Telangana High Court
Ma. Sri Abhishek Steel And Power Ltd. vs Union Of India on 14 July, 2023
Author: P.Naveen Rao
Bench: P Naveen Rao, Nagesh Bheemapaka
HIGH COURT FOR THE STATE OF TELANGANA
********
WRIT PETITION NO.9648 of 2023
Between :
M/s. Sri Abhishek Steel &Power Ltd.,
(previously known as Abhishek Transtel Ltd. Company,
Regd. under the provision of Companies Act, 1956,
Rep.by its Director, namely Gopaal Agarrwal,
Having its Regd.Office at 71, 72, 73 (Part),
Gundla Pochampally, Medchal Mandal,
Medchal-Malkajgiri District and another.
.... Petitioners
And
Union of India, through its Ministry of Finance
and Law, New Delhi, India, rep.by its Secretary
And others. ..... Respondents
DATE OF JUDGMENT PRONOUNCED : 14.07.2022
THE HON'BLE THE ACTING CHIEF JUSTICE P.NAVEEN RAO
AND
THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
1. Whether Reporters of Local Newspapers : Yes
may be allowed to see the Judgments ?
2. Whether the copies of judgment may be : Yes
marked to Law Reporters/Journals
3. Whether Their Lordship wish to : Mark copy to
see the fair copy of the Judgment ? HNBK,J
2
* THE HON'BLE THE ACTING CHIEF JUSTICE P.NAVEEN RAO
AND
THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
+ WRIT PETITION NO.9648 of 2023
% 14.07.2022
# M/s. Sri Abhishek Steel &Power Ltd.,
(previously known as Abhishek Transtel Ltd. Company,
Regd. under the provision of Companies Act, 1956,
Rep.by its Director, namely Gopal Agarrwal,
Having its Regd.Office at 71, 72, 73 (Part),
Gundla Pochampally, medchal Mandal,
Medchal-Malkajgiri District and another.
.... Petitioners
And
Union of India, through its Ministry of Finance
and Law, New Delhi, India, rep.by its Secretary
And others. ... Respondents
!Counsel for the petitioners : Advocate General
Counsel for the Respondent No.1 :
Counsel for the Respondent No.2 : Sri S Ravi, Senior Counsel
Counsel for Respondent No. 5 : Sri Vedula Venkataramana
Senior Counsel
<Gist :
>Head Note:
? Cases referred:
3
THE HON'BLE THE ACTING CHIEF JUSTICE P.NAVEEN RAO
AND
THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION NO.9648 of 2023
Date: 14.07.2023
Between:
M/s. Sri Abhishek Steel &Power Ltd.,
(previously known as Abhishek Transtel Ltd. Company,
Regd. under the provision of Companies Act, 1956,
Rep.by its Director, namely Gopal Agarrwal,
Having its Regd.Office at 71, 72, 73 (Part),
Gundla Pochampally, Medchal Mandal,
Medchal-Malkajgiri District and another.
.... Petitioners
And
Union of India, through its Ministry of Finance
and Law, New Delhi, India, rep.by its Secretary
And others.
..... Respondents
This Court made the following:
4
THE HON'BLE THE ACTING CHIEF JUSTICE P.NAVEEN RAO
AND
THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION NO.9648 of 2023
ORDER:(Per Hon'ble Sri Justice P.Naveen Rao) First petitioner-company is engaged in the manufacturing of iron and structure steel for use in Transmission-cum-Telecom Towers. First petitioner-company applied to the 3rd respondent- Bank for sanction of cash credit limit to a tune of ₹ 30.00 crores and letter of credit to a tune of ₹ 7.00 crores and the Bank Guarantees. The loan account was made operational from 24.09.2009. In February, 2011, cash credit limit of ₹ 9.00 crores was sanctioned. At the time of sanction of loans, the petitioner-company pledged the immovable properties, plant and machinery as collateral security. Holding that the first petitioner-company defaulted in repayment of the loan, the loan account was classified as Non-Performing Asset (NPA) and the Bank has taken recourse to the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'Act, 2002') and Recovery of Debts and Bankruptcy Act, 1993 (for short, 'Act, 1993'). 5
2. On 21.09.2012, the 3rd respondent-bank issued possession notice informing the petitioner that the Bank has taken symbolic possession of factory and premises. Aggrieved thereby, S.A.No.421 of 2012 was filed before the Debts Recovery Tribunal at Hyderabad and the Tribunal granted interim order. During the pendency of the said S.A., 3rd respondent-bank assigned the loan account to the 2nd respondent. Petitioner- company later withdrew S.A.No.421 of 2012.
