M/S U.P. STATE TEXTILE CORPORATION LTD. vs INTERNATIONAL ASSET RECONSTRUCTION COMPANY PRIVATE LIMITED on 7 October 2025

<table border="1"><thead><tr><th data-bbox="10 104 188 138">DATE</th><th data-bbox="188 104 661 138">DESCRIPTION OF ORDER</th><th data-bbox="661 104 840 138">REMARKS</th></tr></thead><tbody><tr><td data-bbox="10 138 188 957">Appeal No. 01/2025<br/>07.10.2025</td><td data-bbox="188 138 661 957"><p>Feeling aggrieved of order dt. 11.12.2024 of Ld. Recovery Officer-I, DRT Allahabad, the appellants (borrowers) have filed this appeal u/s 30 of the Recovery of Debts and Bankruptcy Act, 1993(Act) before this Tribunal.</p><p>The controversy is whether the appellants are really aggrieved of order dt. 11.12.2024 or in the garb of this appeal, they actually intend to get the attachment of order immovable property dt. 10.01.2021 of the Ld. Recovery Officer is set aside.</p><p>The contention of the contesting respondent (Company) as raised by way of preliminary objections/ maintainability are that the borrowers actually want to get the order dated 10.01.2021 set aside, the appeal is time barred and the Tribunal has no jurisdiction to condone the delay caused in filing appeal preferred u/s 30 of the Act.</p><p>Further, the borrowers have not deposited the requisite mandatory pre-deposit before filing appeal and the appeal is hit by Section 30A of the Act.</p><p>The factual background of the case is as under:-</p><p>Original Application bearing No. 161 of 2000 was filed u/s 19 of the Act by four banks against the appellants-borrowers for recovery of amount which they claimed was due from the borrowers. Certain properties were mortgaged by the appellants to secure the repayment of the loan, including their manufacturing unit at Sandila.</p><p>Bank of Baroda, the lead bank assigned its loan in respect of Sandila unit in favour of the contesting respondent i.e. International Asset Reconstruction Company, which was to the tune of Rs. 6,54,36,093.33ps. The contesting</p></td><td data-bbox="661 138 840 957"></td></tr></tbody></table>

<table border="1"><thead><tr><th data-bbox="10 103 190 138">DATE</th><th data-bbox="190 103 660 138">DESCRIPTION OF ORDER</th><th data-bbox="660 103 840 138">REMARKS</th></tr></thead><tbody><tr><td data-bbox="10 138 190 957"></td><td data-bbox="190 138 660 957"><p>respondent joined the OA, as applicant no. 1-A.</p><p>ii. Appellants, did not contest the OA despite filing their written statement and were proceeded against exparte.</p><p>The OA was allowed by this Tribunal exparte. The claim of contesting respondent amounting to Rs. 6,54,36,093.33ps. was decreed with pendentelite and future interest @ 12% from the date of filing of the OA till as per realization of the amount vide order dated 19.06.2018.</p><p>On appeal, preferred by the contesting respondent, the Hon'ble DRAT, Allahabad enhanced the rate of Interest payable on the amount due (Rs. 6,54,36,093.33ps.) to 16% per annum with quarterly rests from date of filing of OA till realization.</p><p>Against this order dated 21.08.2019, of Hon'ble DRAT, the appellants have filed a writ petition before the Hon'ble High Court, and the same is pending.</p><p>DRC Case No. 442 of 2018 pertains to the OA No. 161 of 2000. The execution of Judgement / order passed in that case is being put to execution by the contesting respondent before the Ld. Recovery Officer-I, DRT Allahabad. An application was filed by the contesting respondents for the allotment of movable and immovable property of the appellants and on that application and pursuant to order dated 08.01.2021 of the Hon'ble High Court in Writ petition No. 23527 of 2020, the Ld. Recovery Officer -I ordered attachment of three properties of the appellants (borrowers) namely:-</p><ul style="list-style-type: none;"><li>i. Vastra Bhawan, Sharda Nagar, Kanpur Nagar.</li><li>ii. Textile Mill of U.P. State Textile Corporation Ltd. Sandila.</li><li>iii. Textile Mill of U.P. State Textile Corporation Ltd., situated at</li></ul></td><td data-bbox="660 138 840 957"></td></tr></tbody></table>

