MANJUKUNVARBA NIRABHAYSINH RAO vs BANK OF BARODA on 9 January 2020

<table border="1"><thead><tr><th data-bbox="48 88 178 108">DATE</th><th data-bbox="178 88 812 108">DESCRIPTION OF THE ORDER</th><th data-bbox="812 88 947 108">REMARK</th></tr></thead><tbody><tr><td data-bbox="48 108 178 947">9.1.2020<br/><br/>Present :</td><td data-bbox="178 108 812 947"><p style="text-align: center;"><u>Exh-06</u></p><p style="text-align: right;">Appeal No. 01/2020</p><p>Mr. Devdit Brahmhatt, Ld. counsel for appellant</p><p>Mr. H.H. Mehta, Ld. counsel for Respondent Bank</p><p>I have heard Ld. Counsels for the parties Counsel for the Appellant submitted that by sale of one of the property under Securitization Act bank has already recovered Rs. 51.96 lakhs it is further submitted that property belongs to that appellant Guarantor and it is further submitted that this Tribunal passed Recovery Certificate for Rs. 3,90,08,132.96 on 15.11.18 and now Recovery Officer has opted to proceed against other properties of appellant and being aggrieved with the orders passed by Ld. Recovery Officer, appellant has preferred this appeal under section 30 of Act, 1993. He further submitted that as bank has already recovered Rs. 51.96 lakhs, so the appellant may be exempted from deposit of amount required as pre-condition deposit in terms of section 30A of Act, 1993.</p><p>He further relied upon judgment of Hon'ble Rajasthan High Court in case writ petition no. 25734/2018 XLO India, Mumbai and other Versus Union of India and others limited 2019 RAJ 113</p><p>In reply, Counsel for bank submitted that this Tribunal issued Recovery Certificate against certificate debtors holding their joint and several liability and recovery of amount by sale of property under Securitization Act would not affect liability to deposit amount under section 30A of Act, 1993.</p></td><td data-bbox="812 108 947 947"></td></tr></tbody></table>

<table border="1"><thead><tr><th data-bbox="51 88 183 111">DATE</th><th data-bbox="183 88 818 111">DESCRIPTION OF THE ORDER</th><th data-bbox="818 88 951 111">REMARK</th></tr></thead><tbody><tr><td data-bbox="51 111 183 943"></td><td data-bbox="183 111 818 943"><p>He further submitted that the judgment cited on behalf of appellant is not applicable to facts and circumstances of present case and even in that judgment, Hon'ble High Court has upheld the validity of section 30A of Act, 1993.</p><p>I have heard Ld. Counsels for the parties and also gone through the record. Before proceeding further, I would like to reproduce section 30A of Act, 1993.</p><p>Before proceeding further I would like to reproduce relevant portion of Judgement of Hon'ble Rajasthan High Court in Xlo India Limited V/s Union of India, D.B. Civil Writ Petition No. 25734/2018:</p><p><i>Character of those who are defaulters, and have been adjudged liable to repay the loan amount, cannot be judged on the basis of their capacity to repay. Further the contention that Section 30A of the Act does not make any reasonable classification between the good and the bad borrower and treats the borrowers who have discharged their debt during the course of execution proceedings at par with those who have not done so, does not appeal to logic as there are not good or bad borrowers. They would rather be considered on the basis of the adjudication made by the DRT as judgment debtor held liable to make payment of the amount due as determined by the Tribunal. There is no substance in the argument that Section 30A is violative of Article 14 as it discriminates between the parties who are financially capable to make pre-deposit with those who are not so capable. Appeals challenging the order passed by the Recovery Officer are invariably filed by only those who are found guilty of not making payment of dues of the banks and financial institutions.</i></p><p><i>Section 30A applies equally to all whoever seeks to assail the order of the Recovery Officer. Section 30A places a reasonable restriction on the right of the defaulters/borrowers/guarantors or debtors if they decide to challenge the order of the Recovery Officer in appeal requiring them to make deposit of 50% of the amount as determined by the Tribunal. This has got intelligible differentia underlying it and a reasonable nexus with the object sought to be achieved, i.e., to curb the tendency of filing multiple number of appeals or frivolous appeals so as to delay the proceedings xxxxxx</i></p><p><i>Even if there are two views possible making one as constitutional and another unconstitutional, it must lean in favour of its constitutionality. The Court cannot strike down an enactment or part of it just by holding that it is arbitrary or unreasonable or irrational xxxxxx</i></p></td><td data-bbox="818 111 951 943"></td></tr></tbody></table>