3. While so, 3rd respondent-bank filed O.A.No.125 of 2014 before the Debts Recovery Tribunal for recovery of the loans advanced by the Bank. Later, second respondent got impleaded in the said O.A. Petitioner-company was set ex parte. Petitioner- company filed M.A.No.161 of 2018 to recall the said order and the said application is stated to be pending consideration of the Tribunal. W.P.No.30971 of 2017 is filed challenging the action of 2nd and 3rd respondents in issuing sale notice on property bearing Sy.Nos.71, 72/73 of Gundlapochampally, Medchal- Malkajgiri District. The said Writ Petition was dismissed with liberty to approach the Appellate Tribunal.
4. In paragraph-14, the deponent narrates filing of S.A. before the Debts Recovery Tribunal, application filed for 6 condonation of delay, orders passed by the Debts Recovery Tribunal, filing of Appeal before the Debts Recovery Appellate Tribunal, etc. We are not recording the said averments in detail as they are not relevant for the purpose of considering the issue in this writ petition.
5. Suffice to note that S.A.(IR).No.1116 of 2019 was filed before the Debts Recovery Tribunal at Hyderabad challenging the sale notice issued by the 2nd respondent. As there was delay in filing the said S.A. (IR), I.A.No.3746 of 2019 is filed under Section 5 of Limitation Act praying to condone the delay in filing S.A.(IR). Said I.A., was dismissed declining to condone the delay. As a consequence S.A. (IR) was also dismissed. Aggrieved thereby, petitioner filed Appeal before the Debts Recovery Appellate Tribunal (DRAT) at Kolkata vide Diary No.446 of 2019. In the said appeal, petitioner filed I.A.No.517 of 2019 seeking waiver of pre-deposit. By the time writ petition was filed, said I.A. is pending for consideration. Court is informed that during the pendency of this writ petition, the Appellate Tribunal passed final orders rejecting application for waiver and challenging the order petitioner filed W.P.No.13321 of 2023 and the same is pending consideration by this Court.
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6. Contending that 5th respondent, who is the successful auction purchaser of the assets of the petitioner-company, has started construction activity over the property, excavating the land, leveling the land and raising structures thereon, thereby jeopardizing interests of the petitioner, as the petitioner has been contesting the various steps taken by the respondents 2 and 3 under the Act, 2002, and the Act, 1993, the instant writ petition is filed.
7. In the instant writ petition, petitioners are challenging the legality and validity of Section 18 of the Act, 2002 contending the same as illegal, arbitrary, contrary to law and violative of the petitioner's fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution of India and constitutional guarantee enshrined under Article 300-A and in gross violation of principles of natural justice. It is also prayed that it is patently, arbitrary, irrational, unreasonable, unfair, unjust and discriminatory for prescribing mandatory pre-deposit of 50% even when an interlocutory order is challenged under Section 18 of the Act, 2002 and is liable to be struck down as being unreasonable, unfair, unjust and discriminatory. 8
8. This writ petition is opposed by the 2nd respondent and 5th respondent.
9. We have heard learned Advocate General for petitioners, learned senior counsel Sri S.Ravi for 2nd respondent and learned senior counsel Sri Vedula Venkata Ramana for 5th respondent.
10. Learned Advocate General would contend that petitioners are aggrieved by the decision of the Debts Recovery Tribunal refusing to condone the delay and what is under challenge is the order of the Debts Recovery Tribunal refusing to condone the delay in preferring the S.A. As there is no determination of liability of the petitioner-company, at this stage, while challenging the interlocutory order passed by the Tribunal, the issue of pre-deposit of the amount as condition precedent to prefer an appeal does not arise and such prescription is ex facie illegal and unconstitutional. The statute cannot mandate pre- deposit of 50% of the alleged debt due even when the borrower is aggrieved by interlocutory orders passed by the Tribunal. The pre-deposit can be insisted once the Tribunal finally decides the matter and rejects the claim of the borrower and when liability is finally crystallized. In such an event, when borrower seeks to prefer an appeal, the insistence of pre-deposit is justified 9 because the amount is now quantified and liability is finalized. Mandate to pre-deposit in an appeal against interlocutory order would only curtail the right of the borrower to avail legal remedy and to challenge the ex facie illegal orders passed by the Tribunal.
