While allowing the appeal on 2nd March 2020 the court had granted time up to 20th March 2020 to the applicant to deposit the leftover amount. However, due to lockdown and closure of commercial activities on account of coronavirus the applicant could not deposit the sum within the time so granted by this court.
After that, considering an application seeking an extension of time to deposit the remaining amount the court had passed the following order on 20th March 2020,
"Application for extension of time is allowed. The applicant is directed to deposit the remaining amount before 30th April 2020 no further extension shall be granted, MA stands disposed accordingly"
The learned senior advocate Mr Dushyant Dave appearing for the applicant submits that the situation as it is obtained on 20th March 2020 when the court was pleased to extend the time continues and as such the applicant is unable to deposit the sum within the time granted by the court, therefore, he seeks further extension of time.
It shows that the successful bidder's field review petitions before the High Court praying that the high court could not have issued directions that no pre-deposit was required. Vide order dated 16th December 2019 the High Court dismissed the revised petition and the important observation of the high court.
The learned counsel for the appellant Mr OP Gaggar submitted that the order of the high court is not against the provisions of the Act but also the law laid down by the court.
Article 226 of the Constitution of India while holding that it is not required to make predeposit. He also submits that the respondents no 1 is not a borrower and finally submits that the main ground is that since the amount offered by the highest bidder is below the value of the property the DRAT is entitled to entertain the appeal without deposition of any amount. It is said that the value of the property is about Rs 160 crore and even the value as per the circle rate is about Rs 120 crores but the same has been sold for a pittance of Rs 65.52 crores he also said that there is collusion between the employees of the bank and the successful bidders.
It is made clear that they are not going into any advantages of the case because it is agreed with the high court that the matter must be decided by the DRAT. The only problem is whether the high court was right in holding that no pre-deposit was necessary.
Section 18 of the SARFAEESI Act is read as follows:
1) Any person aggrieved by any order made by the Debts Recovery Tribunal under section 17 may prefer an appeal along with such fee as may be prescribed to an Appellate Tribunal with thirty days from the date of receipt of orders of debts recovery Tribunal
Provided further that no appeal shall be entertained unless the borrowers have deposited with the Appellate Tribunal fifty per cent of the mounting debt due from him as said by the secured creditors or determined by the Debts Recovery Tribunal whichever is less. It is also provided that the. Appellate Tribunal may for the reasons to be recorded in writing, reduce the amount of not less than twenty-five per cent of debt referred to in the second provision.
The Court in the case of Narayan Chandra Ghosh vs UCO Bank & Ors held that keeping in view the languages of section even if the amount of debt due hard not been determined by the DRT the appeal would not be entertained by the DRAT without forcing on the pre-deposit.
Given the law laid down by the court, it is clearly of the view that the observation made by the High Court was incorrect.
It is not in the agreement with the submission of Mr Chaudhari that the High Court has exercised its discretionary power under Article 226 of the constitution the order of the high court does not shoe any exercise of such discretionary powers but according to the high court on an interpretation of the section pre-deposit was not required. A guarantor or a mortgagor who has mortgaged it's properly to secure the repayment of the loan stands on the equal footing as a borrower.
Given the discussion both the orders were set aside dated 25th November 2019 and 16th November 2019 of the high court In so far as they hold that pre-deposit is not required and allow the appeals. It is reiterated that they have not gone into the advantages of the contentions raised by the parties which shall be decided by the DRAT when it entertains the appeal and is called upon to do the time is extended given to auction purchasers respondent nos 2 and 3 to deposit the balance of the sale amount till 20th March, 2020.
Pending application if any stands disposed off.