Kotak Mahindra Bank Pvt. Limited vs Ambuj A. Kasliwal & Ors.

HELD: 1.1 A perusal of Section 21 of the Recovery of Debts and Bankruptcy Act, 1993 (RDBA) which employs the phrase “appeal shall not be entertained” indicates that it injuncts the Appellate Tribunal from entertaining an appeal by a person from whom the amount of debt is due to the Bank, unless such person has deposited with the Appellate Tribunal, fifty percent of the amount of debt so due from him as determined by the Tribunal under Section 19 of the Act. The proviso to the said Section, however, grants the discretion to the Appellate Tribunal to reduce the amount to be deposited, for reasons to be recorded in writing, but such reduction shall not be less than twenty-five per cent of the amount of such debt which is due. Hence the pendulum of discretion to waive pre-deposit is allowed to swing between fifty per cent and twenty-five per cent of the debt due and not below twenty-five per cent, much less not towards total waiver. It is in that background, keeping in perspective the said provision, the DRAT has in the instant case ordered deposit of fifty per cent of the amount. The respondents No.1 and 2 while seeking waiver of the deposit have essentially projected the case to indicate that the recovery certificate ordered by the DRT is for the sum of Rs.145 Crores with interest at 9% per annum and the amount realised by the Bank from the compensation amount payable to respondent No.3 is itself a sum of Rs.152,81,07,159/- and as such there is no debt due. [Para 10][1008-E-H; 1009-A-B]

1.2 The High Court has proceeded at a tangent while adverting to the aspect of recovery made towards the loan amount from the land acquisition compensation payable to respondent No.3. The conclusion appears to be that the receipt of the compensation amount even though was before passing of the decree, would wipe out the decretal amount of Rs.145 Crores with interest at 9% per annum, though it has not been expressly stated so. Per contra, the DRAT by its order dated 27.02.2019 while directing the pre--deposit of fifty per cent of the amount had taken note of the fact that if the decretal amount as ordered by the DRT is taken into consideration and the amount received by the Bank towards the compensation amount is credited, the balance of the decretal amount payable by respondents No.1 to 3 would work out to Rs.68,18,92,841/-. It is in that view, the DRAT has ordered pre-deposit of fifty per cent of the said amount which still remains to be a debt due. On that aspect, though the ultimate correctness of the actual amount due is a matter for calculation to be made in the execution proceedings, for the present, for the purpose of pre-deposit if the decree/recovery certificate issued by the DRT is taken into consideration the position is clear that even if the amount of compensation is appropriated, either before or after the decree, there would still be outstanding amount payable which would be the subject matter of the appeal in DRAT, apart from the fact that the appellant Bank in their appeal are claiming the entire amount which has fallen due since the terms of settlement was not adhered to. [Para 12][1009-F-H; 1010-AD]

1.3 When prima facie it was taken note by the DRAT that further amount was due and the pre-deposit was ordered, without finding fault with such conclusion the High Court was not justified in setting aside the orders passed by the DRAT. All that the High Court has concluded is that the benefit of the receipt of Rs.152,81,07,159/- as against the decretal amount cannot be denied though it was received before passing of the final judgment. Such conclusion in any event could not have tilted the balance in favour of the respondents No.1 and 2 to waive the entire pre-deposit, unless the High Court had rendered a categorical finding that the entire decretal amount stands satisfied from such receipt and there was no debt due which in any event was beyond the scope of consideration in a petition of the present nature. On the other hand, the DRAT having taken note of the decretal amount, the receipt of the amount credited as compensation and, having further noted the debt is still due, has directed the pre-deposit limited to that extent. For the present, the amount as indicated in the order passed by the DRAT is take note of. Hence, for the purpose of determining the pre-deposit, the decretal amount due is taken at Rs.68,18,92,841/-.[Paras 13, 16][1010-D-G; 1013-B-C]

1.4 In the facts and circumstances arising herein, when further amount is due and payable in discharge of the decree/recovery certificate issued by the DRT in favour of the appellant/Bank, the High Court does not have the power to waive the predeposit in its entirety, nor can it exercise discretion which is against the mandatory requirement of the statutory provision as contained in Section 21. In all cases fifty per cent of the decretal amount i.e. the debt due is to be deposited before the DRAT as a mandatory requirement, but in appropriate cases for reasons to be recorded the deposit of at least twenty-five per cent of the debt due would be permissible, but not entire waiver. Therefore, any waiver of pre-deposit to the entire extent would be against the statutory provisions and, therefore, not sustainable in law. A total waiver would be against the statutory provisions. The order passed by the High Court is set aside. However, in the instant case, taking note that though the issue relating to the actual amount due is to be considered by the DRAT, keeping in view the fact that the DRT has taken into consideration the earlier settlement and has accordingly decreed the claim to that extent and towards such decree since payment of a major portion is made, though by appropriation of the compensation amount and admittedly since the remaining properties belonging to respondent No.3 is available by way of mortgage and the respondents No.1 and 2 are the personal guarantors, in the peculiar facts and circumstances of this case the respondents no.1 and 2 are permitted to pre-deposit twenty-five per cent of the amount as taken note by the DRAT i.e. twenty-five per cent of Rs.68,18,92,841/-. To the said extent, the order passed by the DRAT is modified. [Paras 14, 17 and 20][1010-G-H; 1011-A-B; 1013-D-G]

Narayan Chandra Ghosh v. UCO Bank and Others

(2011) 4 SCC 548 : [2011] 3 SCR 1024 – relied on.