<table border="1"><thead><tr><th data-bbox="53 83 188 110">DATE</th><th data-bbox="188 83 822 110">DESCRIPTION OF THE ORDER</th><th data-bbox="822 83 960 110">REMARK</th></tr></thead><tbody><tr><td></td><td><p><i>we find that the impugned condition in Section 30A of the Act of 1993 cannot be said to be arbitrary or discriminatory inasmuch as it applies equally to all whoever decides to challenge the order of the Recovery Officer xxxxxx</i></p><p><i>The alternative prayer made by the petitioner that the words "debt due as determined by the Tribunal" may be severed from the remaining Section 30A of the Recovery of Debts and Bankruptcy Act, 1993, is noted to be rejected xxxxx</i></p><p><i>It has to be therefore necessarily read as debt due against the person who is seeking to prefer an appeal. This can be explained with an example. Suppose, in a given case, if there are three debtors and the Tribunal has determined the amount of debt due to be deposited by each one of them jointly and severally, fifty per cent of the entire amount would be required sum of pre-deposit, which anyone of them filing the appeal against the order of Recovery Officer, would be required to deposit. However, if the Tribunal has determined individual liability for each of them separately, the amount of the "debt due as determined by the Tribunal" shall have to be read down as the amount due as quantified by the Tribunal against such person from whom recovery has to be made xxxxxxx</i></p><p><i>in the event of any dispute about the "debt due as determined by the Tribunal" against such person, the Tribunal would be the appropriate body to decide as to what amount of debt was determined as due from the person who has preferred such appeal so as to quantify the requisite amount of predeposit. Merely because this provision has not been properly articulated, cannot be a reason to strike it down xxxxxx</i></p><p><i>can be taken care of by invoking the doctrine of reading down rather than striking down the provision of Section 30A or by invoking doctrine of severability xxxxxxx</i></p><p>(30A. Deposit of amount of debt due for filing appeal against orders of the Recovery Officer</p><p>Where an appeal is preferred against any order of the Recovery Officer, under section 30, by any person from whom the amount of debt is due to a bank or financial institution or consortium of banks or Financial Institution such appeal shall not be entertained by the Tribunal unless such Person has deposited with the Tribunal 50% of the amount of debt due as determined by the Tribunal.)</p></td><td></td></tr></tbody></table>

<table border="1"><thead><tr><th data-bbox="31 83 168 111">DATE</th><th data-bbox="168 83 803 111">DESCRIPTION OF THE ORDER</th><th data-bbox="803 83 934 111">REMARK</th></tr></thead><tbody><tr><td data-bbox="31 111 168 945"></td><td data-bbox="168 111 803 945"><p>As per said provision if any person aggrieved with the any order of Recovery Officer opts to file appeal with view to challenge the same before this Tribunal is required to deposit 50% of the amount due as determined by this Tribunal.</p><p>Having considered contentions, it is an admitted case that after issuance of Recovery Certificate, the Certificate Debtors have not paid even a single penny to the bank towards satisfaction of Recovery Certificate. It is a case of joint and secured liability of consolidated debts. Whatever amount has been recovered by the bank is recovered from sale of property under Securitization Act. Even if, we give full benefit of so recovered amount (although it cannot be given) that would not meet with the statutory requirement of 50% of the debt determined by this Tribunal. Under the provision of section 30A of act, 1993, there is no provision for waiver of amount as envisaged in section 18 of Securitization and Reconstruction of Financial Institution Act, 2002.</p><p>Under this given circumstances, opportunity has been given to appellant to deposit 50% of that due so that the appeal filed by the appellant may be entertained to examine the contentions raised in the appeal can be considered on merits. Appellant and Counsel for appellant shown inability to deposit such amount as per requirement of section 30A of Act, 1993.</p><p>Under given circumstances I have no other option but to dismiss this appeal for non-compliance of section 30A of Act, 1993. Appeal is accordingly dismissed. Let copies be supplied as per rules.</p></td><td data-bbox="803 111 934 945"></td></tr></tbody></table>

(VINAY GOEL) PRESIDING OFFICER DRT-I, AHMEDABAD