Excel, a partnership firm, rep. By its Managing Partner, K. Natarajan v. Registrar, Debt Recovery Appellate Tribunal
2022-07-28
M.DURAISWAMY, SUNDER MOHAN
body2022
DigiLaw.ai
ORDER : (M. Duraiswamy, J.) Since the issue involved in all these writ petitions are identical, by consent of learned counsel for the petitioners, the writ petitions are disposed of by this common order. 2. Challenging the proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the petitioners filed appeals under Section 17 of the Act of 2002 before the Debts Recovery Tribunal, Coimbatore. The Tribunal passed a conditional order of stay, directing the petitioners to deposit 50% of the claim made by the secured creditor. Challenging the said order, the petitioners filed appeals before the Debt Recovery Appellate Tribunal, Chennai, along with applications for waiver of pre-deposit. The Appellate Tribunal ordered notice in the waiver applications. The grievance of the petitioners is that the Appellate Tribunal is not liable to insist on pre-deposit under Section 18 of the Act of 2002, in view of the judgment of Division Bench of this Court in Sree Jeya Soundharam Textile Mills Pvt. Ltd. rep. By its Managing Director, Perungudi Village, Sivagangai, ( 2019(5) MLJ 385 ) wherein it has been held as follows: “22.For the reasons stated above, we decide the issue with regard to making of pre-deposit for preferring an appeal before the Debt Recovery Appellate Tribunal as follows: (i) The borrowers and guarantors are liable to make pre-deposit as per the provisions of Section 18 of the SARFAESI Act or under Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 for preferring an appeal before the Debt Recovery Appellate Tribunal. (ii) The 3rd parties, who had purchased the property prior to the date of mortgage or derived/accrued title or right or tenancy right over the property prior to the date of mortgage, are not liable to make any pre-deposit for preferring an appeal before the Debt Recovery Appellate Tribunal, provided that they establish before the Debt Recovery Appellate Tribunal that they derived/accrued title or right or tenancy right over the property prior to the date of mortgage and that the property was mortgaged with the Bank without their knowledge.
If such 3rd parties file applications for waiver and if they establish that they have purchased the property or that they derived/accrued title, right or tenancy right prior to the date of mortgage and the property was mortgaged with the Bank without their knowledge, the Debt Recovery Appellate Tribunal shall give a finding with regard to the same and give exemption to such 3rd parties from making pre-deposit. (iii) The 3rd parties who had purchased the property either after the date of mortgage or derived/accrued title or right or tenancy right in respect of the property in question or after the initiation of SARFAESI proceedings are liable to make the pre-deposit and they should be treated on par with the borrower and the guarantor as per the provisions of both the Acts for the purpose of making pre-deposit. (iv) The Debt Recovery Appellate Tribunal shall consider the waiver applications filed by the 3rd parties, on merits and in accordance with law, following the principles laid down in this judgment and pass appropriate speaking orders giving findings with regard to the rights of the 3rd parties. (v) The secured creditors viz., the Banks and Financial Institutions or a Consortium or Group of Banks and Financial Institutions are not liable to make any pre-deposit for preferring an appeal before the Debt Recovery Appellate Tribunal. (vi) The auction purchaser is not liable to make any pre-deposit while preferring an appeal to the Debt Recovery Appellate Tribunal as against the order passed by the Debts Recovery Tribunal. (vii) The appellant who has filed an appeal before the Debt Recovery Appellate Tribunal as against the Interlocutory order passed by the Debts Recovery Tribunal, is not liable to make the pre-deposit if the liability is not determined by the Debts Recovery Tribunal in the interlocutory order. (viii) In any other category other than the categories mentioned above, the Debt Recovery Appellate Tribunal shall decide the waiver application as per the principles laid down in this judgment.” 3. Now, the petitioners have filed the above writ petitions to direct the first respondent to number the main appeals and pass orders in accordance with law. 4.
(viii) In any other category other than the categories mentioned above, the Debt Recovery Appellate Tribunal shall decide the waiver application as per the principles laid down in this judgment.” 3. Now, the petitioners have filed the above writ petitions to direct the first respondent to number the main appeals and pass orders in accordance with law. 4. Mr.S.Mohan, learned counsel for the petitioners, submitted that the petitioners need not pay the pre-deposit amount as per paragraph 22(vii) of the judgment in Sree Jeya Soundharam Textiles Mills Pvt. Ltd. The learned counsel further submitted that it would be suffice to direct the Appellate Tribunal to dispose of the waiver applications taking into consideration paragraph 22(vii) of the said judgment. 5. On a perusal of the judgment cited supra, it is clear that the petitioners, who have filed appeals before the Debt Recovery Appellate Tribunal as against the interlocutory order passed by the Debts Recovery Tribunal, are not liable to make pre-deposit, if the liability is not determined by the Debts Recovery Tribunal in the interlocutory order. In any event, the waiver applications filed by the petitioners should be disposed of taking into consideration paragraph 22(vii) of the judgment in Sree Jeya Soundharam Textiles Mills Pvt. Ltd. 6. In such view of the matter, the writ petitions are disposed of by directing the Debt Recovery Appellate Tribunal, Chennai, to dispose of the waiver applications taking into consideration the judgment cited supra and pass orders as expeditiously as possible, and in any event, within a period of two weeks from the date of receipt of a copy of this order. There will be no order as to costs. Consequently, W.M.P.Nos.18801, 18802, 18803, 18805 of 2022 are closed.