KERALA FINANCIAL CORPORATION Vs. UNION BANK OF INDIA

JUDGEMENT

(1.) THE Petitioners Kerala State Industrial Development Corporation Ltd. and Kerala Financial Corporation 5th and 6th defendants in the Tribunal below have filed these Petitions under Section 21 of the Recovery of Debts Due to Banks and Financial Institutions (RDDB&FI) Act, 1993 (the Act) for waiver of mandatory deposit of the 75% of the decreed amount.

(2.) These petitioners contend that they advanced loans to the 1st defendant in the applicption and the title deeds which relate to immovable property of the 1st defendant were deposited with the petitioners creating joint equitable mortgage and the plant A Schedule property were jointly mortgaged by the said company under the pari passu inter se arrangement between the financial institutions and accordingly it was agreed between the petitioners appellants and the, respondent institutions that the mortgaged properties shall be distributed in proportion or in the ratio of 80:60:28 between the petitioners and the Union Bank of India-plaintiff in the Application (1st respondent-Bank).

(3.) THE petitioners further contend that the learned Presiding Officer, Debt Recovery Tribunal had erroneously ordered in favour of the applicant Bank to have charge over the properties at the ratio of 80:60:71.5 instead of at the ratio of 80:60:28 and the respondent Bank cannot have charge over the mortgaged properties in respect of the loan advanced released subsequently and the petitioners appellants are not the borrower and no recovery certificate was issued or mortgage decree was passed as against the petitioners and the petitioners Corporations' interest has been adversely affected by virtue of order passed with respect to the ratio of charge over mortgaged properties and as the petitioner is neither a borrower nor recovery certificate has been issued the petitioner need not deposit the 75% of the decreed amount to file the appeal and the mandatory provisions of Section 21 of the Act do not apply to the facts and circumstances of the case and so he is entitled to the waiver of mandatory deposit of 75% of the decreed amount.