11. Learned Advocate General would contend that Section 18 of the Act, 2002 provides remedy of appeal against orders passed by the Debts Recovery Tribunal in an application filed under Section 17 of the Act, 2002 and if the borrower intends to prefer appeal against any such order passed under Section 17 of the Act 2002, Section 18 requires pre-deposit as a condition precedent to prefer appeal, whereas petitioner preferred appeal against decision made by the Debts Recovery Tribunal in an application filed under Section 5 of the Limitation Act to condone the delay in filing the Securitization Application and, therefore, the rigor of pre-deposit required under Section 18 is not attracted.
12. Per contra, according to the learned senior counsel Sri S.Ravi, Section 18 of the Act, 2002 is very clear. According to second proviso, whenever an order is passed under Section 17 by the Debts Recovery Tribunal and the borrower intends to 10 challenge the said order before the Appellate Tribunal, it is mandatory for him to pre-deposit as a condition precedent to avail remedy of appeal. This section also vests discretion in the Appellate Tribunal to relax the rigor of pre-deposit upto 25% of the amount due claimed by the secured creditor or determined by the Tribunal, whichever is less. The provision in Section 18 is very clear and specific, that against any order passed by the Tribunal, it is mandatory to pre-deposit. This section does not make any distinction between the interlocutory order or final order. Further, though petitioner has filed application to condone the delay by taking recourse to section 5 of the limitation Act, said application is filed in SA (IR) filed under Section 17 and the application is filed to condone the delay in filing SA(IR) beyond the period of limitation prescribed in Section 17. Thus, the interlocutory application filed by the petitioner-company is directly arising out of the application filed under Section 17 and, therefore, an order passed in the I.A. to condone the delay in preferring the S.A., is also an order covered by Section 18 and, therefore, even when appeal is preferred challenging the order of the Tribunal refusing to condone the delay, the second proviso to Section 18 is attracted 11 and the appellant is required to comply the pre-deposit condition.
13. Learned senior counsel further contended that this issue has been considered by several High Courts and particularly the same issue has fallen for consideration before the Madras High Court in N.Madhavan vs. Union of India rep.by its Secretary, Department of Financial Services and others1 and Karnataka High Court in W.P.No.103026 of 2021 dated 09.02.2022 and both High Courts have repelled the challenge to the legality and validity of provision in Section 18 with reference to pre-deposit of amount to avail remedy of appeal against interlocutory orders. As the law is well settled, the present writ petition is also liable to be dismissed on that ground. He would submit that judicial discipline requires that when a High Court decides the legality of a particular statutory provision other High Courts also require to follow the same unless the decision of that High Court earlier made is reversed by the Hon'ble Supreme Court. Since two High Courts have repelled the challenge against the legality and validity of pre-deposit prescribed in Section 18 in the similar factual situation the present writ petition is also liable to be dismissed.
1 2020 SCC Online Mad 5236 12
14. Learned senior counsel Sri V.Venkata Ramana further added that by reading the prayer sought by the petitioner before the Appellate Tribunal, it is seen that petitioner was only asking for waiver of pre-deposit, whereas they are now assailing the validity of the statutory provision. Is it not permissible for the petitioners to change their stand and ask and challenge the validity and legality of statutory provision. He further contended that in the writ petition, order passed by the Debts Recovery Tribunal under Section 17 is not under challenge and therefore writ petition is not maintainable on that ground. He further contended that application to condone delay is not independent of the main S.A., and it is part of the SA proceedings and, therefore, Section 17 is attracted and against any order passed under Section 17 remedy is only under Section 18.
15. Learned senior counsel further contended that in Mardia Chemicals Ltd., and others vs. Union of India and others2, the constitutional validity of the entire enactment was challenged before the Hon'ble Supreme Court. On thorough analysis of various provisions of the Act, 2002, Hon'ble Supreme Court repelled the challenge to the constitutional validity of the Act except to a minor extent in sub-section (2) of Section 17. 2 (2004) 4 SCC 311 13 Since the constitutional validity of the entire enactment stood the test of judicial scrutiny, the question of this Court again going into the legality and validity of Section 18 does not arise and writ petition is liable to be dismissed.
16. To appreciate the respective contentions, it is necessary to look into the relevant provisions of the Act, 2002 and also to compare the relevant provisions of the Act, 2002 and the Act, 1993.
