w w w . L a w y e r S e r v i c e s . i n



Shree Engineering Industries Pvt. Ltd. & Another V/S United Bank of India.


Company & Directors' Information:- UNITED ENGINEERING INDUSTRIES PRIVATE LIMITED [Active] CIN = U29299MP2011PTC026106

Company & Directors' Information:- SHREE INDUSTRIES LIMITED [Active] CIN = L74210DL1985PLC019851

Company & Directors' Information:- SHREE ENGINEERING INDUSTRIES PRIVATE LIMITED [Active] CIN = U31100WB2008PTC123400

Company & Directors' Information:- D P ENGINEERING INDUSTRIES LIMITED [Active] CIN = U27310DL2008PLC176856

Company & Directors' Information:- A K ENGINEERING INDUSTRIES (INDIA) PRIVATE LIMITED [Active] CIN = U25206DL1997PTC085204

Company & Directors' Information:- G L ENGINEERING INDUSTRIES PRIVATE LIMITED [Active] CIN = U28920MH1981PTC023662

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- B V M ENGINEERING INDUSTRIES LIMITED [Active] CIN = U28111DL1972PLC005983

Company & Directors' Information:- UNITED ENGINEERING COMPANY PVT LTD [Active] CIN = U34201WB1985PTC038966

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- A. V. ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U99999DL1974PTC007360

Company & Directors' Information:- G D R ENGINEERING INDUSTRIES PVT LTD [Strike Off] CIN = U27109UP1971PTC003388

Company & Directors' Information:- L S ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74899DL1977PTC008484

Company & Directors' Information:- I B I ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U45202PB1974PTC003422

Company & Directors' Information:- A H B ENGINEERING INDUSTRIES PVT LTD [Strike Off] CIN = U35999WB1988PTC044786

Company & Directors' Information:- O K ENGINEERING INDUSTRIES PRIVATE LTD [Active] CIN = U74899DL1987PTC027660

Company & Directors' Information:- THE UNITED ENGINEERING CORPORATION PRIVATE LIMITED [Strike Off] CIN = U00349KA1946PTC000438

Company & Directors' Information:- R P ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U99999DL1973PTC006781

Company & Directors' Information:- S V ENGINEERING INDUSTRIES PVT LTD [Under Liquidation] CIN = U74210TG1981PTC003174

Company & Directors' Information:- UNITED INDUSTRIES LIMITED [Dissolved] CIN = U29299KL1947PLC001272

    Misc. Appeal No. 392 of 2011

    Decided On, 22 December 2011

    At, Debt Recovery Appellate Tribunal At Delhi

    By, THE HONORABLE JUSTICE: MR. S.N.H. ZAIDI
    By, CHAIRPERSON

   



Judgment Text


1. This Appeal has been preferred against the order dated 3.11.2011 of the learned Presiding Officer holding additional charge of the Debt Recovery Tribunal-II Delhi, dismissing application (I.A. 824/ 2011) filed in SA 62 of 2011. It appears that pursuant to the notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the Act) involving an amount of about Rs. 1300 lacs, the Bank, under Sub-section (4) thereof, took possession over two properties mortgaged with it. The guarantor and the borrower (appellants herein) filed two applications under Section 17 of the Act (S.A. No. 61/2011 and S.A. No. 62/2011 respectively) before the Debt Recovery Tribunal {for short, the DRT) against the Bank qua both the properties. The DRT, on 12.9.2011, as an interim measure, restrained the Bank from proceeding against both the properties provided the appellants deposit an amount of Rs. 295 lacs within 30 days from the date of order. It was also ordered that one of the mortgaged Properties viz. house bearing No. 197, Sector 21 -B. Faridabad (Haryana) shall be sold through tripartite agreement between the applicant Bank and the purchaser and it was clarified that the direction to deposit the amount shall not be dependent upon the sale of the property and shall persist even if the property, in any eventuality, is not sold and in case of non-compliance of the order, the Bank was allowed to proceed as per law. The appellants could not deposit the ordered amount and, by moving an application sought further time to sell the said property and to deposit the amount. That application was, however, dismissed on 31.10.2011. The appellants, thereafter, moved another application stating that due to certain circumstances the property could not be sold and the amount could not be deposited, therefore, the Bank may proceed to sell the property (House No. 197, Sector 21 -B, Faridabad, Haryana) but it be restrained from proceeding against the other property. The DRT dismissed that application by the impugned order. It is the dismissal of request of the appellants to restrain the Bank from proceeding against the other property than house No. 197, Sector 21-B, Faridabad, which appears to have hurt the appellants and brought them in appeal before this Tribunal.

