Debt Recovery Appellate Tribunal - Mumbai
Satpuda Tapi Parisar Sahakari Sakhar ... vs I.F.C.I. Ltd. And Ors. on 14 January, 2004
Equivalent citations: II(2005)BC229
ORDER
Pratibha Upasani, J. (Chairperson)
1. This appeal is sought to be filed by the appellants/original defendants being aggrieved by the judgment and order dated 29th November, 2002 passed by the learned Presiding Officer of Debts Recovery Tribunal - II Mumbai in Original Application No. 3546 of 2002. By the impugned order, the learned Presiding Officer allowed the application of the original applicants namely IFCI Limited, IDBI Limited and ICICI Bank Limited and ordered the defendant No. 1 namely M/s. Shree Satpuda Tapi Parisar Sahakari Sakhar Karkhana Limited (hereinafter to be referred to as Karkhana) to pay to the applicant No. 1 IFCI Limited a sum of Rs. 60,50,36,648/- with interest on Rs. 57,58,48,802/- at the rate of 20% per annum from the date of filing of the original application till realization. The learned Presiding Officer also ordered the defendant No. 1 to pay to the applicant No. 2 IDBI Limited a sum of Rs. 60,77,57,361/- with intereest on Rs. 57,58,04,597/- at the rate of 20% per annum from the date of filing of the original application till full realization. The learned Presiding Officer also ordered the defendant No. 1 to pay applicant No. 3 ICICI Limited a sum of Rs. 29,25,23,177/- with interest at the rate of Rs. 20% per annum from the date of filing of the original application till full realization. He also passed certain consequential orders and gave certain direction to the defendant No. 2 also and directed issuance of recovery certificate in the above stated terms. Being aggrieved, the person appeal is sought to be filed.
2. Today, the application for waiver of pre-deposit which is mandatorily required to be made under Section 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter to be referred to as RDB Act) is being argued.
3. I have heard Mr. Jaisinghani i/b Mr. B.V. Mahadik for the appellants and Ms. Rajani Iyer i/b M/s. Shaunak Satpute & Co. for the respondent Nos. 1 to 3. I have also gone through the proceedings and the application for waiver of deposit so also reply filed thereto.
4. The impugned judgment and order reveals that though the defendant Nos. 1 and 2 (appellants herein) appeared in the matter, they did not file any written statement nor remained present. The matter, therefore, proceeded ex parte against them and the impugned order came to be passed. Now before this Appellate Tribunal, in the application for waiver, contention is taken that the impugned order which is passed in the proceedings, is passed in the proceedings which are non est and nullity. The reason given is that the appellant No. 1 is a co-operative society which is registered under the Multi State Co-operative Societies Act, 1984 of which the appellant No. 2 is the director and the alleged guarantor. It is contended that although notice is mandatorily required to be served on the Central Registrar under Section 101 of the said Act, no such notice was in fact served prior to institution of the proceedings and in the absence of such notice, the entire proceedings are nullity.
It is also contended that since the appellants are engaged in activities which serve the essential needs of farmers, labourers, etc. and since the appellants are non-profit making organization, they should be exempted from mandatory requirement of depositing the amount as per the Section 21 of the RDB Act and that complete waiver should be granted to them. In the affidavit of Mr. Subhash Patil, Chief Accountant of the appellant No. 1, a statement is made that the Karkhana is not in good financial position and, therefore, they are unable to deposit 75% of the decretal amount. Some balance sheets are also annexed to this affidavit.
5. I have heard both the sides at length on the point of waiver of deposit. I have also gone through the balance sheets carefully.
6. Ms. Rajani Iyer appearing for the respondent Nos. 1 to 3 has vehemently argued that the Presiding Officer of DRT-II, Mumbai by his order dated 29.11.2001 on Exhibit No. 12 in Original Application No. 3546 of 2000, dismissed the application of the appellants wherein they had prayed for dismissal of the original application on the ground that notice contemplated by Section 101 of the Multi State Co-operative Societies Act, 1984 was not given and instead, notice under Section 164 of the Maharashtra Co-operative Societies Act, 1960 was given. This application made by the defendants was dismissed by the learned Presiding Officer observing that as per Section 101 of the Multi State Co-operative Societies Act, notice was necessary to be given in the case of suits and that since the original applications before the DRTs are not suits and since clear distinction exists between suits and the applications and since both are not the same things, such notice was not required to be given at all.
