# M/s Sai Enterprises & Ors v. Debts Recovery Appellate Tribunal, JL Nehru Road, Tagore Town, Alld. & Anr

- **Citation:** (2023) 3 ILRA 310
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-03-17
- **Case number:** Writ C No. 7439 of 2023
- **Bench:** Pankaj Bhatia
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-sai-enterprises-ors-v-debts-recovery-appellate-tribunal-jl-nehru-road-49801
- **Pages:** 6

## Headnote

Debts and Bankruptcy Act, 1993 - S. 21 -
Statutory appeal - Rider of pre-deposit -
Noncompliance thereof - Effect - Phrase
'Shall not be entertained' - Scope - Held,
Tribunal
is
barred
from
adjudicating/
deciding/applying its mind to the the appeal
and the petitioner/ appellant would not be
entitled to any benefit which accrue in
terms of the Act only on the ground of filing
of appeal as the appeal technically has not
even been entertained, if the deposit is not
made - The only benefit of filing an appeal
without
the
mandatory
deposit
under
Section 21 will be that the appellant would
be entitled to the benefit of limitation and
nothing more. (Para 7 and 8)
Writ petition allowed . (E-1)

List of Cases cited :-

## Text

310 INDIAN LAW REPORTS ALLAHABAD SERIES
15.04.2004 & 16.05.2008 are liable to be
set aside and are hereby set aside.

24. Consequences to follow.

25. In view of the discussion made
hereinabove, the present writ petition is
allowed.
----------
(2023) 3 ILRA 310
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.03.2023

BEFORE

THE HON'BLE PANKAJ BHATIA, J.

Writ C No. 7439 of 2023

M/s Sai Enterprises & Ors. ...Petitioners
Versus
Debts Recovery Appellate Tribunal, JL
Nehru Road, Tagore Town, Alld. & Anr.
 ...Respondents

Counsel for the Petitioners:
Sri Sanjay Kumar Gupta

Counsel for the Respondents:
Sri Pashupati Nath Tripathi

A. Practice and Procedure - Recovery of
Debts and Bankruptcy Act, 1993 - S. 21 -
Statutory appeal - Rider of pre-deposit -
Noncompliance thereof - Effect - Phrase
'Shall not be entertained' - Scope - Held,
Tribunal
is
barred
from
adjudicating/
deciding/applying its mind to the the appeal
and the petitioner/ appellant would not be
entitled to any benefit which accrue in
terms of the Act only on the ground of filing
of appeal as the appeal technically has not
even been entertained, if the deposit is not
made - The only benefit of filing an appeal
without
the
mandatory
deposit
under
Section 21 will be that the appellant would
be entitled to the benefit of limitation and
nothing more. (Para 7 and 8)
Writ petition allowed . (E-1)

List of Cases cited :-

1. Ananthesh Bhakta Vs Nayana S Bhakta;
(2017) 5 SCC 185

(Delivered by Hon'ble Pankaj Bhatia, J.)

1. The present petition has been filed
by the petitioner challenging the order
dated 03.01.2023 whereby the restoration
application filed by the petitioner has been
rejected on the ground of limitation.

2. The facts in brief are that the
proceedings
were
initiated
by
the
respondent Bank against the petitioner
before the Debts Recovery Tribunal, Patna
which was decided against the petitioner.
Against the order of DRT, Patna, the
petitioner preferred an Appeal before the
Debts
Recovery
Appellate
Tribunal,
Allahabad, however, the petitioner had not
made any deposit along with the appeal as
is required under Section 21 of The
Recovery of Debts and Bankruptcy Act,
1993.