2. However, before Mr. Pallav Saxena and Mr. Anand Agarwal, the learned Counsel for the appellants, could be heard on admission and the impugned order be appreciated on merit, Mr. Sanjiv Kakra, learned Counsel the respondent Bank, raised a preliminary objection regarding entertainability of the appeal in the absence of the compliance of the second proviso to Section 18 of the Act.

3. I have heard the learned Counsel for the parties at length on the aforesaid objection and also on admission and given my thoughtful consideration to their submissions.

4. The contention of Mr. Sanjeev Kakra is that as this appeal has been under Section 18(1) of the Act, therefore, the mandatory requirement of pre-deposit of the amount envisaged under its second proviso has to be necessarily complied with before entertaining the appeal, even if it may be an appeal against an interim or interlocutory order. In support of his submissions he has relied upon the observations of the Supreme Court in Narayna Chandra Ghosh v. UCO Bank & Ors., IV : (2011) SLT 229 : 11 (2011) CLT 355 (SC) : AIR 2011 SC 1913 and Sangeeta Singh v. Union of India & Ors., VI (2005) SLT 539 and of the High Courts in the cases of National Polymers and Ors. v. Union of India and Ors.,: I (2012) BC 97=; M/s. Vinay Containers Services Pvt. Ltd. & Ors. v. AXIS Bank, IV (2011) BC 445 (DB); Forum Diamonds & Ors. v. Bank of Baroda & Ors., II (2010) BC 585 (DB); M/s. Swadeshi Cement Ltd. v. Assets Care Enterprises Ltd., W.P. (C) 13143/2009 & CM No. 5051/2010. decided by the Delhi High Court on 30.4.2010; Indian Bank Asset Recovery Management Branch v. Hamosons Apparels Pvt. Ltd.

5. Learned Counsel for the appellants, on the other hand, argued that the requirement of the compliance of pre-deposit under the Second Proviso to Section 18(1) of the Act would apply only where the appeal is filed against the order finally disposing of the application filed under Section 17 of the Act and not in respect of the present appeal which has been filed against an interim order passed on the application moved during the pendency of the application under the said Section 17. My attention has been drawn to the observations of the Hon'ble Supreme Court in Mardia Chemicals Ltd. & Ors., v. Union of India & Ors., : 110 (2004) DLT 665 (SC) : II (2004) BC 397 (SC) : II (2004) SLT 991 : (2004) 4 SCC 311, as well as of the Hon'ble Delhi High Court in R. V. Saxena v. UOI & Ors., : 127 (2006) DLT 267(DB) and Naresh Kumar Mittal v. SBI & Ors., : 161 (2009) DLT 452 : 1V (2009) BC 50 : W.P. (C) 520/2009 decided on 17.7.2009. It has been pointed out that this Tribunal in M/s. B.L.Gupta Construction (P) Ltd. & Ors. v. Vijya Bank, 2010(1) DRT Cases (PT-III) 297 has also held that no pre-deposit is required to be made under Section 18 where the interlocutory order has been challenged in appeal.

6. Before considering the merits of the rival submissions, it would be appropriate and necessary to see the scope of some of the relevant provisions of the Act and how the Hon'ble Courts have interpreted them Section 17 of the Act provides that any person, including a borrower, aggrieved by any of the measures referred to in Section 13(4) taken by the secured creditor, may make an application to the DRT, which shall consider whether any of such measures as taken by the secured creditor for enforcement of security are in accordance with the provisions of the Act and the rules and if the DRT, after considering the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of such measures taken by the secured creditor is not in accordance with the Act or the rules, it may restore the possession of the secured assets or the management of the business to the borrower, as the case may be and may also pass necessary and appropriate order in relation to any of the recourse taken by the secured creditor under Section 13(4). Section 18 of the Act provides for a right of appeal to a person aggrieved by any order of the DRT made under Section 17 and reads as under:

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 a 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 amount referred to in the second proviso.

(2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as for as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder.

