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Hindustan Home Needs Partnership Firm & Others v/s Drat & Another

Company & Directors' Information:- HINDUSTAN HOME NEEDS PRIVATE LIMITED [Strike Off] CIN = U36999TN1998PTC039894

Company & Directors' Information:- NEEDS (INDIA) PRIVATE LIMITED [Active] CIN = U51909OR2012PTC015188

Company & Directors' Information:- HOME NEEDS PVT LTD [Strike Off] CIN = U36101AS1997PTC005209

Company & Directors' Information:- T S R AND CO HOME NEEDS PRIVATE LIMITED [Active] CIN = U26990TN1985PTC011608

Company & Directors' Information:- R NEEDS PRIVATE LIMITED [Active] CIN = U72900TG2021PTC151432

Company & Directors' Information:- HINDUSTAN CORPORATION PRIVATE LIMITED [Dissolved] CIN = U74900KL1901PTC000424

Company & Directors' Information:- HINDUSTAN LTD. [Active] CIN = U99999MH1917PTC000472

Company & Directors' Information:- HINDUSTAN CORPORATION LIMITED [Dissolved] CIN = U99999MH1949PLC007790

    W.P. No. 2467 of 2020 & W.M.P. No. 2867 of 2020

    Decided On, 04 February 2020

    At, High Court of Judicature at Madras


    For the Petitioners: S. Chandrasekharan, Advocate. For the Respondents: None.

Judgment Text

1. The present writ petition is filed seeking to quash the order of the 1st respondent/Appellate Tribunal dated 6.8.2019 made in AIR. No. 17/2019 and to direct the 2nd respondent to dispose of the appeal on merits without directing the petitioners to make the pre-deposit.2. The 3rd respondent/Bank had initiated recovery proceedings under the provisions of the Recovery of Debts and Bankruptcy Act, 1993 (Amended) by filing an Original Application in OA. No. 222/2017 on the file of the Debts Recovery Tribunal-II at Chennai against the petitioners herein for recovery of a sum of Rs. 80,84,747/- due as on 11.4.2017 with interest at the rate of 14.20% per annum with monthly interest and the said application was opposed and contested by the respondents therein/petitioners herein, by filing a Written Statement.3. During the course of enquiry, on behalf of the 3rd respondent/Bank, Mr. D. Sivakumar, Chief Manager, was examined as P.W.1 and Exs.A1 to A27 were marked. The petitioners herein who were arrayed as respondents, did not examine any witnesses and not marked any documents. The Tribunal (DRT), after taking note of the materials and evidences, had found that the claim made by the 3rd respondent/Bank is sustainable and accordingly, passed an order on 12.2.2018 for recovery of the said sum from the petitioners herein/respondent Nos. 1 to 6 therein, jointly and severally together with 12% per annum from the date of Original Application till the date of realisation together with cost by sale of the scheduled mentioned properties.4. The petitioners herein/respondent Nos. 1 to 6 in OA. No. 222/2017, aggrieved by the said order, filed an appeal before the Debts Recovery Appellate Tribunal (DRAT) at Chennai and the Appellate Tribunal, vide order dated 5.7.2019, directed the petitioners/appellants, to make a pre-deposit of Rs. 30 lakh, with the Registrar of the Debts Recovery Appellate Tribunal within a period of four weeks and during the course of arguments, the learned Counsel for the appellants before DRAT had fairly conceded that the appellants are not in a position to make the pre- deposit. The DRAT, has taken into consideration of the fact that DRAT cannot entertain the appeal filed by the aggrieved person, unless and until they comply with the formality of pre-deposit, and had dismissed the appeal for want of compliance and challenging the legality of the order, the present writ petition is filed.5. The learned Counsel for the petitioners has made an attempt to advance arguments on the merits of the main appeal itself which admittedly, came to be dismissed for want of compliance and took a stand that the 4th petitioner is not at all a partner of the 1st petitioner/Firm as he retired from the Partnership on 4.4.2014 and signed the Challan in his personal capacity and it will not bind and that apart, there was a discrepancy in the Statement of Accounts as well as calculation of unapplied interest between 3.12.2014 and 9.12.2014 and despite not relief has been claimed against the 6th petitioner, joint and several liability is also foisted upon him and hence, prays for interference.6. This Court has carefully considered the arguments advanced by the learned Counsel for the petitioners and also perused the materials placed before it.7. It is relevant to extract Section 30-A of the Recovery of Debts and Bankruptcy Act, 1993:“Section 30-A: Power of Adjudicating Authority to impose penalty:(1) Where any asset reconstruction company or any person fails to comply with any direction issued by the Reserve Bank under this Act, the Adjudicating Authority may, by any order, impose on such company or person in default, a penalty not exceeding one crores rupees or twice the amount involved in such failure where such amount is quantifiable, whichever is more, and where such failure is a continuing one, a further penalty which may extend two one lakh rupees for every day, after the first, during which such failure continues.(2) For the purpose of imposing penalty under Sub-section (1), the Adjudicating Authority shall serve a notice on the asset reconstruction company or the person in default requiring such company or person to show cause why the amount specified in the notice should not be imposed as a penalty and a reasonable opportunity of being heard shall be given to such person.(3) Any penalty imposed under this section shall be payable within a period of thirty days from the date of issue of notice under Sub-section (2).(4) Where the asset reconstruction company fails to pay the penalty within the specified period under Sub-section (3), the Adjudicating Authority shall, by any order, cancel its registration:Provided that an opportunity of being heard shall be given to such asset reconstruction company before cancellation of registration.(5) No complaint shall be filed against any person in default in any Court pertaining to any failure under Sub-section (1) in respect of which any penalty has been imposed and recovered by the Reserve Bank under this section.(6) Where any complaint has been filed against a person in default in the Court having jurisdiction no proceedings for imposition of penalty against that person shall be taken under this section.Explanation:- For the purpose of this section and Sections 30-B, 30-C and 30-D:(1) “Adjudicating Authority” means such officer or a committee of officers of Reserve Bank, designated as such from time-to-time, by notification, by the Central Board of Reserve Bank;(2) “Person in default” means the asset reconstruction company or any person which has committed any failure contravention or default under this Act and any person incharge of such company or such other person, as the case may be, shall be liable to be proceeded against and punished under Section 33 for such failure or contravention or default committed by such company or person.”8. In the light of the above said provision, the DRAT has not been vested with any jurisdiction or discretionary power to reduce the pre-deposit.9. It is to be noted at this juncture that the Original Application by the 3rd respondent/Bank was ordered for recovery of a sum of Rs. 80 lakh and odd and the DRAT has indicated that the petitioners herein/appellants have to make a pre-deposit of Rs. 30 lakh and during the course of arguments, it was fairly conceded by the learned Counsel appearing for the appellants therein that the appellants are not in a position to make a pre-deposit and taking note of the same, th

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e DRAT has dismissed the appeal for want of said compliance.10. In the considered opinion of the Court, the impugned order passed by the DRAT is in compliance with the above said statutory provision and therefore, it cannot be said that the DRAT has committed a grave error while passing the impugned order.11. If the petitioners/appellants are so advised and if it is available to them under law, they are always at liberty to file necessary application seeking extension of time for making the pre-deposit and for restoration of the appeal.12. In the result, the writ petition is dismissed subject to the above observation. No costs. Consequently, the connected miscellaneous petition is closed.Writ Petition dismissed.