3. From the documents as on record, it
appears that the petitioner was granted time
to make the deposit, however, he has not
deposited which led to the dismissal of the
appeal. Subsequently, when the petitioner
arranged
the
funds,
he
moved
an
application for deposit of an amount of
Rs.20,00,000/- and sought recall of the
order dated 21.01.2020 whereby the appeal
was dismissed for want of pre-deposit and
prayed that the said order be recalled and
decided
on
merit.
The
said
recall
application has been dismissed by means of
the impugned order dated 03.01.2023
mainly on the ground that the restoration
application has been filed after expiry of
3 All. M/s Sai Enterprises & Ors. Vs. Debts Recovery Appellate Tribunal, JL Nehru Road,
 Tagore Town, Alld. & Anr.
311
two and a half years and the same is highly
belated.

4. The contention of the Counsel for
the petitioner Shri Sanjay Kumar Gupta, is
that under the Act in question, there is a
provision of filing of an appeal as
contained under Section 21 of the RDB
Act. 1993. He argues that condition
specified in Section 21 is only for
entertaining the Appeal and the provisions
of said does not provide any power to the
DRAT to direct the pre-deposit and in any
case, even if, no deposit is made, as
specified in Section 21, the appeal cannot
be dismissed. The only effect of Section 21
of the RDB Act, 1993 is that the appeal
would not be entertained unless the deposit
as required is made. Before discussing the
said controversy, it
is necessary to
reproduce the said Section 21 of the RDB
Act, which is as under:

"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 fifty 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, reduce the amount to be deposited
by such amount which shall not be less
than twenty-five per cent. of the amount of
such debt so due to be deposited under this
section."

5. On a plain reading of Section 21, it is
clear that it provides for a statutory appeal,
with a rider that the appeal can not be
entertained, if the deposit, as specified,
subject to the exercise of powers under the
proviso, is not made.

6. The phrase "shall not be entertained",
came up for consideration in various
judgments of Supreme Court as the said
expression is used in many statutes. The
Supreme Court in the Judgment of Ananthesh
Bhakta vs. Nayana S Bhakta (2017) 5 SCC
185 considered the meaning of the said
expression and laid as under.

"20. There is one another aspect of
the matter which is sufficient to uphold the
order of the District Judge. Section 8(2) uses
the phrase "shall not be entertained". Thus,
what is prohibited is the entertainment of the
application unless it is accompanied by the
original arbitration agreement or a duly
certified copy thereof.

21. The word "entertained" has
specific meaning in P. Ramanatha Aiyar's
Advanced
Law
Lexicon.
The
word
"entertained" has been defined as:

"Entertain.--(1) To bear in mind or
consider; esp., to give judicial consideration
to (the court then entertained motions for
continuance). (2) To amuse or please. (3) To
receive (a person) as a guest or provide
hospitality to (a person).

The expression "entertain" means
to "admit a thing for consideration" and
when a suit or proceeding is not thrown out
in limine but the court receives it for
consideration and disposal according to law
it must be regarded as entertaining the suit or
proceeding, no matter whatever the ultimate
decision might be."

22. The Black's Law Dictionary
also defines this word "entertain" as follows:

"entertain, vb. (1) To bear in
mind or consider; esp., to give judicial
consideration to
312 INDIAN LAW REPORTS ALLAHABAD SERIES

23. In Hindusthan Commercial
Bank Ltd. v. Punnu Sahu [Hindusthan
Commercial Bank Ltd. v. Punnu Sahu,
(1971) 3 SCC 124] , the word "entertained"
came for consideration as occurring in
Order 21 Rule 90 proviso of the Civil
Procedure Code. Para 2 of the judgment
notices the amended proviso which was to
the following effect: (SCC p. 125)

"2. The amended proviso with
which we are concerned in this appeal
reads thus:

''Provided that no application to
set aside a sale shall be entertained--

(a) upon any ground which could
have been taken by the applicant on or
before the date on which the sale
proclamation was drawn up; and

(b) unless the applicant deposits
such amount not exceeding twelve-and-half
per cent of the sum realised by the sale or
furnishes such security as the court may, in
its discretion, fix except when the court for
reasons to be recorded dispenses with the
requirements of this clause:

Provided further that no sale
shall be set aside on the ground of
irregularity or fraud unless upon the facts
proved the court is satisfied, that the
applicant has sustained substantial injury
by reason of such irregularity or fraud.'"