7. It is to be noted that Section 17(2) of the Act as it stood prior to its substitution in 2004, had also provided for the pre-deposit of 75% of the amount claimed in the notice given under Section 13(2) for entertaining the appeal filed by the borrower before the DRT which could be waived or reduced by the DRT under the proviso to that sub-section. The Supreme Court in Mardia Chemicals' case (supra), while dealing with the validity/constitutionality of the condition of pre-deposit under Section 17, has held that the proceedings under the said section are not the appellate proceedings and in fact it is an initial action brought before a Forum prescribed under the Act raising the grievance against the action or measure taken by one of the parties to the contract and it is like filing a suit in Civil Court. In paragraphs 60 and 64 of its judgment the Apex Court has observed that:

60. The requirement of pre-deposit of any amount at the first instance of proceedings is not to be found in any of the decisions cited on behalf of the respondent. All these cases relate to appeals The amount of deposit of 75% of the demand, at the initial proceeding itself sounds unreasonable and oppressive more particularly when the secured assets/the management thereof along with the right to transfer such interest has been taken over by the secured creditor or in some cases property is also sold. Requirement of deposit of such a heavy amount on basis of one sided claim alone, cannot be said to be a reasonable condition at the first instance itself before start of adjudication of the dispute. Merely giving power to the Tribunal to waive or reduce the amount, does not cure the inherent infirmity leaning one-sidely in favour of the party, who, so far has alone been the party to decide the amount and the fact of default and classifying the dues as NPAs without participation/association of the borrower in the process. Such an onerous and oppressive condition should not be left operative in expectation of reasonable exercise of discretion by the concerned authority. Placed in a situation as indicated above, where it may not be possible for the borrower to raise any amount to make the deposit, his secured assets having already been taken possession of or sold, such a rider to approach the Tribunal at the first instance of proceedings, captioned as appeal, renders the remedy illusory and nugatory.

64. The condition of pre-deposit in the present case is bad rendering the remedy illusory on the grounds that, (i) it is imposed while approaching the adjudicating authority of the first instance, not in appeal: (ii) there is no determination of the amount due as yet; (iii) the secured assets or its management with transferable interest is already taken over and under control of the secured creditor; (iv) no special reason for double security in respect of an amount yet to be determined and settled; (v) 75% of the amount claimed by no means would be a meagre amount: (vi) it will leave the borrower in a position where it would not be possible for him to raise any funds to make deposit of 75% of the undetermined demand. Such conditions are not alone onerous and oppressive but also unreasonable and arbitrary. Therefore, in our view, Sub-section (2) of Section 17 of the Act is unreasonable, arbitrary and violative of Article 14 of the Constitution.

8. Post decision of the Apex Court rendered in the Mardia Chemical case, the Act was amended by Act No. 30 of 2004 and the condition of pre-deposit of amount under Section 17(2) along with its proviso has been omitted, but by inserting second proviso to Section 18(1), deposit of 50 % of the amount of debt due from the borrower as claimed by the secured creditors or determined by the DRT, whichever is less, has been introduced as a condition precedent for entertaining the appeal filed by the borrower before the Appellate Tribunal and by inserting third proviso to that section, the Appellate Tribunal has been empowered to reduce the amount of deposit for reasons to be recorded in writing, to not less than 25% of the debt, referred to in the second proviso. Thus, deposit of the lesser of the two amounts has been made a condition precedent for entertainment of appeal to the Appellate Tribunal.

9. The constitutional validity of the second proviso to Section 18(1) of the Act has been upheld by the Delhi High Court in R. V. Saxena v. Union of India, (supra) and it has been held that:

16. The right of appeal is not an inherent right but is a creature of the statute. The Legislature can impose conditions under which this is to be exercised. Moreover, the proviso to Section 18 does not require the entire amount to be deposited, but only 50% thereof which can be reduced to a minimum of 25% of the sum. We see no illegality in this proviso. There are similar provisions in many enactments and they are being upheld by the Supreme Court. For example, in the second proviso under Section 15(1) of the Foreign Trade (Development and Regulation) Act, 1992, it is provided the appeal against an order imposing a penalty or redemption charges shall not be entertained unless the amount of the penalty or redemption charges have been deposited by the appellant. Similarly in many other statutes, there are such similar provisions.
10. In a recent case of Narayan Chandra Ghosh v. UCO Bank & Ors. (supra), the Supreme Court while holding that the requirement of pre-deposit under Subsection (1) of Section 18 of the Act is mandatory and there is no reason whatsoever for not giving full effect to it and no Court, much less the Appellate Tribunal, a creature of the Act itself, can refuse to give full effect to the provisions of the Statute, has observed in paragraphs 7, 8 and 9 of the judgment that:

7. Thus, there is an absolute bar to the entertainment of an appeal under Section 18 of the Act unless the condition precedent, as stipulated, is fulfilled. Unless the borrower makes, with the Appellate Tribunal, a pro-deposit of fifty per cent of the debt due from him or determined an appeal under the said provision cannot be entertained by the Appellate Tribunal. The language of the said proviso is clear and admits of no ambiguity.