Act, 2002 Act, 1993 S.17. Application against measures to recover S.19. Application to the Tribunal.--(1) Where a secured debts.-- (1) Any person (including bank or a financial institution has to recover any borrower), aggrieved by any of the measures debt from any person, it may make an application referred to in sub-section (4) of section 13 taken to the Tribunal within the local limits of whose by the secured creditor or his authorised officer jurisdiction--
under this Chapter, may make an application along with such fee, as may be prescribed, to the Debts (a) the branch or any other office of the Recovery Tribunal having jurisdiction in the bank or financial institution is maintaining an matter within forty five days from the date on account in which debt claimed is outstanding, for which such measure had been taken: the time being; or Provided that different fees may be (aa) the defendant, or each of the prescribed for making the application by the defendants where there are more than one, at the borrower and the person other than the borrower. time of making the application, actually and voluntarily resides, or carries on business, or Explanation.-- For the removal of personally works for gain; or doubts, it is hereby declared that the communication of the reasons to the borrower by (b) any of the defendants, where there the secured creditor for not having accepted his are more than one, at the time of making the representation or objection or the likely action of application, actually and voluntarily resides, or the secured creditor at the stage of communication carries on business, or personally works for gain;
of reasons to the borrower shall not entitle the or person (including borrower) to make an application to the Debts Recovery Tribunal under (c) the cause of action, wholly or in part, this sub-section. arises: S.18. Appeal to Appellate Tribunal.-- (1) Any S.20. Appeal to the Appellate Tribunal.-- person aggrieved, by any order made by the Debts (1) Save as provided in sub-section (2), any Recovery Tribunal under section 17, may prefer an person aggrieved by an order made, or deemed to appeal along with such fee, as may be prescribed have been made, by a Tribunal under this Act, may to the Appellate Tribunal within thirty days from prefer an appeal to an Appellate Tribunal having the date of receipt of the order of Debts Recovery jurisdiction in the matter. Tribunal. (2) No appeal shall lie to the Appellate Tribunal
from an order made by a Tribunal with the consent 14 Provided that different fees may be of the parties. prescribed for filing an appeal by the borrower or (3) Every appeal under sub-section (1) shall be by the person other than the borrower: filed within a period of thirty days from the date on which a copy of the order made, or deemed to Provided further that no appeal shall be have been made, by the Tribunal is received by entertained unless the borrower has deposited with him and it shall be in such form and be the Appellate Tribunal fifty per cent. of the accompanied by such fee as may be prescribed:
amount of debt due from him, as claimed by the Provided that the Appellate Tribunal may secured creditors or determined by the Debts entertain an appeal after the expiry of the said Recovery Tribunal, whichever is less: period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period. Provided also that the Appellate (4) On receipt of an appeal under sub-section Tribunal may, for the reasons to be recorded in (1), or under sub-section (1) of section 181 of the writing, reduce the amount to not less than twenty- Insolvency and Bankruptcy Code, 2016 (31 of five per cent. of debt referred to in the second 2016)], the Appellate Tribunal may, after giving proviso. the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, (2) Save as otherwise provided in this confirming, modifying or setting aside the order Act, the Appellate Tribunal shall, as far as may be, appealed against.
dispose of the appeal in accordance with the (5) The Appellate Tribunal shall send a copy provisions of the Recovery of Debts Due to Banks of every order made by it to the parties to the and Financial Institutions Act, 1993 (51 of 1993) appeal and to the concerned Tribunal. and rules made thereunder. (6) The appeal filed before the Appellate Tribunal under sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of receipt of the appeal.
S.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 3 [fifty per cent.] 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, 4 [reduce the amount to be deposited by such amount which shall not be less than twenty-five per cent. of the amount of such debt so due] to be deposited under this section.
17. Section 17 of the Act, 2002 vests right in any person aggrieved by any decision taken by the secured creditor under Section 13(4) of the Act, 2002 to avail remedy of filing S.A., before the Debts Recovery Tribunal. As per sub-section (1), 15 such application has to be filed within 45 days from the date of which such measure has been taken. As per section 17 (7) of Act, 2002, the provisions of the Act, 1993 are made applicable. Section 22 of the Act, 1993 prescribes procedure and powers of the Tribunal and the Appellate Tribunal.
