Karnataka High Court
Ms Bani Kaur Bedi vs Hdfc Bank Ltd on 5 September, 2013
Bench: Chief Justice, B.V.Nagarathna
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 5TH DAY OF SEPTEMBER 2013
: PRESENT :
THE HON'BLE MR. D.H.WAGHELA, CHIEF JUSTICE
AND
HON'BLE MRS. JUSTICE B.V.NAGARATHNA
R
WRIT PETITION Nos. 38093-94 / 2013 (GM-DRT)
BETWEEN
1. MS. BANI KAUR BEDI
D/O MR. H S BEDI, AGED ABOUT 24 YEARS
I-77, DIAMOND DISTRICT, AIRPORT ROAD
KODIHALLI, BANGALORE-560008
REPT. BY HER POWER OF ATTORNYE HOLDER
MRS AVNEET BEDI, AGED ABOUT 55 YEARS.
2. MR. AMAN SINGH BEDI
S/O MR. H S BEDI, AGED ABOUT 22 YEARS
I-77, DIAMOND DISTRICT, AIRPORT ROAD,
KODIHALLI, BANGALORE-560008
REPT. BY HIS POWER OF ATTRONEY HOLDER
MRS. AVNEET BEDI, AGED ABOUT 55 YEARS.
... PETITIONERS
( BY SRI AJESH KUMAR S, ADVOCATE FOR M/S DSK LEGAL. )
AND
HDFC BANK LTD
A BANKING COMPANY INCORPORATED
UNDER THE COMPANIES ACT, 1956
AND HAVING ITS OFFICE AT 548/D,
MARUTI MANSION, 2ND FLOOR, CMH ROAD
INDIRANAGAR, BANGALORE-560038
REPT. BY ITS AUTHORISED REPRESENTATIVE.
... RESPONDENT
( BY SRI SREEVATSA, SR. ADV. A/W MS. PALLAVI SMRITI,
ADVOCATE FOR M/S WADIA GHANDY & CO. )
2
WRIT PETITIONS FILED PRAYING TO SET ASIDE THE
ORDER OF THE DEBTS RECOVERY APPELLATE TRIBUNAL,
CHENNAI, DATED 29.7.2013 PASSED VIDE ANNEXURE-A AND
DIRECT THE HON'BLE DEBTS RECOVERY APPELLATE
TRIBUNAL, CHENNAI, TO HEAR THE APPEAL.
THESE PETITIONS COMING ON FOR PRELIMINARY
HEARING THIS DAY, CHIEF JUSTICE MADE THE FOLLOWING:
ORDER
D.H.WAGHELA, CJ (ORAL) :
1. Invoking Article 227 of the Constitution, the petitioners have sought to challenge the order dated 29.7.2013 of the Debt Recovery Appellate Tribunal (DRAT) at Chennai in AIR (SA) 1015/2012, whereby Interim Application No. 177/2013 in the appeal was disposed with the order as under:
"The petitioners are directed to deposit a sum of Rs.9,23,08,407/- into this tribunal on or before 27.8.2013. In the event the said deposit is not made into the tribunal on or before 27.8.2013 this petition shall stand automatically dismissed."3
2. The background of facts, briefly recorded in the impugned order, states that the amount claimed in Section 13(2) notice was Rs.18,46,16,813.41 ps. and it was seen that the petitioners had not made any payment after issuance of notice. It was also noticed that the Appellate Tribunal was bound by the provisions of Section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('the Act' for short).
3. Before arguing on the effect of the provisions of Section 18 of the Act, learned counsel for the petitioners fairly pointed out the previous order made by this court in their earlier petitions, being Writ Petition Nos. 42381- 86/2012. While disposing those petitions by order dated 19.10.2012, learned Single Judge of this court observed in the penultimate paragraph of the order as under:
"If the petitioners file an appeal within a period of four weeks from today and comply with all formalities contemplated under Section 18 of the Act for maintaining the appeal, the 4 appellate Tribunal shall consider the appeal on merits in accordance with law and after giving an opportunity of being heard to the respondent-Bank. Since the writ petitions were filed within 30 days from the date of the order passed by the Debts Recovery Tribunal, Karnataka, in S.A.No. 231/2011, the parties are directed to maintain status-quo for a period of four weeks from today. It is needless to mention that the petitioners shall intimate this order to the respondent forthwith. The petitioner shall also serve a copy of the appeal on the respondent-Bank well in advance. It is made clear that the order of status-quo shall not be extended further by this court and the petitioners will have to apply for an interim order before the appellate Tribunal with an advance notice to the respondents.
