Karnataka High Court
The Karnataka Industrial Areas ... vs Uco Bank on 2 November, 2018
Equivalent citations: 2019 (1) AKR 319, (2019) 2 KCCR 1447
Bench: Raghvendra S.Chauhan, B.M.Shyam Prasad
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2nd DAY OF NOVEMBER 2018
PRESENT
THE HON'BLE MR JUSTICE RAGHVENDRA S. CHAUHAN
AND
THE HON'BLE MR JUSTICE B. M. SHYAM PRASAD
WRIT PETITION No.48323/2018(GM-DRT)
BETWEEN:
THE KARNATAKA INDUSTRIAL
AREAS DEVELOPMENT BOARD
No.49, IV & V FLOORS, KHANIJA
BHAVAN, RACE COURSE ROAD
BENGALURU - 560 001
REP. BY ITS SECRETARY-III.
... PETITIONER
(BY SRI. P. V. CHANDRASHEKAR, ADV.)
AND:
1. UCO BANK
1ST FLOOR, No.13/22
K G ROAD
BENGALURU - 560 009
REPTD. BY ITS CHIEF MANAGER.
2
2. SKYHIGH FASHIONS PRIVATE LTD.
No.53, 2ND FLOOR,
COMMERCIAL STREET
BENGALURU - 560 001
REPRESENTED BY ITS MANAGING
DIRECTOR.
....RESPONDENTS
(BY SRI K R PARASHURAM, ADV. FOR C/R1,
NOTICE TO R2 DISPENSED WITH)
THIS WRIT PETITION IS FILED UNDER ARTICLES
226 AND 227 OF THE CONSTITUTION OF INDIA
PRAYING TO SET ASIDE THE ORDER DATED
03.10.2018 PASSED ON I.A.NO.899/2018 IN AIR
495/2018 BY THE HON'BLE DEBT RECOVERY
APPELLATE TRIBUNAL, CHENNAI AT ANNEXURE 'A'
AND CONSEQUENTLY DIRECT THE HON'BLE DEBT
RECOVERY APPELLATE TRIBUNAL, CHENNAI TO
ENTERTAIN THE APPEAL FILED BY THE PETITIONER
NUMBERED AS AIR 495/2018.
THIS WRIT PETITION COMING ON FOR
PRELIMINARY HEARING THIS DAY, RAGHVENDRA S
CHAUHAN J., MADE THE FOLLOWING:
ORDER
The learned counsel for the petitioner seeks to dispense with service of notice on respondent No.2.
2. Notice on respondent No.2 is dispensed with. 3
3. The Karnataka Industrial Areas Development Board, the petitioner, has challenged the legality of the order dated 03.10.2018, passed by the Debt Recovery Appellate Tribunal ('DRAT' for short), whereby the Learned Tribunal has directed the petitioner to deposit 50% of the debt amount, i.e., Rs.1.60 crores with the Registrar of the Tribunal as pre-deposit for hearing the appeal filed by the petitioner.
4. The learned counsel for the petitioner submits that the learned Tribunal has directed the petitioner to make a pre-deposit of Rs.1.60 crores with the Registrar of the Tribunal within a period of four weeks, in accordance with Section 21 of the Recovery of Debts and Bankruptcy Act,1993 ('The Act' for short). However, under the said provision, the said liability is imposed only upon the person from whom the amount is due to the bank and financial institution. Since the petitioner is not a person from whom any amount is owed to the 4 bank, the said liability cannot be imposed upon the petitioner. Therefore, the impugned order is legally unsustainable. In order to buttress this plea, the learned counsel has relied upon the judgment of this Court in (W.P.No.19445/2018 decided on 26.10.2018). The learned counsel for the petitioner submits that the time granted to the petitioner for making pre-deposit, is already over.
5. On the other hand, the learned counsel for the Bank, submits that the relief claimed by the petitioner before the learned Tribunal has already been granted by the Recovery Officer. Therefore, there is no need to go into the legal issue, 'Whether the liability of pre-deposit could be imposed upon the petitioner, or not?'
6. Heard the learned counsel for the parties.
7. The position being taken by the learned counsel for the Bank, is unsustainable. For, the legal 5 issue 'Whether the learned Tribunal is justified in imposing the liability of pre-deposit upon the petitioner, or not, by its impugned order?' needs to be settled.
8. Section 21 of the Act reads as under:
'21. Deposit of amount of debt due, on filing appeal.--Where an appeal is preferred by any person from whom the amount of debt is due to a bank or a financial institution or a consortium of banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal (fifty-percent) of the amount of debt so due from him as determined by the Tribunal under section 19:
Provided that the Appellate Tribunal may, for reasons to be recorded in writing, (reduce the amount to be deposited by such amount which shall not be less than twenty- five percent, of the amount of such debt so due) to be deposited under this section.' (Emphasis added)
9. A bare perusal of the said Provision clearly reveals that the liability to make a pre-deposit is limited to "any person from whom the amount of debt is due to a bank or a financial institution". Therefore, the said 6 liability cannot be imposed upon those who do not owe any amount to be paid to a bank. Since, the petitioner, in the present case, does not owe any debt to be paid to the bank, the learned Tribunal is unjustified in imposing the liability of pre-deposit upon the petitioner.
10. Since Section 21 of the Act is limited to a particular class of persons, the learned Tribunal is unjustified in interpreting and implementing Section 21 of the Act as though the liability to pay the pre-deposit is imposed upon person approaching the Appellate Tribunal for filing an appeal.
11. Further, Section 20 of the Act bestows the right to file an appeal any order made, or deemed to have been made by the learned Debt Recovery Tribunal. However, under Section 21 of the Act, the liability to submit a pre-deposit is not imposed upon every person filing an appeal before the learned Tribunal. 7
12. For the reasons stated above, the petition is allowed. The impugned order dated 03.10.2018 is set- aside. In case the appeal has been dismissed on the ground of non-deposit of the pre-deposit, the Tribunal is directed to restore the appeal, and to decide the same within a period of three months from the date of receipt of the certified copy of this order.
No order as to cost.
SD/-
JUDGE SD/-
JUDGE brn