Delhi High Court
Neelima Bagaria vs Standard Chartered Bank & Anr. on 3 December, 2015
Author: G. S. Sistani
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 8594/2015 & CM.APPL 18673/2015(stay)
Date of Judgment : 3rd December, 2015
NEELIMA BAGARIA ..... Petitioner
Through : Mr. Pallav Saxena and Ms. Bindu Das,
Advocates.
versus
STANDARD CHARTERED BANK & ANR. ..... Respondents
Through : Mr. Sumit Bansal, Mr. Ateev Mathur,
Mr. Amol Sharma and Mr. A.P.S. Sehgal,
Advocates for R-1.
Mr. Sanjay Bhatt and Ms. Vidhushi
Shubham, Advocate for R-1 & 2.
Mr. Rajiv Kapoor, Advocate for R-2.
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
HON'BLE MS. JUSTICE SANGITA DHINGRA SEHGAL
G.S.SISTANI, J. (ORAL)
1. Challenge in this writ petition is to the order dated 24 th February,
2015 passed by the Debt Recovery Appellate Tribunal (DRAT) by
which an application filed by the bank seeking release of the pre-
deposit amount deposited by the petitioner herein at the time of
hearing the appeal filed by the petitioner has been allowed and the
request of the petitioner that the amount be refunded to the
petitioner has been declined.
2. The appeal filed by the petitioner was dismissed on 17.09.2014,
thereafter the bank had filed an application seeking release of the
pre-deposit amount. The objection which was raised by the
petitioner herein before the Tribunal against the release of the pre-
deposit amount was that the amount deposited was arranged by the
petitioner from her son.
3. Mr. Saxena, learned counsel for the petitioner while relying on
Section 18 of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002
(SARFAESI Act), submits that the reading of the Section and more
particularly proviso would show that there was no intention of the
legislature that the amount deposited as a pre-deposit at the time of
hearing the appeal, is to be released in favour of the financial
institution, upon the dismissal of the appeal. He further submits
that the object of introducing the provision for pre-deposit is to
ensure that frivolous appeals are not filed and to deter such
litigations from filing appeals.
4. Counsel for the respondents have opposed the present petition. It
is contended that once the OA is allowed and a certificate has been
issued, the amount deposited by the petitioner is to be adjusted
towards the decretal amount and cannot be refunded.
5. We have heard the learned counsel for the parties. In this case, in
the year 2000 the bank had filed an OA under Section 19 of the
Recovery of Debts due to Banks and Financial Institutions Act,
1993 before the Debts Recovery Tribunal for recovery of
Rs.7,37,84,093.13 along with pendentelite and future interest
thereon @ 17.1% per annum with quarterly interest and costs. An
ex parte decree was passed on 05.06.2002. It is claimed that the
petitioner came to know about the proceedings before the Recovery
Officer only on 10.04.2008. Thereafter, the petitioner inspected
the court record and made applications for setting aside the ex
parte final order. Objections raised by the petitioner before the
Recovery Officer were rejected, which led to the filing of an appeal
before the Presiding Officer. Meanwhile, to safeguard her rights,
various other petitions were also instituted which are not required
to be noticed as the short question which arises for consideration is
whether the amount (pre-deposit amount) deposited by the
appellant is liable to be released in favour of the bank or to the
appellant in case the appeal is dismissed. Since in this case the
petitioner at the time of filing of an appeal before the DRAT had
made a deposit in the sum of Rs.3,68,92,047/-. Subsequently, the
bank had made an application seeking release of this amount. The
petitioner had objected to the same on the ground that this amount
was borrowed by her from her son. The Appellate Tribunal
rejected the objections of the petitioner herein and allowed the pre-
deposit amount to be released in favour of the bank.
6. Mr. Saxena has urged before this Court that reading of Section 18
of the SARFAESI Act would show that there is no expressed
provision for the pre-deposit amount to be released in favour of the
bank. He has also submitted that an objective and purpose of such
a provision of deposit of pre-deposit is only to deter filing of
frivolous appeals. While there is no quarrel to the proposition
sought to be urged by Mr. Saxena that one of the objectives of pre-
deposit is to deter filing of frivolous appeals, but we are unable to
accept the submission made by Mr. Saxena that on dismissal of the
appeal, the pre-deposit amount is to be released to the appellant
primarily for the reason that at the time of filing of the appeal,
there is an adjudication and a certificate has been issued against the
petitioner and the liability of the petitioner stands adjudicated.
Once the liability stands adjudicated, it would lead to absurdity that
the pre-deposit amount deposited before the Appellate Tribunal is
released and the financial institution is again made to struggle to
recover its legitimate dues.
7. At this stage, learned counsel for the petitioner contends that the
petitioner was proceeded ex-parte and an ex-parte decree was
passed. Counsel further submits that the petitioner had made an
application under Order IX Rule 13 of Code of Civil Procedure and
also filed an SA. He further contends that his rights should be
protected to the extent that should he succeed, the Tribunal before
whom the applications are pending should take into account the
amount which stands credited in the account of financial institution
either by way of pre-deposit or upon sale of mortgaged property.
8. As far as, this prayer of the petitioner is concerned, we have no
hesitation in saying that should the petitioner succeed, the Tribunal
would consider the request of the petitioner and pass an appropriate
order with regard to the refund of amount paid by the petitioner
during the pendency of the proceedings.
9. With these directions, present writ petition along with all pending
applications are disposed of.
G.S.SISTANI, J
SANGITA DHINGRA SEHGAL, J
DECEMBER 03, 2015
gr/pst