24.
The
contention
of
the
appellant in Punnu Sahu case [Hindusthan
Commercial Bank Ltd. v. Punnu Sahu,
(1971) 3 SCC 124] was that the word
"entertain" refers to initiation of the
proceedings and not to the stage when the
court
takes
up
the
application
for
consideration. The High Court had rejected
the said contention. The above view of the
High Court was approved by this Court in
para 4 of the judgment. Following was
stated: (SCC pp. 125-26)

"4. Before the High Court it was
contended on behalf of the appellant and
that contention was repeated in this Court,
that clause (b) of the proviso did not govern
the present proceedings as the application
in question had been filed several months
before that clause was added to the proviso.
It is the contention of the appellant that the
expression "entertain" found in the proviso
refers to the initiation of the proceedings
and not to the stage when the Court takes
up the application for consideration. This
contention was rejected by the High Court
relying on the decision of that Court in
Kundan Lal v. Jagan Nath Sharma
[Kundan Lal v. Jagan Nath Sharma, 1962
SCC OnLine All 38 : AIR 1962 All 547] .
The same view had been taken by the said
High Court in Dhoom Chand Jain v.
Chaman Lal Gupta [Dhoom Chand Jain v.
Chaman Lal Gupta, 1962 SCC OnLine All
29 : AIR 1962 All 543] and Haji Rahim
Bux and Sons v. Firm Samiullah and Sons
[Haji Rahim Bux and Sons v. Firm
Samiullah and Sons, 1962 SCC OnLine All
156 : AIR 1963 All 320] and again in
Mahavir Singh v. Gauri Shankar [Mahavir
Singhv. Gauri Shankar, 1963 SCC OnLine
All 221 : AIR 1964 All 289]. These
decisions have interpreted the expression
"entertain" as meaning "adjudicate upon"
or "proceed to consider on merits". This
view of the High Court has been accepted
as correct by this Court in Lakshmiratan
Engg. Works Ltd. v. CST[Lakshmiratan
Engg. Works Ltd. v. CST, AIR 1968 SC 488]
. We are bound by that decision and as such
we are unable to accept the contention of
the appellant that clause (b) of the proviso
did not apply to the present proceedings."

25. Another relevant judgment is
Martin and Harris Ltd. v. Addl. District
Judge [Martin and Harris Ltd. v. Addl.
District Judge, (1998) 1 SCC 732] . In the
above case Section 21(1) proviso of the
U.P. Urban Buildings (Regulation of
Letting, Rent and Eviction) Act, 1972 (13 of
3 All. M/s Sai Enterprises & Ors. Vs. Debts Recovery Appellate Tribunal, JL Nehru Road,
 Tagore Town, Alld. & Anr.
313
1972)
word
"entertain"
came
for
consideration. The proviso to Section 21(1)
was to the following effect: (SCC p. 741,
para 8)

"8. ... ''Provided that where the
building was in the occupation of a tenant
since before its purchase by the landlord,
such purchase being made after the
commencement of this Act, no application
shall be entertained on the grounds,
mentioned in clause (a) unless a period of
three years has elapsed since the date of
such purchase and the landlord has given a
notice in that behalf to the tenant not less
than six months before such application,
and such notice may be given even before
the expiration of the aforesaid period of
three years:'

26. In the above case, the
application under Section 21(1) was filed
by the landlord before expiry of period of
three years from the date of purchase. It
was held by this Court that word
"entertained" as employed in the first
proviso under Section 21(1) could not mean
"institution" of such proceedings. In paras
9 and 10, following was laid down: (Martin
and Harris case [Martin and Harris Ltd. v.
Addl. District Judge, (1998) 1 SCC 732] ,
SCC pp. 744-46)