8. It is well-settled that when a statute confers a right of appeal, while granting the right, the Legislature can impose conditions for the exercise of such right so long as the conditions are not so onerous as to amount to unreasonable restrictions, rendering the right almost illusory. Bearing in mind the object of the Act, the conditions hedged in the said proviso cannot be said to be onerous. Thus, we hold that the requirement of pre-deposit under Sub-section (1) of Section 18 of the Act is mandatory and there is no reason whatsoever for not giving full effect to the provisions contained in Section 18 of the Act in that view of the matter, no Court, much less the Appellate Tribunal a creature of the Act itself, can refuse to give full effect to the provisions of the statute.

9. The argument of learned Counsel for the appellant that as the amount of debt due had not been determined by the Debts Recovery Tribunal, the appeal could be entertained by the Appellate Tribunal without insisting on pre-deposit is equally fallacious. Under the second proviso to Subsection (1) of Section 18 of the Act the amount of fifty percent, which is required to be deposited by the borrower, is computed either with reference to the debt due from him as claimed by the secured creditors or as determined by the Debts Recovery Tribunal, whichever is less. Obviously, where the amount of debt is yet to be determined by the Debts Recovery Tribunal, the borrower, while preferring an appeal, would be liable to deposit fifty per cent of the debt due from him as claimed by the secured creditors....

11. In Forum Diamonds & Ors. v. Bank of Baroda & Ors. (supra), a Division Bench of the Bombay High Court has disagreed with the contention of the petitioner that unless the amount is determined and finding is recorded about the actual amount due to the borrower, the provision of Section 18 of the Act would not come into play and has observed that:

7.... The provisions of Section 18 of the Securitisation Act contemplates that 50% or 25% of the amount has to be deposited by the appellant of the amount claimed by the secured creditors or the amount determined by DRT whichever is less. There is some element of benefit available to the applicant under these provisions but the interpretation given by the petitioners as that itself would mean rendering the provisions of Section 13 as well as the provisions of Section 17 ineffective inoperative, cannot be accepted. The Legislature in its wisdom has used the word 'or" and the same has to be construed and read as "or" and not as "and". Either of the amount i.e. the amount claimed by the secured creditors or the amount determined by the DRT can be the basis of determining 50% or 25% of the debts as the case may be.
12. The Madras High Court in Indian Bank Asset Recovery Management Branch v. Homosons Apparels Pvt. Ltd. (supra), while construing the provisions of Section 18(1) of the Act rejected the contention that an appeal filed against an interim order of the DRT or against an order declining an interim relief by the DRT does not require the pre-deposit under that section as there is no determination of the due amount of the debt. It has been observed by the Court in Paragraph 18 of the judgment that-