The learned Presiding Officer also further observed that the defendant No.l had not shown any record that it had informed the applicants that its registration was changed from under the Maharashtra Co-operative Societies Act to under the Multi State Co-operative Societies Act and therefore notice under Section 164 of the Maharashtra Co-operative Societies Act, 1960 was given. Apart form that the learned Presiding Officer observed that the suit could not be dismissed as against the defendant No. 2 as he had been sued in his capacity as guarantor and not as officer of the defendant No. 1 and therefore no notice was required to be issued before filing of the original application against him, and hence the original application was competent against the defendant No. 2. In view of these peculiar facts, the learned Presiding Officer observed that dismissal of the original application as against the defendant No. 1 was not called for. He therefore kept the original application pending for enabling issuance of notice and observed that this course would meet the ends of justice. He accordingly stayed the original application till 29.3.2002 for enabling the applicants to issue notice under Section 101 of Multi State Co-operati ves Act to the Karkhana.
Ms. Iyer appearing for the respondent Nos. 1 to 3 forcefully argued that this order dated 29.11.2001 was not carried in appeal by the appellants and therefore that order had attained finality. He further argued that in the main original application, the defendants chose not to file written statement and that they allowed the original application to proceed against them and therefore in this application for waiver they cannot be heard to say that the original application was bad against them as notice under Section 101 of the Multi State Cooperative Societies Act, 1984 was not given. She argued that once that issue was concluded the appellants cannot be allowed to re-agitate the same issue.
There appears to be substance in the submissions of Ms. lyer and from the record, it does appear that order dated 29.11.2001, whereby the learned Presiding Officer rejected the application of the appellants to dismiss the original application on the ground that notice as contemplated under Section 101 of the Multi State Co-operative Societies Act, 1984 should have been issued, was not challenged and thus that order had attained finality and therefore this issue now cannot be re-agitated in the application for waiver.
7. Ms. lyer also pointed out from the balance sheets that, these balance sheets were not audited balance sheets and that balance sheet for the year 2002-2003 was a provisional balance sheet of the appellant No. 1. Discussing each and every item of the balance sheets, Ms. lyer pointed out that there was increase in advances and deposits of the appellant No. 1. She further pointed out that though there was more expenditure, it is evident from the balance sheet that it was because the appellant No. 1 had no control over their expenditure and accumulated losses and that it was clear from the provisional and un-audited balance sheet that the Karkhana had nothing to do with welfare of the workmen and that the appellants had flittered away deposits and advances. She further argued that if the appellants were having losses then, it is all the more reason that the respondents should be allowed to take over the assets otherwise, the appellants would flitter away whatever assets they have.
I have heard both the sides at length. Having gone through the balance sheet of the year 2002-2003, which is un-audited and provisional and entries therein as pointed out by Ms. Iyer, I am convinced that the appellants have not approached this Tribunal with clean hands.
As far as merits of the matter are concerned, I refrain myself from making any comments on it at this stage. In view of the aforesaid discussion, I am of the view that this is not a fit case where the appellants case should be considered sympathetically.
8. Deposit of 75% of the amount as determined by the Tribunal under Section 19 of the RDB Act is a rule and any deviation therefrom is an exception. Considering overall circumstances of the present case, in my opinion, this is not a fit case where any deviation should be made from this mandatory rule. Hence, following order is passed:
ORDER Appellants to deposit with the office of DRAT, Mumbai, 75% of Rs. 60,50,36,648/- as determined by the Tribunal towards the claim of applicant No. 1 namely I.F.C.I. Ltd., 75% of Rs. 60,77,57,361/- towards the claim of applicant No. 2 namely IDBI and 75% of Rs. 29,25,23,177/- towards the claim of applicant No. 3 namely ICICI Bank Ltd., within eight weeks from today.
Needless to say, if the above amount is not deposited within the prescribed period, the appeal to stand rejected without any further recourse.
Stay to the recovery proceedings, if commenced.
Misc. Application No. 107/2003 is disposed of accordingly.