Decided on September 16,2011

Goldy Fin Agro Cotton Pvt. Ltd. And Ors. Appellant
State Bank of India And Anr. Respondents


R.K. Gupta, J. (Chairperson) - (1.) THE Counsel for the parties are heard on the question of waiver. This is an Appeal preferred under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 challenging the order passed by the Debts Recovery Tribunal on 29th July, 2011. According to the appellants the total liability is of Rs. 4,42,64,622.00 as on 9th October, 2010. Along with the appeal, the appellant has not deposited even 25% of the total amount of the debt which was recoverable. It was contended on behalf of the appellants that the appellants have only deposited a sum of Rs. 25.00 lacs. The 25% of the total dues comes approximately to Rs. 1.11 crores. The Section 18 of the SARFAESI Act, 2002 relates to the appeal to the Appellate Tribunal and the second proviso appended to the same provides that no appeal shall be entertained by the Appellate Tribunal unless the borrower has deposited with the Appellate Tribunal 50% of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less. The 3rd proviso appended to Section 18 prescribes 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. The appellant even today has not deposited 25% of the amount which is recoverable from him and claimed by the respondent -Bank. The Apex Court in Narayan Chandra Ghosh v. U.C.O. Bank,, 4 (2011) SLT 229 :, 2 (2011) CLT 355 (SC) :, 2011 (2) Bank C.L.R. 368 (SC), in para Nos. 8 and 9 of the judgment has already interpreted Section 18 of the SARFAESI Act, 2002 and while interpreting the said section the Apex Court has also considered the proviso 2 and 3 appended to Section 18 and, ultimately, come to the conclusion in para No. 9 of the judgment that the condition of pre -deposit being mandatory, a complete waiver of deposit by the appellant with the Appellate Tribunal, was beyond the proviso to the said section. It is noted that as per second proviso, the power to waive the deposit is only vested with the Appellate Tribunal but not less than 25%.
(2.) THE Counsel for the appellant requests for interim relief, without even deposit of amount of 25% of the total dues. The deposit of the 25% of the amount in fact, should have been by the appellant along with the appeal because there is no power vested with the Appellate Tribunal to waive the deposit of amount less than 25%. Thus, the complete waiver is no permissible. In view of Section 18 of SARFAESI Act, 2002 since the amount of 25% is not deposited which is a mandatory deposit therefore, no favourable including the interim relief can be passed in favour of the appellant. However, the matter of interim relief would be considered only after the deposit of 25% and the prayer for interim relief would also be considered only if waiver of the amount not less than 25% is allowed. In proviso 2 of the Section 18 of SARFAESI Act, 2002, it is stated that no appeal shall be "entertained" and the same is to be given effect to the word "entertained" which means to receive and consider. It does not mean that the appeal cannot be received and cannot be filed but it means that no orders cannot be passed to admit for consideration, and merely because the appeal is filed or is received that does not mean that the favourable orders are to be passed. Please also see Kundan Lal v. Jagannath Sharma, : AIR 1962 All. 547, Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner, : AIR 1968 SC 488, M.K. Kunhiraman v. Purameri Service Co -operative Bank Ltd., : (1971) 1 L.L.J. 35, Khatumal Ghanshamdas v. Abdul Qadir Jamaludin, : AIR 1961 MP 295. In view of the interpretation of the word "entertained" it is clear that though the appeal can be filed and received by the office but it cannot be considered for its admission for passing any order on interim relief. In view of the aforesaid, the case be listed after when the appellant deposits 25% of the amount with the Registrar and the Registrar is directed that in further if any appeal is preferred against the final order either by guarantor or by borrower then unless the amount is deposited of 25% such appeal be not registered. Copies of this order be furnished to both the parties as per law. Another copy be also dispatched to the learned DRT forthwith.;

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