Delhi High Court
K L Rajgariha And Anr vs Canara Bank And Ors on 23 December, 2009
Author: Badar Durrez Ahmed
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 23.12.2009
+ W.P.(C) 14138/2009 & CM No.16293-94/2009
K L RAJGARIHA AND ANR ..... Petitioner
- versus -
CANARA BANK AND ORS ..... Respondent
Advocates who appeared in this case:
For the Petitioner : Mr. Ratan K. Singh, Advocate
For the Respondent : Mr. Rajiv B. Samaiyar, Adv. for R-1
CORAM:-
HON'BLE MR. JUSTICE BADAR DURREZ AHMED
HON'BLE MS. JUSTICE VEENA BIRBAL
1. Whether the Reporters of local papers may be allowed to
see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in Digest?
BADAR DURREZ AHMED, J (ORAL)
1. This writ petition is directed against the order dated 19.11.2009 passed by the Debts Recovery Appellate Tribunal on an application made by the petitioner for waiver of the pre-deposit amount, as stipulated under Section 21 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the said Act). The Appellate Tribunal has admitted the appeal of the petitioners but at the same time has not waived the entire pre-deposit amount and has required the petitioners to deposit an amount of Rs 25 lakhs each within four weeks from the date of the impugned order. The said deposit was required to be made before the Registrar of the Appellate Tribunal in the form of demand drafts and the Registrar was directed to convert the said deposit into fixed deposit with the same Bank, renewable after three months. The deposit was, however, without prejudice. The learned counsel for the petitioners has reiterated the contentions raised before the Appellate Tribunal with regard to the poor monetary condition of the petitioners as well as the fact that they are also physically ill. The petitioner No.1 is said to have suffered a paralytic attack which has also affected his memory. The petitioner No.2 is also said to be bed-ridden. These facts were noted by the Appellate Tribunal and it is for this reason that partial waiver of the pre-deposit amount was given by the Appellate Tribunal.
2. The amount found due by the Debts Recovery Tribunal, as against the principal borrower was Rs 10.29 crores. The argument of the petitioners is that insofar as the petitioners are concerned they were only guarantors and their guarantee is to be considered in terms of the agreement with the Bank. A copy of the guarantee agreement has been filed at page 49 of the paperbook which does indicate that the guarantee was jointly given by the petitioners and was limited to the extent of Rs 50 lakhs inclusive of interest. The learned counsel for the petitioners also drew our attention to paragraph 4 of the impugned order wherein the contention of the petitioners that a surety cannot be made liable for more than his undertaking was taken note of. In paragraph 4 of the impugned order it is recorded that it is not disputed by the counsel for the respondent bank that the guarantee limit was of Rs 50 lakhs together with interest etc.
3. We have heard the counsel for the petitioners as well as counsel for the respondent Bank, who appeared on advance notice. With their consent we are disposing of this writ petition at the admission stage itself. We are of the view that the Appellate Tribunal did, in fact, give partial waiver to the petitioners. As per the order passed by the Debts Recovery Tribunal, the total liability of the principal borrower was Rs 10.29 crores and if that figure were to be considered as the debt due then the pre-deposit amount would have come to approximately 7.5 crores being 75% thereof. However, the Appellate Tribunal granted substantial waiver of the pre-deposit amount by directing the petitioners to deposit a sum of Rs 25 lakhs each. While, the Appellate Tribunal considered the present case to be a fit one for granting partial waiver/substantial waiver of the pre-deposit amount, it lost sight of the fact that the liability of the petitioners was limited to Rs 50 lakhs in their personal capacity. Therefore, the pre-deposit of Rs 25 lakhs each, in effect, would amount to 100% of the debt due/liability of the petitioners, which, as per the guarantee agreement, was admittedly limited to Rs 50 lakhs. Considering these circumstances we think it proper to reduce the pre-deposit amount to Rs 15 lakhs. Consequently, the petitioners are jointly and/or severally liable to deposit a sum of Rs 15 lakhs within six weeks from today. On the said deposit being made, as directed by the Appellate Tribunal with the Registrar of the said Tribunal, recovery proceedings against the petitioners in their individual capacity shall remain stayed. This writ petition stands disposed of in view of the aforesaid directions.
Dasti under the signatures of the Court Master.
BADAR DURREZ AHMED, J
VEENA BIRBAL, J
DECEMBER 23, 2009
srb
