Progressive Aquatech Enterprises v. Debts Recovery Tribunal, Hyderabad
2021-12-23
P.MADHAVI DEVI, UJJAL BHUYAN
body2021
DigiLaw.ai
ORDER : 1. Heard Mr. N. Gangadhar, learned counsel for the petitioner and Mr. Ravinutala Venkata Subba Rao, learned counsel for respondents No. 2 and 3. 2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of docket order dated 12.10.2021, passed by the Debts Recovery Tribunal-II, Hyderabad (for short ‘the Tribunal’) in S.A.I.R. No. 356 of 2021 and further seeks a direction to the Tribunal for refund of court fee of Rs. 1 lakh paid by the petitioner. 3. Be it stated, that against the sale notice dated 12.03.2021, issued by respondents No. 2 and 3 i.e. Indian Bank for auction sale of the secured asset on 16.04.2021, petitioner No. 1 filed Securitisation Application before the Tribunal under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) which was numbered as S.A.I.R. No. 356 of 2021. Along with the Securitisation Application, petitioner paid court fee of Rs. 1 lakh. 4. As the auction sale of the secured asset did not materialize on 16.04.2021 for want of bidders, petitioner withdrew the Securitisation Application from the Tribunal. Thereafter, petitioner filed an application seeking refund of the court fee paid. By the docket order dated 12.10.2021, Tribunal rejected the said application. Aggrieved, present Writ Petition has been filed. 5. On 29.11.2021, we had issued notice to respondents No. 2 and 3 with the observation that on the returnable date an endeavour would be made to dispose of the Writ Petition. 6. Learned counsel for the parties have made detailed submissions, which we have duly considered. We have also perused the materials on record. 7. At the outset, we may advert to the docket order dated 12.10.2021, relevant portion of which is extracted hereunder: “On 17-04-2021, a Securitisation Application (SA) vide SAIR No. 356/2021 was filed before the DRT-2, Hyderabad, by M/s. Progressive Aquatech Enterprises against M/s. Indian Bank and Another and a Court Fee of Rs. 1,00,000/- was also paid.
7. At the outset, we may advert to the docket order dated 12.10.2021, relevant portion of which is extracted hereunder: “On 17-04-2021, a Securitisation Application (SA) vide SAIR No. 356/2021 was filed before the DRT-2, Hyderabad, by M/s. Progressive Aquatech Enterprises against M/s. Indian Bank and Another and a Court Fee of Rs. 1,00,000/- was also paid. The relief sought in the said SA is “to set aside the Sale Notice dated 12-03-2021, putting the secured asset for auction on 16.04.2021, consequently to set aside the Possession Notice dated 16-11-2019 including the Notice U/s. 13(2) of the Act.” However, for reasons best known to the Applicant, even before the said case was numbered for want of compliance of observations the Counsel for Applicant did not opt to pursue the case. Subsequently, by filing a Petition under Rule 4 of DRT (Refund of Court Fee) Rules, 2013, R/w. Section 22(2) (h) of RDB Act, 1993 he has sought for refund of Court Fees in the said case. It is worthwhile to mention here the relevant provisions governing refund of Court Fees: (a) Section 19 [(3B)] of the RDB Act, 1993 which stipulates that - If any application filed before the Tribunal for recovery of any debt is settled prior to the commencement of the hearing before the Tribunal or at any stage of the proceedings before the final order is passed, the applicant may be granted refund of the fees paid by him at such rates as may be prescribed. (b) The Debt Recovery Tribunals (Refund of Court Fee) Rules, 2013 in respect of Original Applications. Hence, on going through the above mentioned Section 19 [(3B)] of the RDB Act, 1993 and the Rules mentioned in the DRT (Refund of Court Fee) Rules, 2013, it is very clear that, it is only in the case of OA filed for Recovery of Debts, the question of return of Court Fee arises. By virtue of above Section/Rules, it is clear that, Securitization Application (SA) filed under Section 17 of SARFAESI Act will not come under its purview. Even otherwise, there is no specific Section/Rule in the SARFAESI Act/Rules duly permitting return of Court Fee in SAs. In view of the above, when the provisions of The RDB/SARFAESI Acts do not permit refund of Court Fee, we may dismiss the petition filed for refund of Court Fees.” 8.
