ORDER
A.K. Srivastava, J. (Chairman)
1. This is application under Section 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for waiver of the pre-deposit of 75% required under that section. The applicants have filed an Appeal No. 164/2000 against the final order dated 31.5.1999 passed by the Debts Recovery Tribunal, Delhi in OA No. 339/97. As per the impugned order there is a decree against all the appellants. A sum of Rs. 8,13,47,820.32 is to be recovered from the appellant Nos. 1, 2 and 3 and a sum of Rs. 1,03,86,677.76 is to be recovered from all the appellants along with one Mr. Umesh Luthra, who was defendant No. 7 in the said OA. Said Mr. Umesh Luthra has filed a separate appeal bearing No. 129/2000.
2. On perusal of the impugned order, it transpires that all the appellants, who were defendants in the said OA, failed to show cause before the Tribunal below. It appears that notices were sent to the appellants and when the same could not be served normally through registered post they were served by publication in March, 1998. The appellantNo. 1 appeared before the Tribunal below on 9.3.1998 and the appellants 2 to 5 appeared before the Tribunal below on 22.4.1998. It appears that all the appellants did not file written statement and failed to show cause as is apparent from the contents of the impugned order.
3. After the impugned order was passed, all the appellants have appealed against the impugned order on several grounds, inter alia, failure to follow the principles of natural justice having been afforded to the appellants.
4. In the application under consideration for waiver the following grounds, inter alia, have been taken :
(i) the impugned order has been passed without giving an opportunity for hearing the appellants; (ii) the appellants have a good case in appeal; (iii) the appellant No. 1 was a sick industrial company and rehabilitation of the
company was attempted before the BIFR/AAIFR but all rehabilitation schemes made were thwarted by the respondent Bank by its wilful acts of omission and commission which brought the appellant No. 1 company to its present precarious financial position;
(iv) the appellant No. I is facing extreme financial hardship and is in a position to deposit the required deposit;
(v) the appellant No. 1 has a good case of set-off against the respondent Bank; and
(vi) the appellants 2 to 6 have already employed their financial resources in rehabilitating the appellant No. 1 company and their personal assets are encumbered with Banks as collateral security. The appellants are not in a position to make deposit of the 75% of the debt found due by the Tribunal below.
5. This application has been vehemently opposed by the respondent Bank.
6. Heard learned Counsels for the parties. In this case what I find is that despite notice to the appellants and despite their having appeared before the Tribunal below, they failed to take any defence before the Tribunal below. They even did not file written statement and ultimately the Tribunal below had to pass ex parte decree saying that the appellants failed to show cause. After not contesting recovery application of the respondent Bank before the Tribunal below, now, the appellants in this appeal without any factual defences on record having been made prior to the passing of the impugned order, are now agitating before this Appellate Tribunal about correctness of the impugned order. There is no bar to such challenge but for considering their application under Section 21 of the Act, conduct of the appellants may be taken note of.
7. Admittedly, the appellants have availed loan facility of Rs. 1.77 crores from the respondent Bank. That amount has swelled to the decretal amount because of the interest which was to be paid on the principal sum. There is nothing on record to show that the appellants have repaid any part of the availed loan facility to the respondent Bank. Now, the appellants on the basis of the Balance Sheets of the appellant No. 1 and the alleged financial condition of the appellants 2 to 6, who were guarantors, are trying to impress this Appellate Tribunal that they are not in a position to pay the required 75% of the adjudged debt. This, in my view, is not fair. The interest of the creditor Bank has also to be seen especially when the appellants failed to show cause before the Tribunal below.
8. In my view, considering all the facts and circumstances of the case, there is no case for total waiver of the required deposit. The appellants may only be granted reduction in the said required deposit. I consider that the requirements of Section 21 of the Act would be met if the appellants deposit 35% of the adjudged debt. I order accordingly.
9. The application stands disposed of with the direction that required deposit under said Section 21 shall be 35% of the adjudged debt instead of 75%. Time for such deposit will be within two months from the date of receipt of this order by the appellants. This appeal will not be entertained if the appellants fail to deposit the said sum.
Copy of this order be sent to the parties by registered post.