<table border="1"><thead><tr><th data-bbox="10 103 188 138">DATE</th><th data-bbox="188 103 658 138">DESCRIPTION OF ORDER</th><th data-bbox="658 103 838 138">REMARKS</th></tr></thead><tbody><tr><td data-bbox="10 138 188 956"></td><td data-bbox="188 138 658 956"><p>The sole contention of the appellants is that these properties were not mortgaged with the contesting respondent (IARC) therefore, the Ld. R.O. was not legally competent to attach these properties in the execution proceedings and order dated 19.01.2021 of Ld. R.O. ordering attachment of these three properties, is null and void. It seems that other three banks - the other applicants compromised the matter with the appellants after receiving amount as "decreed by DRT Allahabad".</p><p>Thereafter, the appellants filed an application before the Ld. Recovery Officer, with a prayer that the loan of contesting respondent (IARC) pertained to Sandila Unit only, It was not authorised/ entitled to get the other two properties at Jhansi and Kanpur attached towards execution, the order dated 19.1.2021 of Ld. Recover Officer attach these properties, is wrong. The property situated at Jhansi and Kanpur were released ordered to be released as the State Government intends to develop the said properties of Industrial activities etc.</p><p>This application seeking modification of order dated 19.01.2021, was dismissed by the Ld. R.O. vide order dated 11.12.2024 and now the appellants are in appeal u/s 30 of the Act.</p><p>I have heard and Ld. Counsel and perused the record with due. I have discussed the facts in detail, in the preceding paras of this order. Doctrine of merger is an important principle of law. It states that when an order/ Judgement of lower court is altered / modified / reversed/ upheld in appeal, then it merges with the decree / order of the appellate Court. It losses its existence, moment the decree / order is passed by the Appellate Court. The Judgment of this authority in OA on 19.06.2018 was modified by the</p></td><td data-bbox="658 138 838 956"><p>6 ✓</p></td></tr></tbody></table>

<table border="1"><thead><tr><th data-bbox="10 105 188 138">DATE</th><th data-bbox="188 105 660 138">DESCRIPTION OF ORDER</th><th data-bbox="660 105 840 138">REMARKS</th></tr></thead><tbody><tr><td data-bbox="10 138 188 958"></td><td data-bbox="188 138 660 958"><p>Hon'ble DRAT under order dated 21.08.2019.</p><p>So there is no order dated 19.06.2018 which is capable of execution now as it merged in the order dated 21.08.2019 of the Hon'ble DRAT. Thereafter, as per order dated 21.08.2019 of the Hon'ble DRAT the contesting respondent is entitled to claim the amount due with interest @ 16% per annum with quarterly rests. The calculation that other banks have settled the matter with appellants as per decree of DRT and they are ready to pay this amount to the contesting respondent as per decree of DRT, becomes meaningless. The contesting respondent is entitled to claim interest as per order of the Hon'ble DRAT Allahabad unless, this order is set aside by the Hon'ble High Court.</p><p>As per section 25 of the RDBA, 1993 the amount can be received by attachment and sale of movable and immovable property of the debtor, whether any interest has been secured or not secured against such properties. The attachment of three units thus cannot be assailed on this ground that no interest was secured against this of these properties i.e. Jhansi and Kanpur in favour of IARC.</p><p>As comes out the appellants are actually aggrieved of order dated 19.01.2021 of Ld. R.O. -I Allahabad as vide the said order three lots were attached. The appeal was required to be filed within 30 days from the order, but it was filed on 28.01.2025. it is clearly barred by the limitation. In the garb of the order dated 11.12.2024 of Ld. R.O. the appellants cannot challenge and set aside the main order dated 19.01.2021 attachment of property in question</p></td><td data-bbox="660 138 840 958"><p>6 ✓</p></td></tr></tbody></table>

<table border="1"><thead><tr><th data-bbox="10 105 188 138">DATE</th><th data-bbox="188 105 658 138">DESCRIPTION OF ORDER</th><th data-bbox="658 105 840 138">REMARKS</th></tr></thead><tbody><tr><td data-bbox="10 138 188 958"></td><td data-bbox="188 138 658 958"><p>Since the appellants wanted to get rid of order dt. 19.1.2021 of the Ld. RO-1, they were required to file appeal u/s 30 of the RDB Act within 30 days from the date of passing of aforesaid order. The appeal as stated earlier was filed much later on 28.1.2025. This appeal is barred by limitation and even this Tribunal has no jurisdiction to condone the delay caused in filing this appeal which is practically preferred against the order dt. 19.1.2021 of the Ld. RO-1.</p><p>That a-part as per section 30A of the RDB Act the appellants were required to deposit 50% of the amount due before filing appeal. This pre-deposit is a mandatory condition and cannot be waived off. Without pre-deposit, the appeal is not maintainable. Admittedly, this amount was never deposited by the appellants. Therefore, the preliminary objection of the contesting respondent are valid. The appeal as such is dismissed.</p><p>Record be consigned.</p><p style="text-align: center;"><i>Virender Sharma</i><br/><b>(VIRENDER SHARMA)</b><br/>Presiding Officer</p></td><td data-bbox="658 138 840 958"></td></tr></tbody></table>