Last Updated on May 27, 2024 by Satish Mishra
In this post we will discuss about the the deposit amount under section 21 of Recovery of Debts due to Banks and Financial Institutions Act, 1993 fo filing an appeal in Debt Recovery Appellate Tribunal.
Supreme Court already has held that Borrower Has To Pre-Deposit 50% Of The “Debt Due” In Appeal Under Section 18 Of The Sarfaesi Act Before DRAT.
If you are looking for DRT Fee calculator, then you must check it here.
Before the Bombay High Court, it was the case on behalf of the borrower that though as per Section 18 of the SARFAESI Act, no appeal filed by the borrower can be entertained by the DRAT unless the borrower deposits with the DRAT 50% of the amount of “debt due” from him, as claimed by the secured creditor.
Banks and financial institutions are eligible to file cases in Debt Recovery Tribunals, with a minimum due amount set at more than 20 lakh rupees.
DRTs are mandated to resolve the cases within 6 months. The appeals against the orders passed by DRT can be made before a DRAT within 45 days of such judgment. In the case of the SARFAESI Act, the time duration to dispose of the cases is 60 days to 4 months.
Neeraj Kumar Vaidya v. Punjab National Bank and Others
NAME OF THE COURT- The High Court of Himachal Pradesh, Shimla
DATE OF DECISION- 26th December, 2019
NAME OF THE PARTIES-
- Petitioners-
Neeraj Kumar Vaidya
- Respondents-
Punjab National Bank and Others
BRIEF STATEMENT OF FACTS-
In the present case, the Chandigarh Debts Recovery Tribunal had allowed the Application that was filed the respondent bank which declared that the petitioners would be held liable to pay a sum of five crore forty nine lakhs ninety six thousand six hundred and forty two rupees (Rs. 5,49,96,642) along with interest. The petitioner chose to place an appeal before the Debts Recovery Appellate Tribunal, Delhi seeking an exemption from depositing the above-mentioned amount under Section 21 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The application that filed to the Debts Recovery Appellate Tribunal was dismissed.
PETITIONER’S ARGUMENTS/ EVIDENCES-
The counsel for the Petitioner contended that seeking an exemption from the deposition of the said amount that was required to be deposited while filing the appeal which was prescribed under Section 21 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The said application before the DRAT was not considered. It was further contended by the Petitioners that, when the case was called, an annexure was submitted by the proxy counsel appearing on behalf of the petitioners that the deposit in accordance with Section 21 of the Act would be made within four weeks.
ALSO READ-APPLICATION FOR INITIATION OF CIRP AGAINST DEBTOR ADMITTED BY TRIBUNAL
RESPONDENT’S ARGUMENTS/ EVIDENCES-
The Counsel for the Respondents submitted that the Application filed before the DRT was passed and the directed the Petitioners to pay the deposit amount. The DRAT also did not consider the Application of the Petitioner after due deliberation of the arguments of both the parties. Therefore, the question to reconsider the amount should not arise for the Petitioners.
CONTROVERSY INVOLVED FOR ADJUDICATION-
- Whether the Petitioners are required to pay the deposit amount of about five crore rupees to the respondent bank.
FINDINGS OF THE COURT-
The Court having perused the arguments of both the parties having sifted through the evidence at hand, noted that the DRT had indeed passed an order asking the Petitioners to pay the deposit amount that was claimed by the bank. The petitioner who was actually the Defendant no. 6 before the DRT and the appellant before the DRAT has contended that he is not liable to pay the deposit amount. The Court has held that in terms of Section 21 of the Act, when an Appeal is filed by any person from whom the amount debted is still due with the bank, then that kind of an appeal would not be entertained unless such person has already deposited about 75% of the amount with the DRAT. This amount is determined by the DRT.
According to this section, it has been mandated that the 75% amount must be deposited else the appeal shall not be considered for hearing. Proviso to Section 21 clearly states that if a person seeks to exempt or waive the amount to be paid, the reasons should be recorded with the DRAT, and the pre deposit amount might be reduced or waived. Such a waiver can be sought by making an application, and the DRAT has the duty to pass an order on that application. But in the present case, the DRAT has not disposed off the application filed by the petitioner. Therefore, it would be just and considerate of the DRT passes an order regarding the application filed by the petitioner.
ALSO READ- DRT CHANDIGARH PUNJAB HARYANA HIMACHAL PRADESH J&K
ORDER-
The writ petition was therefore disposed off by the court and the DRAT was asked to pass an order with regards the application filed by the Petitioner.
This post was written by Haritha Dhinakaran.
For case specific advice, please contact best top expert DRT Debt recovery Bancktrupcy Chandigarh Bench Lawyers Advocate in Punjab Haryana Panchkula Mohali Zirakpur Derabassi Mullanpur etc.
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