SANJIB BANERJEE,J. - (1.) THE legal issue that has arisen is whether the requirement of a pre-deposit to prefer an appeal as recognised in Section 21 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 has to be met in case of every appeal under Section 20 of the Act from every order passed by any Debts Recovery Tribunal if the appellant were a person against whom a money claim is made by a bank or a financial institution or a consortium of banks or financial institutions under the said Act. The matter is of some importance since the answer to the question may have the undesirable effect of opening the floodgates for any or every order of a Debts Recovery Tribunal to be subjected to a frivolous appeal with the oblique motive of stalling the adjudicatory and recovery proceedings before the tribunal.
(2.) THE facts of the present matter are not of much consequence in the context of the legal issue, but need to be noticed only for the purpose of appreciating the circumstances in which the present question arises. The opposite party No.1 bank instituted proceedings under Section 19 of the said Act before a Debts Recovery Tribunal in Kolkata against, inter alia, the petitioners herein. Upon the matter ripening for trial, the petitioners herein applied before the tribunal seeking permission to cross-examine the bank's witness. From the rejection of such application by the tribunal, the petitioners herein sought to prefer an appeal and, for such purpose, applied before the appellate tribunal for waiver of the pre-deposit under Section 21 of the Act. The petitioners insist that such application was required to be filed in keeping with the practice of the appellate tribunal. The appellate tribunal allowed the application by requiring a sum of Rs.3 lakh to be deposited as the condition precedent for entertaining the appeal. A previous petition under Article 227 of the Constitution of India was carried from the appellate order of pre-deposit passed on September 7, 2012. During the pendency of such previous petition, the appellate tribunal accommodated the petitioners on a couple of occasions, but by the order of October 16, 2012 declined to entertain the appeal for the non-compliance of the order for pre- deposit. Both the orders of September 7, 2012 and October 16, 2012 have been assailed in the present proceedings. In the order of September 7, 2012 the appellate tribunal recognised the circumstances in which the appeal was sought to be preferred and noticed that the bank's claim had not been finally adjudicated upon. The appellate tribunal recorded the bank's submission that out of the bank's claim of Rs.29 lakh an amount in excess of Rs.22 lakh was "virtually admitted as due" by the constituents. The appellate tribunal thereafter held as follows: "The appellant is undoubtedly a person from whom, according to the respondent-bank, there is an amount of Rs.29 lacs due. As earlier pointed out, this is not the right stage for this Tribunal to appreciate the various points as raised on behalf of the parties. There is also perhaps no escape and present applicant/appellant is certainly under obligation to make predeposit under section 21 of the DRT Act. "Of course, this Tribunal can waive or reduce the aforesaid amount. Considering all the facts and circumstances, I think interest of justice will be best served if the present application under section 21 of the DRT Act is disposed of with direction upon the applicant/appellant to deposit an amount of Rs.3 lacs by way of predeposit and the same must be made by 25th of September, 2012. In default, the appeal cannot be entertained."
(3.) BEFORE the legal position on the issue that has arisen is ascertained, it is necessary, at the outset, that the relevant provisions of the statute be noticed: "2. Definitions.- ... (g) "debt" means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application; ..." "17. Jurisdiction, powers and authority of Tribunals.- ... (2) An Appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act." "20. Appeal to the Appellate Tribunal.- (1) Save as provided in sub- section (2), any person aggrieved by an order made, or deemed to have been made, by a Tribunal under this Act, may prefer an appeal to an Appellate Tribunal having jurisdiction in the matter. (2) No appeal shall lie to the Appellate Tribunal from an order made by a Tribunal with the consent of the parties. ..." "21. Deposit of amount of debt due, on filing appeal.- Where an appeal is preferred by any person from whom the amount of debt is due to a bank or a financial institution or a consortium of banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal seventy-five per cent. of the amount of debt so due from him as determined by the Tribunal under section 19: Provided that the Appellate Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section." ;