18. Section 18 provides remedy of appeal before the appellate Tribunal. Any person aggrieved by any order made by the Debts Recovery Tribunal under Section 17 is entitled to prefer appeal with such fee as may be prescribed by the Appellate Tribunal, within 30 days from the date of the order of Debts Recovery Tribunal. As per second proviso to sub-section (1), if the borrower intends to prefer appeal against order passed by the Debts Recovery Tribunal under Section 17, it mandates the borrower to pre-deposit 50% of the amount of debt due from him as claimed by the secured creditor or determined by the Debts Recovery Tribunal, whichever is less. In other words, any person aggrieved by an order, if prefers appeal he must pay prescribed fee determined by the Appellate Tribunal. If such person is a borrower in addition to fee prescribed by the appellate tribunal he is also required to pre-deposit 50% of the amount of debt due. Third proviso vests discretion in the 16 appellate tribunal to reduce the amount of pre-deposit to not less than 25% of the debt due.
19. Section 18 does not make any distinction between preferring appeal against interlocutory order or a final order. Though learned Advocate General sought to bring out distinction between the application filed for condonation of delay from any other application, we do not see any merit in the said submission. The petitioner filed SA before the Debts Recovery Tribunal aggrieved by the measures initiated by the secured creditor under the Act, 2002. As the application filed under Section 17 was beyond 45 days from the date of the measures taken by the secured creditor, he was required to file an application for condonation of delay. Therefore, I.A., was filed praying to condone the delay by taking recourse to Section 5 of the Limitation Act. As the Tribunal was not convinced to condone the long delay in preferring the application under Section 17, the I.A., was dismissed and consequently SA (IR) was also dismissed. This is an order traceable to the power of Tribunal under Section 17. Once an order is passed under section 17, remedy is only under Section 18 and when borrower seeks to avail remedy of appeal provided under Section 18, he has to necessarily comply the requirement of pre-deposit. 17
20. The legislative intent in mandating such deposit is clearly discernible if we compare the relevant provisions in Sections 20 and 21 of the Act, 1993 to that of Section 18 of Act, 2002. Against any decision made in application under Section 19 of Act, 1993, remedy of appeal is provided before the Appellate Tribunal under Section 20. Section 21 of the Act, 1993 prescribes pre-deposit only against final order made by the tribunal determining the debt due from the borrower. Section 20 of the Act, 1993 does not require pre-deposit against any interlocutory orders passed by the Tribunal under Section 19. This finer distinction brought out in Act, 1993 clearly expresses the legislative intent. When the legislative intent is clearly discernible, the same has to be given effect to and the Court cannot take a view different from the legislative intent unless it is found to be unconstitutional and/or lacks legislative competence to make such law. Even otherwise, it cannot be said that Section 18 of the Act, 2002 is arbitrary, discriminatory and, therefore, unconstitutional. finer
21. We do not need to elaborate this aspect having regard to the law laid down by the Hon'ble Supreme Court in Mardia Chemicals Ltd., (supra). After elaborately discussing the 18 various provisions of the Act, 2002, Hon'ble Supreme Court held as under:
"82. We, therefore, subject to what is provided in para 80 above, uphold the validity of the Act and its provisions except that of sub-section (2) of Section 17 of the Act, which is declared ultra vires Article 14 of the Constitution of India."
22. Thus, the constitutional validity of the Act, 2002 stood the test of judicial scrutiny.
23. Leaving aside the legality and validity of the entire enactment considered in Mardia Chemicals Limited, the challenge made from time and again against various provisions of the Act have also stood the test of judicial scrutiny of various High Courts. Having regard to the issue involved, two decisions which require specific reference are the decisions rendered by the Madras High Court and Karnataka High Court.
24. In N.Madhavan (supra), petition was filed under Article 226 of the Constitution of India praying to declare that Section 18(1) of the Act and second proviso thereunder as unconstitutional and void ab initio and consequently direct the second respondent to refund the payment of ₹ 1.51 lakhs already paid as pre-deposit to the second respondent. Learned Division Bench presided by the then Chief Justice of Madras High Court held as under:
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"5. We considered the submissions of the learned counsel for the Petitioner and examined the records. Upon perusal of the chronology of events in this case, we find that this is the third writ petition filed by the Petitioner herein with regard to the pre-deposit of the sum of Rs. 1.51 lakhs. By W.P. No. 30324 of 2019, the order dated 30.09.2019 of the DRAT was challenged on the ground that it violates the judgment in Mardia Chemicals in as much as the Petitioner is still at the threshold and the appeal before the DRAT was equivalent to a proceeding before a court of first instance. The same contention was raised in W.P. No. 519 of 2019 by again relying on Mardia Chemicals and by contending that the Petitioner's appeal is against an order under Section 5 of the Limitation Act and not under Section 17 of the SARFAESI Act. By order dated 20.01.2020, a Division Bench of this Court rejected the said contention and exercised discretion to the limited extent of granting two weeks time from the date of receipt of the order dated 20.01.2020 to make the pre-deposit. The present writ petition is filed in these facts and circumstances. On each of the two previous occasions, the fact situation was that the Petitioner had been directed to make the pre-deposit as a condition precedent to maintain the appeal. The fact situation prevailing, at this juncture, remains unchanged except to the limited extent that the Petitioner has remitted the pre-deposit. Thus, in the two earlier writ petitions, the Petitioner could have challenged the constitutional validity of Section 18(1) of the SARFAESI Act and the second proviso thereto but chose not to do so. In sum, the Petitioner is contending for the third time that the DRAT order is an order in a Section 5 application and not in an application under Section 17 of the SARFAESI Act. The only difference in the present case is that the Petitioner also challenges the constitutional validity of Section 18(1) of the SARFAESI Act and the second proviso thereto albeit on grounds raised on two earlier occasions.
