SPECTRUM CONSULTANTS INDIA PRIVATE LIMITED v. PRIDHVI ASSET RECONSTRUCTION
2020-03-24
B.V.NAGARATHNA, PRADEEP SINGH YERUR
body2020
DigiLaw.ai
ORDER : Heard learned counsel for the petitioner. Issue notice to the respondent. Sri.Y.P.Gokul, learned counsel is present in Court and accepts notice for the respondent. 2. Though this petition is listed for preliminary hearing, with consent of learned counsel on both sides, it is heard finally. 3. The petitioner herein has filed an appeal before the Debts Recovery Appellate Tribunal at Chennai (‘Appellate Tribunal’ for short) being aggrieved by order dated 28.02.2020 bearing No.AIR (SA) 352/2019 passed by the Debts Recovery Tribunal at Bengaluru. 4. It is the case of the petitioner that in the said appeal, the Court fee has been paid in accordance with Rule 13(2)(d) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as ‘the Rules’ for the sake of brevity). It is stated that the petitioner is a tenant of the borrower and being aggrieved by the measures initiated by the respondent, the petitioner herein initially approached the Debts Recovery Tribunal at Bengaluru under Section 17(4A) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’ for the sake of convenience). That by final order dated 23.09.2019, Debts Recovery Tribunal1 at Bengaluru dismissed IR No.2294/2017 filed by the petitioner herein. Being aggrieved, petitioner herein has preferred the aforesaid appeal before the Appellate Tribunal at Chennai. According to the petitioner, the appropriate Court Fee as stipulated in Rule 13 of the Rules, has been paid. However, by the impugned order dated 28.02.2020, the Tribunal has stated that the appellant has stepped into the shoes of the borrower and therefore, he is liable to pay the court fee as that of the borrower. Being aggrieved by that order, this writ petition has been preferred. 5. We have heard learned counsel for the petitioner and learned counsel for the respondent. 6. During the course of submissions, petitioner’s counsel pointed out to Rule 13 of the Rules and contended that the petitioner herein is a tenant of the borrower and not the borrower. That in terms of Section 17(4A) of the SARFAESI Act, the petitioner as the tenant had approached the Debts Recovery Tribunal at Bengaluru, however, the petitioner being unsuccessful before the said Tribunal, has preferred the appeal.
That in terms of Section 17(4A) of the SARFAESI Act, the petitioner as the tenant had approached the Debts Recovery Tribunal at Bengaluru, however, the petitioner being unsuccessful before the said Tribunal, has preferred the appeal. That, by no stretch of imagination, the petitioner could be construed to be a borrower when the petitioner is a tenant of the borrower in the secured asset and that there is a lease deed executed between the borrower and the petitioner. Therefore, the court fee paid by the petitioner is in accordance with Rule 13 of the Rules. He, therefore, submitted that the Tribunal was not right in holding that the petitioner had stepped into the shoes of the borrower and therefore, had to pay the court fee as a borrower in the appeal. He submitted that the impugned order may be set aside and the court fee paid by the petitioner may be accepted. 7. Percontra, learned counsel for the respondent contended that the petitioner is claiming a right under the borrower and therefore, he should be construed to be a borrower and that the impugned order is justified and there is no merit in the writ petition. 8. Having heard learned counsel for the petitioner, at the first instance, we have examined the definition of the expression ‘borrower’in section 2(f) of the SARFAESI Act. The same reads as under: “2. Definitions (1) In this Act, unless the context otherwise requires. x x x (f) "borrower" means any person who has been granted financial assistance by any bank or financial institution or who has given any guarantee or created any mortgage or pledge as security for the financial assistance granted by any bank or financial institution and includes a person who becomes borrower of a securitisation company or reconstruction company consequent upon acquisition by it of any rights or interest of any bank or financial institution in relation to such financial assistance or who has raised funds through issue of debt securities;” 9. On a reading of the same, we hold that a lessee of a borrower cannot be construed to be a borrower and he also does not fall within the definition of borrower. That apart, it is relevant to note that Section 17 of the said Act has itself made a distinction with regard to a tenant seeking a remedy under the said Section.
