no dispute that right to file an appeal against an order of the Debt Recovery Tribunal is provided under Section 20 of the said Act. It is further submitted that since the right to recover the debt from the principal borrower ceases to exist being barred by limitation, it automatically absolves the guarantor from such liability. 5. There is no dispute that right to file an appeal against an order of the Debt Recovery Tribunal is provided under Section 20 of the said Act. Section 21 mandates for pre-deposit to the extent of 75 per cent of the amount determined by the Debt Recovery Tribunal as conditioned precedent for entertaining the appeal. The power to waive the condition for pre-deposit is vested upon the Appellate Tribunal which should be exercised in the attending facts and circumstances. The discretion vested upon the Appellate Tribunal should be exercised judicially and not capriciously or whimsically. The discretionary order based on logic and upon consideration of the material facts available on record should not be readily interfered with by a higher forum. The higher forum should be reluctant to interfere with the discretion exercised by the Trial Court unless the Sub-ordinate Court/Forum has not given proper weightage to the consideration required in determining the relief to be granted. 6. The findings recorded by the Sub-ordinate Forum is based on proper appreciation of the materials and discussion in details by providing reasons, the reversal of an order may not be justified. It is only when there is a misreading of the important and material facts on record and mis-appreciation of the same may invite the Higher Forum to interfere with the discretionary order. 7. In the instant case, the Appellate Tribunal categorically observed that from the Income Tax Return pertaining to the Assessment Year 2013-2014, it is apparent that the petitioner, have an insignificant income but it does not absolve him from the condition of pre-deposit in its entirety. Admittedly the Debt Recovery Tribunal have held the petitioner responsible for payment of Rs. 13 Crores and odd and its open to the Appellate Court to decide whether such claim can be legally sustained on the anvil of limitation. Though the statute mandates the deposit of 75 per cent of the amount determined by the Debt Recovery Tribunal but the said condition can be relaxed and/or waived by the Appellate Tribunal on various factors including the financial position and the assets in the hands of a judgment-debtor. Though the statute mandates the deposit of 75 per cent of the amount determined by the Debt Recovery Tribunal but the said condition can be relaxed and/or waived by the Appellate Tribunal on various factors including the financial position and the assets in the hands of a judgment-debtor. The Appellate Court shall also take into account the interest of the decree-holder who emerged successfully from one tier of the adjudicatory system and its deprivation to realize the said amount. The Appellate Court noticed the financial condition of the petitioners and have also taken into account the interest of the Financial Institution and have balanced their respective rights by waiving the major portion of the amount determined by the Debt Recovery Tribunal and directed the sum of Rs. 1 Crore to be deposited. Such discretion exercised by the Appellate Tribunal cannot be said to be irrational, illegal and beyond the legal parameters. 8. The learned Advocate for the petitioner tried to impress this Court that they have fair chance of success in the appeal by placing several paragraphs from the original application filed by the opposite party-bank. The appeal is pending before the Appellate Tribunal who shall definitely consider all such pleas at the time of final hearing. A good prima facie case may be one of the factors to exercise the power to waive the condition of pre-deposit but once the Appellate Tribunal exercised such discretion considering the same, such discretionary order, in my opinion, does not require any interference in exercise of power under Article 227 of the Constitution. 9. This Court, therefore, does not find any grounds warranting interference in the impugned order. 10. The revisional application fails. 11. However, there shall be no order as to costs.