"(i) Issue writ of certiorari or any other writ, order
or direction as this Hon'ble Court may deem fit
setting aside the order dated 13.12.2024 (Annexure-
A) in I.A.No.262/2024 in AIR No. 1854/2023 and
I.A.No.714/2024 in AIR No.84/2024 pending before
the Hon'ble Debts Recovery Appellate Tribunal,
Chennai;
(ii) Allow I.A. No.262/2024 in AIR NO.1854/2023
and I.A.No.714/2024 in AIR No.84/2024 pending
before the Hon'ble Debts Recovery Appellate
Tribunal, Chennai and direct that the said appeals be
heard on merits without any pre-deposit.
(iii) In the alternative to prayer no.(ii) direct that
the appeals in AIR No.1854/2023 and AIR
No.84/2024 pending before the Hon'ble Debts
Recovery Appellate Tribunal, Chennai be heard
upon deposit of a cumulative and aggregate sum
of Rs.9,80,46,885.25/- being 25% of
Rs.39,21,87,541/-."
3. Foundational facts of the case:
The 1st respondent-bank initiated SARFAESI proceedings
inter alia against the borrower and the petitioner, that
eventually resulted into issuance of Possession Notice
dated 12.02.2020 followed by Sale Notice dated
26.07.2022 u/s.13(4) of the 2002 Act. Petitioner filed
S.A.No.95/2020 renumbered as TSA No.11/2022 for
assailing the Possession Notice. He has also filed SA
No.7/2023 assailing the Sale Notice.
3.2 The Debt Recovery Tribunal, Bangalore by a common
order dated 09.11.2023 dismissed both the SAs,
eventually resulting into petitioner moving two separate
appeals ie.,AIR No.1854/2023 and AIR No.84/2024. He
had also filed two separate applications respectively
I.A.No.264 of 2024 in the former and I.A.No.714 of 2024
in the latter seeking waiver of pre-deposit prescribed
u/s.18 of 2002 Act. The Debt Recovery Appellate Tribunal
vide order dated 13.12.2024 has directed the petitioner to
deposit 25% of Rs.82,58,87,541-00 ie., Rs.20,64,71,885-
00 in each of the appeals as a precondition for maintaining
them. Reprieve in terms of equalized installments is also
granted. Aggrieved thereby, petitioner is complaining
before this court.
4. Learned counsel for the petitioner seeks to
deposit should be construed in such a way that even if
there are multiple appeals arising from the same debt,
pre-deposit in one would enure to the benefit of the rest.
4.2 While working out amount to be made pre-deposit of,
any payment made by the sureties/guarantors towards the
loan account in question has to be given deduction
inasmuch as the term employed inter alia in Sec.18 is
debt due as defined u/s.2(ha) of the Act.
4.3 The proceedings resulting into issuance of Possession
Notice followed by Sale Notice u/s.13(4) of the Act, should
be treated as constituting one single appeal for the
purpose of Sec.18 and therefore duplication of pre-deposit
is not justified.
4.4 Learned Panel Counsel appearing for the bank and
the learned Sr. Advocate appearing for the respondent-
auction buyer resist the petition making submission in
justification of the impugned order and the reasons on
which it has been structured. Learned Sr. Advocate
contends that under the very scheme of Secs. 17 & 18 of
the 2002 Act, making pre-deposit in each of the appeals is
a sine qua non; Parliament in its wisdom has enacted that
way and if it wanted the requirement to be otherwise, the
text of these provisions would have been much different.
Learned Panel Counsel cottons with the same contention
and repels the argument of petitioner's counsel that the
deductions have not been waived from the outstanding
debt whilst working out pre-deposit amount. He also
highlighted the conduct of the petitioner which according
to him disentitles to the discretionary relief at the hands of
this Court.
5. Having heard learned counsel appearing for the
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 debt referred to in the second
proviso."
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It has long been settled that right of appeal is a creature
of law and therefore, the Law Maker can condition it
subject to the rider that such condition shall not be
unreasonable or unjustifiably onerous. Parliament in its
wisdom has enacted the prescription of making pre-
deposit after the Apex Court in MARDIA CHEMICALS
LTD vs. UNION OF INDIA1, has done away with such a
requirement that was there in section 17 of the 2002 Act.
Apparently, there is no challenge to the requirement of
making such a pre-deposit. Therefore, the task of this
court is only to construe the provisions of section 18;
obviously, court cannot rewrite it, as rightly contended by
learned Sr. Advocate appearing for the auction buyer.
