Deposit for filing an Appeal in DRAT High Court Petition

Last Updated on January 21, 2021 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.

Neeraj Kumar Vaidya v. Punjab National Bank and Others

NAME OF THE COURT- The High Court of Himachal Pradesh, Shimla

DATE OF DECISION- 26^th 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.

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