18.... Similarly, in a case where appeal under Section 18 is preferred against interim order or for non-grant of interim order, the aggrieved persons, while praying for interim injunction to stall the proceeding, cannot allege that no determination has been made by DRT with regard to the claim. It cannot blow hot and cold by moving in appeal under Section 18 against interim order or non-grant of interim order, for the purpose of getting an appropriate interim order in appeal under Section 18 and allege non-determination of claim by Tribunal, which at best can be determined at the time of final hearing of the case, that too in a case where if any dispute is raised by party under Section 19 of DRT Act, 1993 or Bank files an application under Section 13(10)) of NPA Act. Therefore, the effect and correct meaning to give to the sentence "the amount of debt due from him as claimed by secured creditor or determined by Debts Recovery Tribunal, whichever is less" as mentioned under 2nd proviso to Section 18(1), a harmonious reading has to be made, which may fit in all situations. Therefore, we hold that the 2nd proviso to Section 18(1) stipulates pre-deposit of 50% due as claimed by the secured creditor or determined by the Debts Recovery Tribunal, whichever is less, and in absence of a determination by the Tribunal, the person has to deposit 50% of the amount claimed by the secured creditor, subject to waiver under 3rd proviso to Section 18(1). If any person, after notice under Section 13(2) has deposited any amount, including amount, if any, deposited during Section 13(4) stage or pendency of appeal under Section 17, it can be brought to the notice of the Appellate Tribunal for adjusting such amount for the purpose of determination of amount of claim for the purpose of 2nd proviso to Section 18(1). Similarly, it is also open to any aggrieved person to show that another aggrieved person, for same action taken by secured creditor, while preferring appeal under Section 18 against common order, has deposited certain amount and in such case, the Appellate Tribunal will take into consideration such amount for the purpose of determination of amount to be paid under 2nd proviso to Section 18(1) or for waiver under 3rd proviso to Section 18(1).
13. In M/s. Swadeshi Cement Ltd. v. Asset Care Enterprises Ltd. (supra), where notice under Section 13 (2) demanding the outstanding amount of Rs. 5,284.08 lacs and possession notice under Section 13(4) of the Act issued to the petitioner were assailed before the DRT and during the pendency of the application under Section 17 of the Act, the petitioner moved an interim application for appointment of Receiver for preparation of the list of assets. The DRT while disposing of that application directed the petitioner to deposit Rs. 10 crores within ten days and a further sum of Rs. 10 crores within ten days thereafter and subject to such deposits, respondent was restrained from proceeding against the properties in question. The petitioner, instead of depositing the amounts, filed an appeal to the Appellate Tribunal challenging the order of the DRT and also moved an application for waiver of the requirement of pre-deposit envisaged under the second proviso to Section 18 of the Act. The Appellate Tribunal refused to entertain the appeal unless 25% of the notice amount of Rs. 52.84 crores, which was computed to be 13.25 crores, is deposited and dismissed the waiver application. The order of the Appellate Tribunal was assailed under Articles 226 and 227 of the Constitution of India before the High Court. Their Lordships of the Court, after quoting the provisions of Section 18 of the Act has observed that:

5. Bare reading of aforesaid provision clearly shows that the Appeal cannot be entertained unless borrower deposits 50% of the amount of debt due from him. However, Appellate Tribunal is vested with the power to reduce this condition of deposit of 50% but is statutorily prohibited from venturing to less than 25% of the debt. The condition of pre-deposit is mandatory Language employed in the proviso to Section 18(1) of SRFAESI Act mandates that Appeal shall not be entertained unless 25% of the amount of debt due is deposited with the Appellate Tribunal. In this case Appellate Tribunal did reduce the condition of deposit to the extent of 25% but this amount had not been deposited Thus, we are of the view that appeal itself could not be entertained....
14. The question whether the requirement of pre-deposit under Section 18(1) of the Act would be attracted where the order challenged in an appeal before the Appellate Tribunal is not a final order under Section 17, but an interlocutory order, specifically came for consideration before the Division Bench of the Bombay High Court in Vinay Containers Services Pvt. Ltd. & Ors. v. AXIS Bank, IV (2011) BC 445. The Court while upholding the view of the DRAT, Bombay that the requirement of pre-deposit under Sub-section (1) of Section 18 of the Act would also apply where an appeal is filed against an interlocutory order passed by the DRT under Section 17 of the Act, has observed in Paragraph 8 of the judgment that:

8....The right of appeal under Section 18 arises in respect of "any order made by the Debt Recovery Tribunal" albeit under Section 17. The section refers to any order and those words are comprehensive enough to include a final as well as an interlocutory order. There is no reason or justification for this Court to exclude an interlocutory order from the purview of Sub-section (1) of Section 18. The plain language of Section 18 must be interpreted and given effect to. A restriction not envisaged cannot be read into Section 18. The Court cannot re-write legislation. An order under Section 17 of the Act undoubtedly includes an order finally disposing of the proceeding, on a proceeding questioning the measures taken by the secured creditor under Sub-section (4) of Section 13. But, equally, the Tribunal while exercising its power in an Appeal under Section 17 has the jurisdiction to pass interlocutory orders which are in aid of and ancillary to the exercise of the jurisdiction....
15. The Apex Court did not find any ground of interference in the aforesaid judgment and accordingly dismissed the petition for Special Leave to Appeal (Civil) No. 36326/2010 filed against it on 7.1.2011

16. Except the case of R. V. Saxena v. Union of India (supra), in none of the cases cited on behalf of the appellants, the Courts had considered the question of requirement of pre-deposit for entertainment of appeal before the Appellate Tribunal. In the case of R.V. Saxena, the Delhi High Court, as mentioned earlier, has upheld the constitutional validity of second proviso to Section 18(1) of the Act.

