AMISH GUPTA vs PUNJAB NATIONAL BANK on 15 October 2026

1. The respondent no. 1 Punjab National Bank had filed Original Application bearing O.A no.136 of 2013 (T.A. No. 135 of 2015) titled as **Punjab National Bank V M/S General Power Company Private Limited & others** which was pending before DRT-II, Delhi(hereinafter referred to as the '**DRT**'). The appellant was impleaded as defendant no.3 in Original Application which was decreed vide final order dated 28.08.2025 (hereinafter referred to as the '**Impugned Final Order**'). The relevant portion of the impugned final order reads as under:-

1) I hereby allow this T.A. of the Applicant Bank and direct the defendant nos. 2 to 5 to pay jointly and severally to the applicant bank within 30 days from today, a sum of Rs.2037.01 Lacs along with cost, expenses and interest @15% from the date of filing of this O.A which has become TA till the date of realization. The defendant no.1 company has already been liquidated.

2) In case of failure to deposit the above amount within the stipulated period, the same shall be recovered from the sale of the hypothecated assets and the sale of the mortgaged properties bearing (i) Single Storey Godown situated at Khet No.2851, Plot no.6, Subhash Road, Near Nehrupur Chungi, Khurja, Distt. Bulandshahr, (U.P) (ii) Residential property situated at 478, Ram Bhawan, New Basti, Mohalla Holi Brahman, Khurja. In case of short fall, the same shall be recovered from the sale of personal movable and immovable assets of the defendant nos.2 to 5.

3) Recovery Certificate be issued forthwith and be sent to Recovery Officer, Debts Recovery Tribunal-II, Delhi.

2. The appellant being aggrieved by the impugned final order filed the present appeal along with application bearing I.A. No. 939/2025 for seeking complete waiver of mandatory pre-deposit under Section 21 of the Recovery of Debt due to Banks, 1993 (hereinafter referred to as 'Act') for entertainment of the appeals which is under consideration. The appellant in the application pleaded that this Tribunal in its exercise of inherent and equitable jurisdiction has power to waive or reduce the pre-deposit particularly where appellant is able to demonstrate exceptional circumstances directed towards complete failure of justice. This Tribunal vide order dated 09.07.2019 passed an I.A No. 375/2016 has allowed the counter claim and said order was never complied by the respondent no. 1. It was further argued that the impugned final order is a nullity due to statutory moratorium under section 33 (5) of the IBC. The DRT has passed the impugned final order without jurisdiction as such the impugned order is a nullity in view of section 65 of IBC. It is further contended that the demand amount is illegal/ arbitrary as the respondent no. 1 in the demand notice under section 13(4) of SARFAESI Act has demanded 17,66,68,911/- without any statement of account. The impugned final order was passed in wilful disobedience of direction given vide order dated 09.07.2019 passed in I.A. No 375/2016. The loan agreement executed between the parties was vitiated by fraud as per section 17 of Indian Contract Act. The respondent no. 1 cannot seek a parallel recovery that the appellant is having a strong prima facie case in the appeal. Accordingly, it was prayed that the mandatory pre-deposit as per section 21 of the RDB Act for the entertainment of appeal be waived. The respondent no. 1 did not file reply to the said application under disposal.

2.1 The appellant filed supplementary application bearing I.A. No. 129/2026 wherein pleaded that the Recovery Certificate bearing no. 232/2025 was issued only against the guarantors vide order dated 28.08.2025 which was erroneous and fictitious. The appellant being the guarantor is only liable with principal debtor. The DRT has committed grave error in issuing the impugned recovery certificate bearing no. 232/2025 and has not impleaded principal borrower i.e. respondent no. 1 as a necessary party for complete and effective adjudication. It was also stated that the contents of this application be also read as part of I.A no 939/2025. Sh. Hasmat Nabi, Advocate argued that the appellant despite being the guarantor is required to make pre-deposit as per the mandate of section 21 of the Act.