5.2 Learned counsel appearing for the petitioner is right
in his submission that the requirement of pre-deposit u/s.
17 of the 2002 Act having been struck down in MARDIA
CHEMICALS supra, section 18 has been restructured
requiring pre-deposit coupled with discretion to waive a
part thereof. He draws our attention to the Parliamentary
(2004) 4 SCC 311
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debates that preceded the amendment to section 18 to tell
that the condition of pre-deposit was not to make
challenge to the DRT order unreasonably onerous to the
borrower/surety but only to secure the amount due as
debt to the Bank/Financial Institution, as determined by
the DRT.
5.3 The following Parliamentary debates dated 7.12.2004
on the Enforcement of the Security Interest and Recovery
of Laws (Amendment) Ordinance, 2004, support the
submission that the requirement of making pre-deposit in
terms of section 18 of the Act is not appeal-specific but
the debt-due specific. In other words, notwithstanding
multiple appeals, if pre-deposit is made in one of them,
the requirement of section 18 is complied with and that
there is no justification for insisting upon the same pre-
deposit being made in each of the appeals.
"The Minister of Finance (Shri.P.Chidambaram)...
That judgement of the Supreme Court in Mardia
Chemicals was passed on 8th of April, 2004...So,
I think it was absolutely necessary not to leave
a situation where after sub-Section 2 of Section
17 was struck down by the Supreme Court, the
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result was that there was no effective way in
which the lenders could approach the
tribunal...If these two rulings of the Supreme
Court were allowed to stand without any
corrective measures, for a long time what would
have happened is, for that entire period, this Act
would has been a virtual dead letter. ...we have,
in deference to the observations of the Supreme
Court, deleted sub-Section 2 of Section 17, and
we have also introduced a provision by which
the borrower will be given an opportunity to
state his case, before measures can be taken
under sub-Section 4 of Section 13, and
immediately the borrower can challenge it
before the tribunal. If the tribunal upholds the
claim of the lender, and then the borrower
wishes to go for an appeal, at that stage, a
provision has been introduced where the
borrower would have to deposit 50 per cent of
the amount which has been decided as owing
from him... At the first stage, he deposits
nothing, and at the second stage, the appellate
stage, he would have to deposit 50 per cent. I
think, this is a fair provision. This balances the
interest of both the lender and borrower. I have
no doubt that this provision will be a salutary
provision for effectively implementing this Act..."
5.4 Let us examine the consequences of a view in
variance with the above: If there are multiple borrowers
and plural sureties in respect of the very same loan, and
each one of them files the appeal u/s 18, then the total
amount of deposit may far exceed the debt due.
Apparently, that is not the intent of the Parliament, as
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rightly submitted by learned counsel appearing for the
petitioner. A great jurist & Chief Judge AHARON BARAK
of Israel's Supreme Court in his PURPOSIVE
INTERPRETATION IN LAW2 writes:
"...the legislature enacts statutes with the
objective purpose of achieving the proper
modes of behavior. Hence the presumption
that legislation seeks to achieve reasonable
results, logically, avoiding anything that is
needlessly contrary to common sense. The
purpose of a statute is presumed not to be the
performance of a useless activity, not to make
unreaslistic demands..."
5.5 The contention of respondents that the text of
section 18 of the Act is plain & clear and therefore, does
not require any interpretation, is attractive at the first
blush; however, a deeper examination shows it otherwise.
Every text howsoever plain it may be, requires
interpretation. It cannot be reasonably understood sans
interpretation. Prof. J.H.Wigmore3, opines: "The process of
interpretation, then, though it is commonly simple and
often unobserved, is always present, being inherently
indispensable..." Law enacts one's thought , which cannot
Princeton, First Indian Sub-continent Printing 2023 at pg.361
Evidence (1981) § 2459
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act upon another unless it is comprehended. Even a plain
text of law requires interpretation because only through
that process, we can conclude whether its meaning is plain
or not. Added, interpretation is concerned with unearthing
the hidden meaning from the text of a statute. A text may
yield varying meanings in different sets of facts.
