# Gopal Ji Gupta v. Debt Recovery Appellate Tribunal & Ors

- **Citation:** (2013) 2 ILRA 1109
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2013-07-09
- **Case number:** Civil Misc. Writ Petition No.36314 of 2013
- **Bench:** Tarun Agarwala
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/gopal-ji-gupta-v-debt-recovery-appellate-tribunal-ors-42569
- **Pages:** 3

## Headnote

Sri V.K Srivastava, Sri Yashwant Singh

Securtization
and
Reconstruction
of
Financial Assests
and
Enforcement
of
Security
Interest
Act,2002-Section
18-
appeal against order debt recovery tribunalcondition of 50 % deposit-as per 2nd
proviso-Bank
already
recovered
Rs.
50,11,847/-
against
demand
of
Rs.
60,65,380/-further deposited Rs. 2,65000/-
before filing appeal-held-once liability not
fixed by Tribunal-against demand notice
more than 50% already recovered during
auction sale-no further amount payableorder passed by Appellate Tribunal set-aside-with direction to entertain appeal
without pre-deposit condition.

Held: Para-12
The Court is of the opinion that there was
no requirement for the petitioner to deposit
any further amount for entertainment of his
appeal under the second proviso to Section
18 of the Act of 2002.
Case Law discussed:
2010(3) Banker's Journal 9

## Text

2 All] Gopal Ji Gupta Vs. Debt Recovery Appellate Tribunal & Ors.

1109
months time to the petitioner to vacate the
premises, in case if the petitioner gives
and undertaking before the court below.

18. In the result, the writ petition
fails and is dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 09.07.2013

BEFORE
THE HON'BLE TARUN AGARWALA, J.

Civil Misc. Writ Petition No.36314 of 2013

Gopal Ji Gupta

 ...Petitioner
Versus
Debt Recovery Appellate Tribunal & Ors.
 ....Respondents

Counsel for the Petitioner:
Sri Deepak K. Jaiswal, Sri Sanjay Kumar
Gupta

Counsel for the Respondents:
Sri V.K Srivastava, Sri Yashwant Singh

Securtization
and
Reconstruction
of
Financial Assests
and
Enforcement
of
Security
Interest
Act,2002-Section
18-
appeal against order debt recovery tribunalcondition of 50 % deposit-as per 2nd
proviso-Bank
already
recovered
Rs.
50,11,847/-
against
demand
of
Rs.
60,65,380/-further deposited Rs. 2,65000/-
before filing appeal-held-once liability not
fixed by Tribunal-against demand notice
more than 50% already recovered during
auction sale-no further amount payableorder passed by Appellate Tribunal set-aside-with direction to entertain appeal
without pre-deposit condition.

Held: Para-12
The Court is of the opinion that there was
no requirement for the petitioner to deposit
any further amount for entertainment of his
appeal under the second proviso to Section
18 of the Act of 2002.
Case Law discussed:
2010(3) Banker's Journal 9

(Delivered by Hon'ble Tarun Agarwala, J.)

1. Heard Sri Deepak Kumar Jaiswal,
the learned counsel for the petitioner and
Sri V.K. Srivastava, the learned counsel
for the respondent-bank.

2. With the consent of the learned
counsel for the parties, the writ petition is
being decided at the admission stage itself
without calling for any counter affidavit,
since no factual controversy is involved in
the present writ petition.

3. The petitioner is a guarantor to a
loan taken by M/s Ganpati Traders, who
defaulted in the payment of the loan.
Accordingly, the bank issued a notice
under Section 13(2) of the Securitization
and Reconstruction of Financial Assets
and Enforcement of Security Interest Act,
2002 (hereinafter referred to as the Act of
2002) and thereafter, issued a notice
under Section 13(4) of the Act of 2002 for
taking possession of the property of the
guarantor, pursuant to which possession
was taken and the property of the
guarantor was put to auction. It has come
on record, that pursuant to the auction, a
sum of Rs.50,11,847/- has been realized
towards the loan amount.

4. The petitioner, being aggrieved by
the issuance of the notice bank under
Section 13(4) of the Act of 2002, filed an
application under Section 17 of the Act of
2002 before the Debts Recovery Tribunal
praying that the possession be restored in
his favour. This application was rejected
by the Tribunal, against which the
petitioner preferred an appeal under
Section 18 of the Act of 2002.
1110 INDIAN LAW REPORTS ALLAHABAD SERIES [2013

5. Section 18 of the Act of 2002
requires that any person aggrieved by an
order of the Debts Recovery Tribunal
could prefer an appeal provided he
deposits 50% of the amount of debt due
from him as claimed by the secured
creditor or determined by the Debts
Recovery Tribunal, whichever is less. The
petitioner by his own calculation filed an
application for waiver of the 50% to 25%
as per the second proviso of Section 18 of
the Act of 2002 along with a bank draft of
Rs.2.65 lacs and prayed that suitable
orders may be passed for waiving the
balance amount and entertaining the
appeal. The said application was rejected
by the Debts Recovery Appellate Tribunal
by the impugned order. The petitioner,
being aggrieved by the said order, has
filed the present writ petition.