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3. The appellant in person and Sh. Hashmat Nabi, Advocate for respondent no. 1 advanced arguments. The relevant records are perused. The appellant also filed written submissions which are also perused and considered.

4. The appellant argued that DRT has not determined the amount due as per the mandate of the section 21 of the Act. The respondent no. 1 has shown highly excess amount before the recovery officer. The Corporate Debtor has already been admitted to CIRP. The appellant was the defendant no. 3 in the Original Application bearing no. 136/2013 (T.A no. 135/2015). The appellant being the aggrieved person within section 20 of the Act has preferred the present appeal. It was further argued that the Insolvency and Bankruptcy Code, 2016 is a complete code in itself which vested exclusive jurisdiction in the National Company Law Tribunal to determine the liability of a personal guarantor as per various legal proposition as contained in IBC. The appellant has referred section 14 and 33(5) of IBC read with overriding effect of section 238 of IBC and argue that there is bar regarding the institution or continuation of any proceeding against the Corporate Debtor outside the Adjudicating Authority once CIRP or litigation commences. It was vehemently argued that the no forum other than the National Company Law Tribunal can determine the liability against the Corporate Debtor. It was also argued that the liability of the guarantor under section 128 of the Indian Contract Act, 1872 is derivative and co-extensive with the principal debtor. The respondent no. 1 was admitted to CIRP on 02.07.2019 and ordered into liquidation on 22.07.2020 and stand dissolved with effect from 12.06.2026. The appellant has also argued that there was no debt within the meaning of section 2(g) of the Act capable of supporting any pre-deposit. The appellant has also advanced other arguments as detailed in the written submissions along with extensive case law as detailed in the reply as well as written submissions.

5. It is relevant to discuss the relevant legal proposition and the law as laid down by the superior courts before addressing the factual and legal controversy between the parties. Section 20 of the Act deals with appeals to the Appellate Tribunal and section 21 provides that no appeal shall be entertained unless the guarantor has deposited with the Appellate Tribunal 50% of the amount of the debt sue from him as determined by the DRT. It also provides that the Appellate Tribunal may for the reasons to be recorded in writing reduce the amount to not less than 25% of the debt. Section 2 (g) defines debt which means any liability (inclusive of interest)

--- which is claimed as due from any person by a bank or financial institution etc. Section 21 of the Act reads as under-:

**21. Where an appeal is preferred by any person from whom the amount of debt is due to a bank or a financial institution or a consortium of banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal fifty percent of the amount of debt so due from him as determined by the Tribunal under section 19**

**Provided that the Appellate Tribunal may, for reasons to be recorded in writing, reduce the amount to be deposited by such amount which shall not be less than twenty-five percent of the amount of such debt so due] to be deposited under this section.**

**5.1** The Supreme Court in **Kotak Mahindra Bank Pvt. Ltd. V Ambuj A Kasliwal and others**, Civil Appeal No.538/2021, decided on 16.02.2021, has observed that even the High Court does not have the power to waive the pre-deposit in its entirety, nor can it exercise discretion, which is against the mandatory requirement of the statutory provisions. It was further held that 50%of the decretal amount i.e. the debt due is to be deposited before the DRAT as a mandatory requirement but in appropriate cases for reasons to be recorded the deposit of at least twenty-five per cent of the debt due would be permissible, but not entire waiver. Therefore, any waiver of pre-deposit to the entire extent would be against the statutory provisions and, therefore, not sustainable in law. The Supreme Court also referred **Narayan Chandra Ghosh V UCO Bank and Others**, (2011) 4 SCC 548 wherein on the basis of Section 18(1) of the SARFAESI Act observed that it confers a statutory right on a person aggrieved by any order made by the Debts Recovery Tribunal under Section 17 of the Act to prefer an appeal to the Appellate Tribunal but the right conferred under Section 18(1) is subject to the condition laid down in the second proviso thereto which postulates that no appeal shall be entertained unless then 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, whoever is less. The Appellate Tribunal has the power to reduce the amount, for the reasons to be recorded in writing, to not less than twenty-five per cent of the debt, referred to in the second proviso. It was accordingly held that there is an absolute bar to entertainment of an appeal under Section 18 of the Act unless the condition precedent, as stipulated, is fulfilled. It is accepted legal proposition that before entertaining an appeal under section 20 of the RDB Act, the requirement of making pre-deposit as per section 21 of the RDB Act is mandatory. Section 21 admits no exception from making pre-deposit once the amount of