That apart, it is relevant to note that Section 17 of the said Act has itself made a distinction with regard to a tenant seeking a remedy under the said Section. Section 17(4A) of the SARFAESI Act clearly contemplates the remedies that are available to a person who claims any tenancy or leaseholds rights upon the secured assets, who can approach the Debts Recovery Tribunal for adjudication of his claims under the said tenancy or leasehold rights. Section 17(4A) of the SARFAESI Act reads as under: “17. Application against measures to recover secured debts.— (1) x x x (4A) Where— (i) any person, in an application under subsection (1), claims any tenancy or leasehold rights upon the secured asset, the Debt Recovery Tribunal, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security interest, have the jurisdiction to examine whether lease or tenancy,— (a) as expired or stood determined; or (b) is contrary to section 65A of the Transfer of Property Act, 1882(4 of 1882); or (c) is contrary to terms of mortgage; or (d) is created after the issuance of notice of default and demand by the Bank under subsection (2) of section 13 of the Act; and (ii) the Debt Recovery Tribunal is satisfied that tenancy right or leasehold rights claimed in secured asset falls under the subclause (a) or subclause (b) or subclause (c) or subclause (d) of clause (i), then notwithstanding anything to the contrary contained in any other law for the time being in force, the Debt Recovery Tribunal may pass such order as it deems fit in accordance with the provisions of this Act.” 10. Therefore, Rule 13(1) of the Rules has accordingly noted the said aspect of the matter and has stated that where an applicant is an aggrieved party other than the borrower and where the amount of debt due is Rs.10 lakhs and above, then the stipulated court fee would have to be paid. The same reads as under: “13.
Therefore, Rule 13(1) of the Rules has accordingly noted the said aspect of the matter and has stated that where an applicant is an aggrieved party other than the borrower and where the amount of debt due is Rs.10 lakhs and above, then the stipulated court fee would have to be paid. The same reads as under: “13. 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 subsection (1) of section 18 shall be accompanied by a fee provided in the subrule (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 subsection (1) of section 17 against any of the measures referred to in subsection (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.5,000 + 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 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.1,250 + 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 under section 17 Same fees as provided at clauses (a) to (e) of serial number 1 of this rule 11.
Appeal to the Appellate Authority against any order passed by the Debt Recovery Tribunal under section 17 Same fees as provided at clauses (a) to (e) of serial number 1 of this rule 11. That apart, Rule 13A has been inserted to the Rules with effect from 04.11.2016 subsequent to the insertion of Section 17(4A) of the SARFAESI Act, bearing in mind the remedy that is available to a tenant in respect of the measures initiated by the Bank or any creditor of a secured asset, Rule 13A of the Rules categorically talks of the fees that has to be paid by the tenant or the lessee of a secured asset. In the instant case, the petitioner who is a tenant has paid fee before the Debts Recovery Tribunal in accordance with Rule 13A of the Rules. For immediate reference, it could be extracted as under: “13A. Application by lessee or tenant. (1) Every application under subsection (1) of section 17 filed by lessee or tenant of the secured assets shall be accompanied by a fee specified in sub-clause (c) and sub-clause (d) of sub-rule (2) of rule 13, as the case may be. (2) The application to be made by the lessee or the tenant under subsection (1) of section 17, shall be in the form specified in Appendix X annexed to these rules.” 12. Having regard to the same, we find on a reading of column 1(d) of the table under Rule 13(2) of the Rules, that the court fee tendered by the petitioner herein would have to be as a tenant and accordingly the same has been paid. Therefore, the Tribunal was not right in holding that the petitioner herein had stepped into the shoes of the borrower and accordingly, has to pay the court fee as a borrower. 13. Hence, the impugned order is thus set aside. The writ Petition is allowed. The Tribunal to ascertain as to whether the quantum of court fee paid by the petitioner as a tenant is in accordance with the Rules and thereafter, to dispose of the appeal in accordance with law.