Gujarat High Court
Pritesh Meghaji Penthani vs Union Of India & 5 on 11 August, 2014
Bench: Bhaskar Bhattacharya, J.B.Pardiwala
C/SCA/5760/2012 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 5760 of 2012
==========================================
===============
PRITESH MEGHAJI PENTHANI....Petitioner(s)
Versus
UNION OF INDIA & 5....Respondent(s)
==========================================
===============
Appearance:
MR MASOOM K SHAH, ADVOCATE for the Petitioner(s) No. 1
MR ANIP A GANDHI, ADVOCATE for the Respondent(s) No. 2
MR DEVANG VYAS, ADVOCATE for the Respondent(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 4 - 6
NOTICE UNSERVED for the Respondent(s) No. 3
==========================================
===============
CORAM: HONOURABLE THE CHIEF JUSTICE MR.
BHASKAR BHATTACHARYA
and
HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 11/08/2014
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MR. BHASKAR BHATTACHARYA)
1. By this Special Civil Application, the petitioner has prayed for the following reliefs:
"22. The Petitioner therefore most respectfully prays to this Hon'ble Court that:
(a) Be pleased to declare the IInd Proviso of Section 18 of Securitization Act, 2002 as ultra vires the Constitution of India and declare it as null, void ab initio and non-est.
(b) Be pleased to declare the IIIrd Proviso of Section 18 of Securitization Act, 2002 as ultra vires the Constitution of India and declare it as null, void ab initio and non-est.
(c) Be pleased to direct Hon'ble DRAT, Mumbai to decide Appeal (Lodg.) No.207/12 on merits.
(d) Be pleased to direct Hon'ble DRAT Mumbai to hear Appeal (Lodg.) 207 of 2012, styled as Pritesh Penthani versus Dena Bank to be heard at the earliest and till disposal of the Page 1 of 5 C/SCA/5760/2012 ORDER appeal before the DRAT Mumbai be pleased to grant status quo qua the properties in question.
(e) Pending Admission, Hearing and Final disposal of this Petition and the Appeal before the DRAT, Mumbai, be pleased to grant status quo qua the properties in question depicted in para no.12 of the petition.
(f) Costs of this Petition be awarded.
(g) Such further and other relief, order or direction which may be just, fit, proper and equitable in the facts and circumstances of the Petition."
2. Since the petitioner prays for a declaration that the second and third proviso of Section be declared as null and void, we issued notice to the learned Attorney General of India.
3. Mr.Vyas, the learned Assistant Solicitor General of India has appeared pursuant to the notice issued by us and at the same time Mr.Gandhi, the learned advocate has appeared on behalf of the concerned bank.
4. In order to consider the question raised in this application, it will be profitable to refer to the provisions contained in Section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 which is quoted below.
"18. Appeal to Appellate Tribunal.-
(1) Any person aggrieved, by any order made by the Debts Recovery Tribunal under section 17, may prefer an appeal alongwith such fee, as may be prescribed to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal.
PROVIDED that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower:
PROVIDED FURTHER that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per Page 2 of 5 C/SCA/5760/2012 ORDER cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less:
PROVIDED ALSO that the Appellate Tribunal may, for the reasons to be recorded in writing, reduce the amount to not less than twenty-five per cent of debt referred to in the second proviso.
(2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder."
5. It appears from the affidavit filed by the concerned bank that by auction the property mortgaged has been sold at the price of Rs.46 Lac and, according to the affidavit, a sum of Rs.12,35,000/- is further due as on 31st March 2012.
6. It appears that the petitioner has already filed an appeal against the order of the Debts Recovery Tribunal but no deposit having been made in terms of second proviso to Section 18, the appeal has not yet been registered.
7. In view of such fact, present application has been filed contending that the bank having already recovered more than 50% of the amount due, the second and third proviso to Section 18, Sub- section (1) cannot be literally enforced. According to Mr.Shah, the learned advocate for the petitioner, the intention of the legislature was that 50% of the due as determined by the Debts Recovery Tribunal should be deposited for the purpose of preferring an appeal, but if more than that amount has already been recovered by the creditor by way of auction sale, it should be presumed that the second proviso has already been complied with.
8. Mr.Vyas, the learned Assistant General of India, has fairly Page 3 of 5 C/SCA/5760/2012 ORDER conceded before us that the Delhi High Court in the case of Poonam Manshani v. J&K Bank Limited and Another reported in 2010 (1) DRTC 527 (Delhi), has already taken such view.
9. On consideration of the aforesaid provision and after taking into consideration the intention of the legislature, we are of the same view that if 50% of the amount due has already been recovered by the bank by sale of the mortgaged property, in that event, there is no necessity of further deposit of any amount as a condition precedent for maintaining the appeal under Section 18 of the Act.
10. We, thus, instead of declaring the second proviso of Section 18 as ultra vires, read down the same as under:
"Provided further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less, unless, in the meantime, the creditor has already recovered that amount by way of auction sale or otherwise and any amount recovered by way of auction sale or otherwise shall be adjusted towards 50% of the amount of debt due for the purpose of this proviso."
11. In view of what has been stated above, in this case, the petitioner is not required to deposit any further amount as a condition precedent for maintaining the appeal under Section 18 of the Act and the appellate authority is directed to decide the appeal on merits. In view of this order, the application stands disposed of. Direct service is permitted.
(BHASKAR BHATTACHARYA, CJ.) Page 4 of 5 C/SCA/5760/2012 ORDER (J.B.PARDIWALA, J.) *malek Page 5 of 5