"9. Even that apart there is an
internal indication in the first proviso to
Section 21(1) that the legislature has made
a clear distinction between "entertaining"
of an application for possession under
Section 21(1)(a) of the Act and "filing" of
such application. So far as the filing of
such application is concerned it is clearly
indicated by the legislature that such
application cannot be filed before expiry of
six months from the date on which notice is
given by the landlord to the tenant seeking
eviction under Section 21(1)(a) of the Act.
The words, "the landlord has given a notice
in that behalf to the tenant not less than six
months before such application", would
naturally mean that before filing of such
application or moving of such application
before the prescribed authority notice must
have preceded by at least six months.
Similar terminology is not employed by the
legislature in the very same proviso so far
as three years' period for entertaining such
application on the grounds mentioned in
clause (a) of Section 21(1) a stage must be
reached when the court applied its judicial
mind and takes up the case for decision on
merits
concerning
the
grounds
for
possession mentioned in clause (a) of
Section 21(1) of the Act. Consequently on
the very scheme of this Act it cannot be said
that the word "entertain" as employed by
the legislature in the first proviso to Section
21(1) of the Act would mean "institution" of
such proceedings before the prescribed
authority or would at least mean taking
cognizance of such an application by the
prescribed authority by issuing summons
for appearance to the defendant-tenant. It
must be held that on the contrary the term
"entertain" would only show that by the
time the application for possession on the
grounds mentioned in clause (a) of Section
21(1) is taken up by the prescribed
authority for consideration on merits, at
least minimum three years' period should
have elapsed since the date of purchase of
the premises by the landlord.

10.
...
The
learned
Senior
Counsel, Shri Rao, for the appellant then
invited our attention to two decisions of this
Court in Lakshmiratan Engg. Works Ltd. v.
CST [Lakshmiratan Engg. Works Ltd. v.
CST, AIR 1968 SC 488] and Hindusthan
Commercial Bank Ltd. v. Punnu Sahu
[Hindusthan
Commercial
Bank
Ltd.
v.Punnu Sahu, (1971) 3 SCC 124]. In
Lakshmiratan Engg. [Lakshmiratan Engg.
Works Ltd. v. CST, AIR 1968 SC 488] this
Court was concerned with the meaning of
314 INDIAN LAW REPORTS ALLAHABAD SERIES
the word "entertain" mentioned in the
proviso to Section 9 of the U.P. Sales Tax
Act, 1948. Hidayatullah, J., speaking for
the Court observed in the light of the
statutory scheme of Section 9 of the said
Act that the direction to the Court in the
proviso to Section 9 was to the effect that
the Court shall not proceed to admit to
consideration an appeal which is not
accompanied by satisfactory proof of the
payment of the admitted tax. In Hindusthan
Commercial
Bank
[Hindusthan
Commercial Bank Ltd. v. Punnu Sahu,
(1971) 3 SCC 124] the term "entertain" as
found in the proviso to Order 21 Rule 90 of
the Code of Civil Procedure (CPC) fell for
consideration of the Court. Hegde, J.,
speaking for a Bench of two learned Judges
of this Court in this connection observed
that the term "entertain" in the said
provision means "to adjudicate upon" or
"to proceed to consider on merits" and did
not mean "initiation of proceeding". The
aforesaid decisions, in our view, clearly
show that when the question of entertaining
an application for giving relief to a party
arises and when such application is based
on any grounds on which such application
has to be considered, the provision
regarding "entertaining such application"
on any of these grounds would necessarily
mean the consideration of the application
on the merits of the grounds on which it is
base. In the present case, therefore, it must
be held that when the legislature has
provided that no application under Section
21(1)(a) of the Act shall be entertained by
the
prescribed
authority
on
grounds
mentioned in clause (a) of Section 21(1) of
the Act before expiry of three years from
date of purchase of property by the
landlord
it
must
necessarily
mean
consideration by the prescribed authority of
the grounds mentioned in clause (a) of
Section 21(1) of the Act on merits."

27. In the present case as noted
above, the original retirement deed and
partnership
deed
were
filed
by
the
defendants on 12th May and it is only after
filing of the original deeds that the court
proceeded to decide the application IA No.
IV.