17. In the case of Naresh Kumar Mittal v. State Bank of India & Ors. (supra) relied upon by the appellants, the High Court had only considered the question whether the fee payable on an appeal arising from an order on the interlocutory application filed in a substantive petition under Section 17 of the Act would be the same as that on appeal from the final order passed in such substantive petition or would it be the same as payable in the first instance on an interlocutory application moved in substantive petition, and neither referred Section 18 of the Act nor considered the question of requirement of pre-deposit in appeal under that section. The principle of law laid down in that case has, therefore, no application in the present case. My learned predecessor, while deciding Appeal No. 226/2009, M/s. B. L. Gupta Construction (P) Ltd. v. Vijaya Bank (supra), has solely relied upon the ratio of Naresh Kumar Mittal's case and as such the view expressed by him cannot be accepted as a guiding principle for this case.

18. The Apex Court in Mardia Chemicals case (supra) has expressly recognised that the DRT in exercise of its ancillary powers would have the jurisdiction to pass any stay or interim order subject to any condition as it may deem fit and proper to impose.

19. The legal position as emerged from the above discussion goes to show that the DRT has not only an undoubted jurisdiction to pass final order under Subsection (3) or (4) of Section 17 of the Act on an application filed under Sub-section (1) thereof, but has also the ancillary power to make interim or interlocutory orders, with or without any condition, on applications filed during the pendency of the said application, under the said section or under any other provision of the Act. the DRT Act and the rules made thereunder. In the light of the aforesaid legal position, it is held that where an appeal is preferred to the Appellate Tribunal by the borrower against an interim order of the DRT staying any measure taken by the

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secured creditor under Section 13(4) of the Act with some condition or refusing/declining to stay such measure, the appellant would be liable to comply with the mandatory requirement of pre-deposit of the amount, referred to in the second proviso to Section 18(1) of the Act, failing which the appeal shall not be entertained. 20. I am also of the considered view that if during the pendency of substantive application, the Tribunal in exercise of the jurisdiction under any of the enabling provisions of the Act, the DRT Act or the rules, passes any interim or interlocutory order, which does not have the effect of staying the action or measure/s taken by the secured creditor for enforcement of security interest under Sub-section (4) of Section 13 of the Act, then the condition of pre-deposit would not be applicable for entertaining an appeal preferred to the Appellate Tribunal against such order. 21. The contention of the appellant that the requirement of pre-deposit is to be complied only where the substantive application is finally disposed of, by determining the amount of debt and thereby terminating the lis, therefore, cannot be accepted as the Supreme Court in the case of Naresh Chanra Ghosh (supra) has also held that where the amount of debt is yet to be determined by the DRT, the borrower while preferring appeal would be liable to deposit 50% of the debt due from him as claimed by the secured creditors which at best, the Appellate Tribunal could have, after recording the reasons, reduced to an amount of not less than 25% of the debt referred to in the second proviso. 22. As the present appeal has been preferred by the borrower against the interim order whereby the DRT, by dismissing the application, has declined the appellant to stay the measure taken by the Bank qua the other mortgaged property than house bearing No. 197, Sector 21-B, Faridabad (Haryana), therefore, in view of the foregoing discussion, the appellant is obliged to comply with the mandatory condition of pre-deposit as contained in the second proviso to Section 18(1) of the Act for entertaining the appeal. The preliminary objection raised by Mr. Sanjeev Kakra regarding pre-deposit is accordingly upheld. 23. The appellant is accordingly directed to comply with the requirement of pre-deposit of the amount referred to in the second proviso to Section 18(1) of the Act within six weeks from the date of this order, failing which the appeal shall not be entertained. The amount shall be deposited with the Registrar of this Tribunal who shall forthwith invest the same in Fixed Deposit in the name of Registrar DRAT, Delhi with the respondent Bank for an initial period of 13 months and thereafter it will be renewed from time-to-time as and when required. The order on admission will be made when the appeal becomes entertanable. List on 3,2.2012 for further orders.
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