All contentions of the petitioners are kept open."
4. It may be pertinent to note here that the previous petitions were filed by six petitioners, including the borrower company, other borrowers and the petitioners herein, whereas the present petitions are filed by only two of those six original petitioners in the earlier petitions. It 5 may also be pertinent to note that the appeal of the petitioners being AIR (SA) 1015/2012 was filed from the order dated 18.9.2012 of the Debts Recovery Tribunal (DRT) in S.A.No. 231/2011, which was dismissed with the order as under:
" The present SA 231/2011 stands
dismissed with costs.
Interim order, if any, stands vacated. The respondent Bank is at liberty to proceed according to law in respect to schedule properties.
The Registry is directed to communicate copy of the order to the parties concerned by Speed Post or Registered Post with AD."
5. Thus, in short, even after dismissal on 18.9.2012 of the Securitisation Appeal of the original applicants under Section 17 of the Act, the petitioners appear to be resorting to different remedies for staving off the effect of dismissal of the appeal under Section 17 of the Act. Even after grant of limited temporary relief by this court, dehors any statutory provision in the Act, the petitioners have approached the 6 DRAT without depositing any amount in terms of the provisions of Section 18 of the Act.
6. With the above backdrop of facts, it was argued for the petitioners that they were not the borrowers and they were required to be permitted to establish that plea before the Appellate Tribunal in order to dispense with in their favour the requirement of pre-deposit before entertaining their appeal. Learned counsel emphasized the phrase "no appeal shall be entertained" occurring in the second proviso to sub-section (1) of Section 18 of the Act in support of the submission that the petitioners had the right to argue and establish before the Tribunal that the petitioners herein were not falling within the definition of 'borrower' as defined in Section 2(f) of the Act. He further submitted that, after that issue can be argued and a decision being arrived at, the Appellate Tribunal may insist upon the requisite pre-deposit for entertaining the main appeal and, on that basis, it was submitted that the appeal being automatically dismissed on failure to deposit the huge sum of Rs.9,23,08,407/- was improper and illegal. 7 Learned counsel pointed out that the petitioners herein were implicated in the proceedings only as guarantors and the premise of they being guarantors in fact, was also disputed by the petitioners.
7. A clear answer to the arguments of the petitioners could be culled out from the plain reading of the provisions of Section 18 of the Act, which may be extracted as under:
"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 along with such fee, as may be prescribed to an 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 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:8
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."
8. Upon a plain reading of the above provisions, it is clear that the forum of Appellate Tribunal is open to access by any person aggrieved by any order made by the DRT under Section 17 and such aggrieved parties are broadly divided into two categories by the first proviso, viz., borrower and person other than the borrower. However, the second proviso clearly states that no such appeal shall be entertained until the borrower has deposited with the 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. This provision 9 clearly goes to show the legislative intention of ensuring deposit of the amount as prescribed, before entertaining the appeal and the phrase "debt due from him" clearly refers to debt as claimed by the secured creditors or determined by the DRT, whichever is less. If the contentions of the petitioners were accepted, it would amount to entertaining the appeal, contrary to the express statutory provisions, before the required amount being deposited with the Tribunal. The status of the party approaching the Tribunal with an appeal could not be decided on the basis of his contentions in the appeal in the face of clear statutory provision providing for deposit on the basis of the amount of debt due from him "as claimed by the secured creditors or determined by the DRT". It is not the case of the petitioners that the amount is not claimed by the secured creditors from them.
9. Therefore, the argument of the petitioners that the impugned order effectively making it a condition precedent to entertaining their appeal was illegal, could not be accepted. Instead, the impugned order is found and held 10 to be in accordance with the scheme and provisions of Section 18 of the Act. Accordingly, the petitions are summarily dismissed.
Sd/-
CHIEF JUSTICE Sd/-
JUDGE ckc/-