5.6 Ronald Dworkin's jurisprudence also recognizes a
vast reservoir of principles 'implicit' in the practice of law,
principles that follow from the best interpretive theory of
explicit law4. A vast majority of statutes yield plain
meanings in the vast majority of cases. Only in a minority
of cases, the text of law becomes unclear, as it has
happened in the case at hand. Most cases that come
before court belong to the latter category. Language of the
law sets the boundaries of its interpretation. However, any
text will have not only an express meaning but some
implicit meanings too. The meaning of a statute can be
said to be explicit when the text of its very provisions
Ronald Dworkin, Law's Empire (Cambridge, Mass: Harvard University Press, 1986), chapters
3,7.
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conveys to the reader through the dictionary meaning of
the language that is understood in its context. On the
other hand, the meaning of a text can be said to be
implicit when it conveys to the reader not as a part of
dictionary meaning of the language but as if it is written in
invisible ink. In other words, to understand the implicit
meaning, one has to read between the lines. That is where
the task of a judge as the mouth of Law Maker begins.
This implicit meaning has to be inferred from the policy
content which the Law Maker has broadly enacted.
5.7 Added, there is a strong presumption that the
legislature does not intend its statutes to be unjust &
unreasonable. It is more so in a constitutionally ordained
Welfare State. Elements of reason & justice should
animate construction of statutes. Therefore, we are of the
considered opinion that when there are multiple appeals,
pre-deposit in one of them enures to the benefit of other,
provided that debt is the same. Incidentally, question
may crop up as to what should happen when one such
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appeal in which pre-deposit is made is withdrawn.
Answer to this need not detain us long. The DRAT will be
within its power to insist upon the pre-deposit in one of
the rest of appeals. In which of such appeals pre-deposit
should be insisted upon, is also within the domain of
DRAT. There is force in the submission of learned counsel
for the petitioner that the Madras High Court in M.
RAMAKRISHNAN vs. DENA BANK5 and the Kerala High
Court in SENIOR MANAGER, UNION BANK OF INDIA
vs. R.DHANALAKSHMI6 have taken the view which
broadly accords with ours. The contention of learned
counsel appearing for the petitioner that both the appeals
in question should be treated as one single appeal, does
not merit consideration in view of our observation in the
preceding paragraphs.
5.8 The next contention of the petitioner that the
payments made by a surety/guarantor has not been
accounted, need not be examined by us. To some extent,
2008 SCC OnLine Mad 540
MANU/KE/2976/2022
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this aspect borders merits of the main matter. However, in
determining 25% of the amount of debt due, the DRAT
has to examine if any payment is made towards the debt
in question and such a payment is given due deduction. All
these aspects being a matter of record, their examination
would not pose any difficulty to the DRAT. The contention
of learned Panel Counsel that while arriving at the figure
the payment made by the surety is also counted, is left to
be considered by the DRAT after hearing both the sides.
5.9 The vehement contention of learned Sr. Advocate
appearing for the auction buyer that the conduct of the
petitioner has been adversely commented upon by a
learned Single Judge of this Court in petitioner's
W.P.No.15632/2021 disposed off on 16.03.2023, does not
much impress us. There is some adverse observation
against the petitioner, is true. However, grounds are
reserved to him for agitation in the proceedings. At the fag
end of paragraph 14 of the said judgment, it is observed
as under:
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"The intention of the petitioner appears to be to
dodge the issue as long as possible and as far
as possible. Therefore, on this solitary ground of
non-divulgence of aforesaid facts, I decline to
entertain the petition. The petitioner is anyway
before the DRT in several proceedings. The
grounds that are urged in this petition can
always be urged before the DRT and the DRT is
well within its jurisdiction to consider all those
grounds in support of the grievance of the
petitioner."
The above observations have reserved the contentions to
the petitioner for being urged in the pending proceedings
before the DRT/DRAT. Whatever culpable conduct based
on which petitioner was denied relief in the said writ
petition, therefore cannot be the basis to send him back
empty handed. It was Justice Oliver Wendell Holmes,
who a century ago said in DAVIS vs. MILLS7:
"Constitutions are intended to preserve
practical and substantial rights, not to maintain
theories...".
In the above circumstances, this petition succeeds; a
Writ of Certiorari issues quashing the impugned order; the
subject applications are remitted back to the portals of
Debt Recovery Appellate Tribunal, Chennai, for
consideration afresh in the light of observations herein
above made.
194 U.S. 451 (1904)
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No costs.
We place on record our deep appreciation for the
able assistance rendered by our Research Assistant
Mr.Raghunandan K.S.
Sd/-
(KRISHNA S DIXIT)
JUDGE
Sd/-
(G BASAVARAJA)
JUDGE
CBC,SNB