--- debt so due from any person is determined by the Tribunal under section 19 of the RDB Act.

6. It is reflecting from the record that the respondent filed T.A. no. 135 of 2015 titled as **Punjab National Bank V M/s General Power Company Private Limited and others** which was decided vide final order dated 28.08.2025 and Recovery Certificate dated 09.09.2025 was issued. DRT vide impugned order dated 28.08.2025 has directed the defendant no. 2 to 5 including the appellant as defendant no. 3 to pay jointly and severally to the respondent no.1 a sum of Rs.2037.01 Lacs along with cost expenses and interest @15% from the date of filing of Original Application till realisation. The recovery Certificate was also ordered to be issued. The DRT as such determine the debt against the appellant being the defendant no. 3 in the Original Application. It is also pertinent to mention that the appellant could not prove claimed as mentioned in the written statement.

6.1 The appellant primarily contended and argued that DRT has not determined the amount due as per the mandate of the section 21 of the Act and the respondent no. 1 has shown highly excess amount before the recovery officer. The appellant also argued that the Corporate Debtor has already being admitted to CIRP and NCLT is having jurisdiction to determine the liability of a personal guarantor as per IBC. The appellant also argued that the liability of the guarantor under section 128 of the Indian Contract Act, 1872 is derivative and co-extensive with the principal debtor. It was further argued that there was no debt within the meaning of section 2(g) of the Act capable of supporting any pre-deposit. The arguments and the contentions of the appellant were considered in the right perspective. The arguments advanced by the appellant may be good on the merits of the case but not on the application filed to decide the issue of making pre-deposit. As stated hereinabove DRT vide final order dated 28.08.2025 has already determined the amount due from the defendants of the Original Application including the appellant. It was specifically mentioned that all the defendants of the Original Applications are jointly and severally liable to pay the decretal amount. There is no legal force in the arguments advanced by the appellants that the liability of the appellant being the guarantor is co-existent with the liability of the principal borrower which has already been admitted to CIRP. IBC does not oust the jurisdiction of the DRT in determining the amount due against the borrower or the guarantor or both as per section 19 of the

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Act. The arguments as advanced by the appellant are ill founded and misconceived and cannot be legally accepted. The decisions/ judgements delivered by superior courts and others at this stage are not providing any help or assistance to the arguments as advanced by the appellants. The appellant is not entitled for waiver of making of pre-deposit as per section 21 of the Act.

7. Section 21 of the Act mandates making of pre-deposit on amount of due as determined by the tribunal. Section 2(g) of the Act defines the debt which means any liability inclusive of interest which is due against a person and legally recoverable on the date of application. DRT vide final order dated 28.08.2025 has determined the liability at Rs. 2037.01 Lacs. The appellant is liable to make pre-deposit on the said amount. The appellant after considering all facts is directed to make pre-deposit of 35% of the amount. The appellant is further directed to make pre-deposit so directed by this order within four weeks from today. The application for waiver of pre-deposit is decided accordingly.

**Appeal No. 207/2026**

8. List on 12.01.2027 for further arguments.

A pink rectangular sticky note with the handwritten letters 'sd' in blue ink. It is placed over a horizontal dashed line.

**(Dr. Justice Sudhir Kumar Jain)** **Chairperson**

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