xxx
15. We find that the pre-deposit provision (the second and third proviso) in Section 18 is applicable only to borrowers, as defined in the SARFAESI Act. In addition, the DRAT is vested with the discretion to reduce such pre-deposit to not less than 25% of the debt. Hence, the provision cannot be said to be arbitrary, onerous or unreasonable. Mr. Subramaniyan had also contended that his appeal before the DRAT was in respect of the dismissal of an application under Section 5 of the Limitation Act and, therefore, the order of the DRT should not be construed as an order under Section 17 of the SARFAESI Act. In our view, this contention is tenuous. Once the Section 5 application is rejected, it is tantamount to a rejection by the DRT of the Section 17 application and a refusal to interfere with the measures taken by the secured creditor under Section 13(4). Thereafter, the only statutory recourse available to the 20 borrower is to appeal under Section 18 to the DRAT, which functions as an appellate forum and not as a court of first instance. Therefore, we find no reason to strike or even read down Section 18(1) of the SARFAESI Act and the second proviso thereto. Hence, we uphold the validity thereof."
(emphasis supplied)
25. In the writ petition before Karnataka High Court in W.P.No.103026 of 2021 also, it was prayed to hold and declare second and third provisos of Section 18 of the Act, 2002 to the extent of requiring the borrower to make a pre-deposit for the purpose of entertaining the appeal by the 1st respondent as unconstitutional as being ultra vires Article 14 of the Constitution of India and sought for consequential reliefs. In the said case, as there was a delay in filing S.A, before the Tribunal, application was filed to condone the delay. The Debts Recovery Tribunal refused to condone the delay and dismissed the application. Against said order, appeal was preferred before the appellate Tribunal. In the said appeal, application was filed seeking waiver of pre-deposit. Debts Recovery Appellate Tribunal passed orders to deposit ₹ 2 crores in two instalments of ₹ 1.00 crore each by fixing time for each deposit. As the appellant did not deposit the amount, the appeal was dismissed for non-compliance of the order relating to pre-deposit. The same was challenged before the Karnataka High Court. Similar contention as urged by the learned Advocate General was urged 21 before the Karnataka High Court. On going through the provisions in Section 18 of the Act, 2002, Karnataka High Court observed that Section 18 talks of any order passed by the Tribunal and that it does not make any distinction between order on interlocutory application or on the main application and repelled the challenge to legality and validity of second and third provisos to Section 18 of the Act, 2002.
26. We are in respectful agreement with the view expressed by the Karnataka High Court and the Madras High Court in the two decisions referred to above.
27. Having regard to the statutory provisions as interpreted by various High Courts and the Hon'ble Supreme Court, the requirement to pre-deposit upto 50% of the debt due to prefer an appeal under Section 18 of the Act, 2002 against any order passed by the Tribunal under Section 17 is mandatory and such requirement is applicable to any order passed by the tribunal under Section 17, including an order passed in an application to condone the delay in filing S.A., under section 17 of the Act, 2002.
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28. We see no merit in the Writ Petition and is accordingly dismissed. Pending miscellaneous applications if any shall stand closed.
___________________________ P.NAVEEN RAO, HACJ ___________________________ NAGESH BHEEMAPAKA,J Date: 14.07.2023 Kkm 23 THE HON'BLE THE ACTING CHIEF JUSTICE P.NAVEEN RAO AND THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION NO.9648 of 2023 Date: 14.07.2023 kkm