28. Section 8(2) has to be
interpreted to mean that the court shall not
consider any application filed by the party
under Section 8(1) unless it is accompanied
by the original arbitration agreement or
duly certified copy thereof. The filing of
the application without such original or
certified
copy,
but
bringing
original
arbitration agreement on record at the time
when
the
court
is
considering
the
application shall not entail rejection of the
application under Section 8(2).

29. In the present case it is
relevant to note that the retirement deed
and partnership deed have also been relied
upon by the plaintiffs. Hence, the argument
of the plaintiffs that the defendants'
application IA No. IV was not accompanied
by the original deeds, hence, liable to be
rejected, cannot be accepted. We are thus of
the view that the appellants' submission
that the application of the defendants under
Section 8 was liable to be rejected, cannot
be accepted."

7. Thus what transpires from the
plain reading of Section 21, the phrase
"shall not be entertained" used therein
and the law as explained by Supreme
Court and as recorded above it is clear
that
the
Tribunal
is
barred
from
adjudicating/ deciding/ applying its mind
to the the appeal and the petitioner/
appellant would not be entitled to any
benefit which accrue in terms of the Act
only on the ground of filing of appeal as
the appeal technically has not even been
entertained, if the deposit is not made.
3 All. Smt. Sheela Sachdeva & Ors. Vs. State of U.P. & Ors.
315

8. The interesting question that arises
is whether the appeal can be dismissed
only on the ground that the same is
without the mandatory pre-deposit? From
the
law
with
regards
to
bar
of
entertainment of appeal as explained
above, it is clear that what cannot be
entertained cannot be dismissed either.
The only benefit of filing an appeal
without the mandatory deposit under
Section 21 will be that the appellant
would be entitled to the benefit of
limitation and nothing more and the Bank
or the Financial Institution would be at
liberty to initiate and prosecute recovery
proceedings against the borrower.

9. In the present case the DRAT has
erred in law rejecting the application only
on the ground of inordinate delay. From
the order, it is clear that the appeal is
dismissed for want of pre-deposit which
action of the Tribunal itself is bad, as for
want
of
pre-deposit,
the
appeal
technically could not be entertained and
thus could not be dismissed either.

10. The Counsel for the respondent
Bank, Sri P.N. Tripathi argues that the
petitioner has not paid the dues and is
adopting dilatory tactic and when steps
were taken to recover the dues of the
Bank, he made the application after
depositing the amount as stated above.

11. In view of the said rival
submission, coupled with the fact that
the issue raised in the present writ
petition pertains to the interpretation of
Section 21 of the RDB Act, 1993, I am
not inclined to keep the matter pending,
as such, the order impugned dated
03.01.2023 is set aside with directions to
the Appellate Tribunal to hear and
decide
the
appeal
on
merit,
in
accordance with law, with all expedition,
preferably within a period of four
months from the date of production of
certified copy of this order.

12.
It
is
provided
that
no
unnecessary adjournment shall be granted
to either of the parties.

13. The amount of Rs.20,00,000/- in
the form of demand draft(prepared but
not accepted by DRAT ) shall be
deposited within two weeks from today.

14. It will also be open to the
petitioner to approach the respondent
Bank for any settlement in accordance
with law, if so advised.

16. The writ petition is allowed.
----------
(2023) 3 ILRA 315
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 24.02.2023

BEFORE

THE HON'BLE SUNEET KUMAR, J.
THE HON'BLE RAJENDRA KUMAR-IV, J.

Writ C No. 10292 of 2007

Smt. Sheela Sachdeva & Ors. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Sanjeev Kumar, Sri S.K. Singh, Sri S.K.
Srivastava, Sri Sanjeev Singh, Sri Shashi
Nandan, Sri Rajesh Shukla, Sri Ravi Kant
(Sr. Advocate). Sri K.N. Tripathi (Sr.
Advocate)

Counsel for the Respondents:
C.S.C., Addl. Advocate General, Dr. Y.K.
Srivastava