6. The Appellate Tribunal held that
50% of the amount demanded by the bank
has to be deposited irrespective of the
recovery so made by the bank by way of
auction.

7. Having heard the learned counsel
for the parties and having perused the
impugned order, the Court finds it strange
that the bank is demanding Rs.94,08,777/-
along with future interest but the possession
notice issued under Section 13(4) of the Act
of 2002 indicates that the bank had
demanded a sum of Rs.60,65,380.90 along
with future interest. The Court is of the
opinion that the amount indicated in the
notice under Section 13(4) of the Act of
2002 can only be made the basis for the
purpose of filing the appropriate deposit in
an appeal under Section 18 of the Act of
2002, inasmuch as the petitioner had
questioned the said notice before the Debts
Recovery Tribunal. The contention of the
respondent bank's counsel that 50% of
Rs.94,08,777/- has to be deposited is
erroneous.

8. The second proviso to Section 18
of the Act of 2002 is relevant for the
purpose of deciding the appeal. For
facility, the said provision is extracted
hereunder:

"18. Appeal to Appellate Tribunal.--
(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
within thirty days from the date of receipt
of the order of Debts Recovery Tribunal.

[Provided that different fees may be
prescribed for filing an appeal by the
borrower or by the person other than the
borrower:]

[Provided further that no appeal shall
be entertained unless the borrower has
deposited with the Appellate Tribunal
fifty per cent of the amount of debt due
from him, as claimed by the secured
creditors or determined by the Debts
Recovery Tribunal, whichever is less]

Provided also 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.]"

9. A perusal of the said provision
indicates that 50% of the amount of the
debt due from him as claimed by the
secured creditors or determined by the
Debts Recovery Tribunal has to be
deposited by the person who challenges
the order of the Debts Recovery Appellate
Tribunal.
2 All] Kailash Nath Vs. State of U.P. and Ors.

1111

10. In the instant case, no amount as
yet has been determined by the Debts
Recovery Tribunal and the petitioner has
only questioned the possession notice
issued by the bank under Section 13(4) of
the Act of 2002, which indicates that an
amount of Rs.60,65,380.90 was required
to be deposited by the petitioner at the
time of filing the appeal.

11. In the instant case, the Court
finds that the respondent bank had
auctioned the property of the petitioner
and
has
recovered
a
sum
of
Rs.50,11,847/-, which is more than the
50% of the total amount sought to be
recovered. The proviso to Section 18 of
the Act of 2002 restricts the entertainment
of the appeal unless the borrower deposits
50% of the amount of debt due from him
as claimed by the secured creditors. Since
more than Rs.50 lacs has already been
realized by the secured creditor, namely,
the bank, which is more than 50% of the
debt due from the petitioner, the purpose
of the proviso stands satisfied.

12. The Court is of the opinion that
there was no requirement for the
petitioner to deposit any further amount
for entertainment of his appeal under the
second proviso to Section 18 of the Act of
2002.

13. In the light of the aforesaid, the
decision cited by the respondent-bank in
the case of Indian Bank Vs. M/s. BLue
Jaggers Estates Ltd. and others, 2010
(3)
Bankers'
Journal
9
has
no
application to the present set and
circumstances of the case.

14. For the reasons stated aforesaid,
the impugned order cannot be sustained
and is quashed. The writ petition is
allowed. The Debts Recovery Appellate
Tribunal is directed to entertain the appeal
without any pre-condition of deposit and
decide the appeal on merits in accordance
with law.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.07.2013

BEFORE
THE HON'BLE SATYA POOT MEHROTRA,
J.
THE HON'BLE ANJANI KUMAR MISHRA, J.

Civil Misc. Writ Petition No.36609 of 2013

Kailash Nath

 ...Petitioner
Versus
State of U.P. and Ors.
 ...Respondents

Counsel for the Petitioner:
Sri B.P. Singh, Sri Ashok Malviya

Counsel for the Respondents:
C.S.C.

Constitution
of
India,
Art.-226-
Cancellation of fair price shop licencepetitioner submitted explanation after
expiry of period-hence authority refused
to
consider
the
same-direction
to
consider the explanation if it is filed
within
3
weeks-take
appropriate
decision within 6 weeks thereafterpetition disposed of.

Held: Para-
Having
regard
to
the
facts
and
circumstances of the case and having
considered the submissions made by the
learned counsel for the parties, we are of
the view that the interest of justice
would be subserved by disposing of the
Writ
Petition
with
the
following
directions

1. Within three weeks from the date of
receipt of certified copy of this order, the
petitioner will submit his explanation