Even otherwise, there is no specific Section/Rule in the SARFAESI Act/Rules duly permitting return of Court Fee in SAs. In view of the above, when the provisions of The RDB/SARFAESI Acts do not permit refund of Court Fee, we may dismiss the petition filed for refund of Court Fees.” 8. ‘Debts Recovery Tribunal’ as referred to above would mean the Tribunal established under sub-section (1) of Section (3) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, which has since been rechristened as Recovery of Debts and Bankruptcy Act, 1993 (briefly ‘the 1993 Act’ hereinafter). 9. Under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) an aggrieved person may file an application before the jurisdictional Debts Recovery Tribunal against any of the measures taken by the secured creditor under Section 13(4) thereof. 10. As per sub-section (7) of Section 17 of the SARFAESI Act, the Debts Recovery Tribunal shall dispose of the application filed under sub-section (1) of Section 17, as far as may be, in accordance with the provisions of the 1993 Act. 11. Section 37 of the SARFAESI Act clarifies that provisions of the SARFAESI Act would be in addition to, and not in derogation of, amongst others the 1993 Act. 12. In so far the 1993 Act is concerned, Section 19 deals with filing of application by a bank or by a financial institution to the Debts Recovery Tribunal, for recovery of debt. Sub-Section (3B) thereof says that if any application filed before the Tribunal for recovery of any debt, is settled prior to commencement of the hearing or at any stage of the proceedings before the final order is passed, the applicant may be granted refund of the fees paid by him at such rates as may be prescribed. In this connection, the Debts Recovery Tribunals (Refund of Court Fee) Rules, 2013, have been framed. 13. Adverting to the facts of the present case, what is discernible is that, petitioner had filed a Securitisation Application against the sale notice dated 12.03.2021 issued by respondents No. 2 and 3 proposing to auction sale the secured asset. The auction sale scheduled on 16.04.2021, however, did not materialise. As a result, the very grievance of the petitioner did not survive.
The auction sale scheduled on 16.04.2021, however, did not materialise. As a result, the very grievance of the petitioner did not survive. Therefore, there was no reason for the petitioner to pursue the Securitisation Application. However, pointing out certain defects in the application, the same was returned by the Tribunal. Thereafter, petitioner filed an application under Rule 4 of the Debts Recovery Tribunals (Refund of Court Fee) Rules, 2013 (for short ‘the Rules’). 14. Rule 4 of the Rules deals with amount of refund and the same is reproduced as under: “Amount of refund - The Presiding Officer of the Tribunal before which any case is filed for settlement of the dues of the Banks and Financial Institutions may order refund of fee remitted at the time of filing the case at the following rates.” 15. On going through the above Rule, we find that the said provision would not be applicable to the fact situation of this case inasmuch as there was no settlement in this case. What had happened was that because the auction sale did not materialise, petitioner did not pursue the Securitisation Application, which was, however, returned for non-rectification of certain defects. Question of rectifying the defects did not arise as the Securitisation Application had become infructuous. 16. In our view, though there is no specific provision in the SARFAESI Act for refund of court fee, nonetheless from a joint reading of Section 17(7) and Section 37 of the SARFAESI Act, a view can be taken that relevant provisions of the 1993 Act would be applicable to a proceeding before the Tribunal under the SARFAESI Act vis-a-vis refund of court fee. 17. When the petitioner did not pursue the Securitisation Application and there was no proceeding of the Tribunal on the said application, it would not be just and proper for the Tribunal to withhold the court fee paid by the petitioner. Of course, the amount that was expended in processing the Securitisation Application before the Tribunal may have to be deducted from the total amount of court fee deposited by the petitioner. But, withholding the entire amount of court fee, so deposited by the petitioner, would not be just and fair. 18.
Of course, the amount that was expended in processing the Securitisation Application before the Tribunal may have to be deducted from the total amount of court fee deposited by the petitioner. But, withholding the entire amount of court fee, so deposited by the petitioner, would not be just and fair. 18. In the circumstances, we set aside the docket order dated 12.10.2021 passed by the Tribunal in S.A.I.R. No. 356 of 2021 and direct the Tribunal to refund the court fee paid by the petitioner, after making necessary deduction in accordance with law. This shall be done within a period of four weeks from the date of receipt of a copy of this order. 19. Writ Petition is disposed of accordingly. Related interim application is also disposed of. 20. No costs.