M/S DAVAMANGALA DEVI MODERN RICE MILL vs STATE BANK OF INDIA on 16 December 2025

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

Dated this 16th day of December, 2025

PRESENT: SHRI SHARANG DHAR UPADHYAY

PRESIDING OFFICER

NDN App. No.928 of 2025

M/s Davamangala Devi Modern Rice Mill

A Partnership firm

Rep. by its Managing Partner, Mrs. V. Rajeswari No.10, Main Road, Kambilikarankuppam Chellancheri Post, Puducherry – 605 106

Also at

R.S. No.240/5 10, Kambalikarankuppam

Embalam, Nettapakkam, Coimbatore

Bahour, Pondicherry

...Petitioner / Borrower

Versus

1.

The Chief Manager

State Bank of India, SARB

Egmore, Chennai

…Certificate Holder / Applicant Bank

2.

Yuvaraj R

Son of Radhakrishnan

No.6, Main Road, Anna Nagar

Neolithope, Pondicherry

…Respondent / Auction Purchaser

ORDER ON MAINTAINABILITY

1.

The present appeal has been filed under Section 30 of the Recovery of Debts and Bankruptcy Act, 1993 challenging the order dated 02.06.2025

passed by the Ld. Recovery Officer, DRT-II, Chennai under Rule 63(1) of

the Second Schedule to the Income Tax Act, 1961 read with Sections 25 to 29 of the RDB Act, confirming the sale of immovable properties described in Schedule ‘C’ and ‘G’ of Tender Document TRC No.99/2022 dated 24.03.2025.

2.

At the scrutiny stage, the Registry raised an objection that the appeal is not maintainable without compliance with Section 30A of the RDB Act, which mandates deposit of 50% of the amount of debt due as determined by the Tribunal, the appellant admittedly being a borrower from whom the debt is due.

3.

The appellant replied stating that, the appeal was initially filed on 29.05.2025 challenging the auction sale conducted on 30.04.2025, during pendency of scrutiny, the impugned order confirming sale was passed on 02.06.2025, necessitating the present challenge, since the appeal is against an order of confirmation of sale and not against determination of debt, the requirement of pre-deposit does not arise.

4.

In view of the submissions of the appellant the Registry has placed this case before the Bench for hearing on the question of maintainability.

5.

Heard the Ld. Counsel appearing on behalf of both the parties.

6.

Ld. Counsel for the appellant relied on the judgment of the Hon’ble High Court of Allahabad in Special Appeal No.165 of 2022 dated 16.05.2022 and stated that the appellant is entitled for the relief prays for.

7.

Per contra, the Ld. Counsel for the respondent Bank submitted that the appellant is an admitted borrower and defaulter and the appeal arises out of recovery proceedings initiated pursuant to a certificate of recovery. It is submitted that Section 30A of the RDB Act is mandatory in nature and the Tribunal lacks jurisdiction to entertain the appeal without pre-deposit.

Ld. Counsel placed reliance on the judgment of the Hon’ble High Court of Madras in W.P. No.1690 of 2016 dated 04.08.2021 in support of his contention.

8.

Having heard the Ld. Counsel and after perusing the record, this Tribunal is of the view that the only issue that arises for consideration is whether an appeal filed under Section 30 of the RDB Act by a borrower challenging an order of confirmation of sale passed by the Recovery Officer can be entertained without compliance with Section 30A.

9.

Section 30(1) of the RDB Act confers a right of appeal against the orders of the Recovery Officer and Section 30A clearly stipulates that:

“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 institutions, such appeal shall not be entertained by the Tribunal unless such person has deposited with the Tribunal fifty per cent of the amount of debt due as determined by the Tribunal.”

10.

Therefore, it is very clear that the compliance of Section 30A of the RDB Act is mandatory for entertaining an appeal filed under Section 30 of the RDB Act.

11.

In the present case, the appellant is admittedly a borrower from whom the debt is due, the recovery proceedings culminating in the auction sale and its confirmation are direct consequences of the determination of debt by the Tribunal and issuance of Recovery Certificate, the order of confirmation of sale cannot be viewed in isolation from the recovery proceedings as a whole. Further, merely because the challenge is to an order of the Recovery Officer confirming sale, the appellant cannot be permitted to bypass the statutory requirement of pre-deposit, as such an interpretation would render the Section 30A nugatory and defeat the object of the Act, which is expeditious recovery of public dues.

12.

The reliance placed on the judgment of the Hon’ble High Court of Allahabad in Special Appeal No.165 of 2022 is misplaced, as the said decision was rendered in distinct factual circumstances and does not lay

down a general proposition dispensing with the statutory pre-deposit under Section 30 of the RDB Act. On the other hand, the Hon’ble High Court of Madras in W.P. No.1690 of 2016 has emphasized that statutory conditions governing appellate remedies under the RDB Act cannot be diluted or ignored, and tribunals are bound to act within the four corners of the statute. Therefore, this Tribunal, being a creature of statute, has no discretion to waive or dispense with the mandatory pre-deposit prescribed under Section 30A of the RDB Act.

13.

In view of the foregoing discussion, it is held that the present appeal is not maintainable without compliance with Section 30A of the RDB Act.

14.

In the result, the following: