KOTAK MAHINDRA BANK PVT. LIMITED versus AMBUJ A. KASLIWAL & ORS. on 16 February 2021

[2021] 3 S.C.R. 1001

KOTAK MAHINDRA BANK PVT. LIMITED

v.

AMBUJ A. KASLIWAL & ORS.

(Civil Appeal No. 538 of 2021)

FEBRUARY 16, 2021

[S. A. BOBDE, CJI, A. S. BOPANNA ANDV. RAMASUBRAMANIAN, JJ.]

Recovery of Debts and Bankruptcy Act, 1993 – s.21 – Appealbefore DRAT – Pre-deposit of the debt due – Waiver – Sustainabilityof – Held: In all cases fifty per cent of the decretal amount i.e. thedebt due is to be deposited before DRAT as a mandatory requirement,but in appropriate cases for reasons to be recorded the deposit ofat least twenty-five per cent of the debt due would be permissible,but not entire waiver – When further amount is due and payable indischarge of decree/recovery certificate issued by DRT, the HighCourt does not have the power to waive the pre-deposit in its entirety,nor can it exercise discretion against the mandatory requirement ofthe statutory provision –Any waiver of pre-deposit to the entire extentwould be against the statutory provisions – High Court not justifiedin setting aside the order passed by DRAT – Order passed by HighCourt set aside – In the peculiar facts of the present case, the pre-deposit of twenty-five per cent of the amount as taken note by theDRAT is permitted – Order passed by the DRAT modified to thisextent.

Words & Phrases – s.21 – “appeal shall not be entertained”– Held: Such phrase injuncts the Appellate Tribunal fromentertaining an appeal by a person from whom the amount of debtis due to the Bank, unless such person has deposited with theTribunal, fifty percent of the amount of debt so due – Recovery ofDebts and Bankruptcy Act, 1993 – ss.21,19.

Partly allowing the appeal, the Court

HELD: 1.1 A perusal of Section 21 of the Recovery of Debtsand Bankruptcy Act, 1993 (RDBA) which employs the phrase“appeal shall not be entertained” indicates that it injuncts theAppellate Tribunal from entertaining an appeal by a person from

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Awhom the amount of debt is due to the Bank, unless such personhas deposited with the Appellate Tribunal, fifty percent of theamount of debt so due from him as determined by the Tribunalunder Section 19 of the Act. The proviso to the said Section,however, grants the discretion to the Appellate Tribunal to reducethe amount to be deposited, for reasons to be recorded in writing,Bbut such reduction shall not be less than twenty-five per cent ofthe amount of such debt which is due. Hence the pendulum ofdiscretion to waive pre-deposit is allowed to swing between fiftyper cent and twenty-five per cent of the debt due and not belowtwenty-five per cent, much less not towards total waiver. It is inCthat background, keeping in perspective the said provision, theDRAT has in the instant case ordered deposit of fifty per cent ofthe amount. The respondents No.1 and 2 while seeking waiverof the deposit have essentially projected the case to indicate thatthe recovery certificate ordered by the DRT is for the sum ofRs.145 Crores with interest at 9% per annum and the amountDrealised by the Bank from the compensation amount payable torespondent No.3 is itself a sum of Rs.152,81,07,159/- and as suchthere is no debt due. [Para 10][1008-E-H; 1009-A-B]

1.2 The High Court has proceeded at a tangent whileadverting to the aspect of recovery made towards the loan amountEfrom the land acquisition compensation payable to respondentNo.3. The conclusion appears to be that the receipt of thecompensation amount even though was before passing of thedecree, would wipe out the decretal amount of Rs.145 Croreswith interest at 9% per annum, though it has not been expresslyFstated so. Per contra, the DRAT by its order dated 27.02.2019while directing the pre--deposit of fifty per cent of the amounthad taken note of the fact that if the decretal amount as orderedby the DRT is taken into consideration and the amount receivedby the Bank towards the compensation amount is credited, the

balance of the decretal amount payable by respondents No.1 to 3Gwould work out to Rs.68,18,92,841/-. It is in that view, the DRAThas ordered pre-deposit of fifty per cent of the said amount whichstill remains to be a debt due. On that aspect, though the ultimatecorrectness of the actual amount due is a matter for calculationto be made in the execution proceedings, for the present, for theHpurpose of pre-deposit if the decree/recovery certificate issued by the DRT is taken into consideration the position is clear thateven if the amount of compensation is appropriated, either beforeor after the decree, there would still be outstanding amountpayable which would be the subject matter of the appeal in DRAT,apart from the fact that the appellant Bank in their appeal areclaiming the entire amount which has fallen due since the termsof settlement was not adhered to. [Para 12][1009-F-H; 1010-A-D]

1.3 When prima facie it was taken note by the DRAT thatfurther amount was due and the pre-deposit was ordered, withoutfinding fault with such conclusion the High Court was not justifiedin setting aside the orders passed by the DRAT. All that the HighCourt has concluded is that the benefit of the receipt ofRs.152,81,07,159/- as against the decretal amount cannot bedenied though it was received before passing of the finaljudgment. Such conclusion in any event could not have tilted thebalance in favour of the respondents No.1 and 2 to waive theentire pre-deposit, unless the High Court had rendered acategorical finding that the entire decretal amount stands satisfiedfrom such receipt and there was no debt due which in any eventwas beyond the scope of consideration in a petition of the presentnature. On the other hand, the DRAT having taken note of thedecretal amount, the receipt of the amount credited ascompensation and, having further noted the debt is still due, hasdirected the pre-deposit limited to that extent. For the present,the amount as indicated in the order passed by the DRAT is takenote of. Hence, for the purpose of determining the pre-deposit,the decretal amount due is taken at Rs.68,18,92,841/-.[Paras 13,16][1010-D-G; 1013-B-C]

1.4 In the facts and circumstances arising herein, whenfurther amount is due and payable in discharge of the decree/recovery certificate issued by the DRT in favour of the appellant/Bank, the High Court does not have the power to waive the pre-deposit in its entirety, nor can it exercise discretion which isagainst the mandatory requirement of the statutory provision ascontained in Section 21. In all cases fifty per cent of the decretalamount i.e. the debt due is to be deposited before the DRAT asa mandatory requirement, but in appropriate cases for reasons ABC

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Ato be recorded the deposit of at least twenty-five per cent of thedebt due would be permissible, but not entire waiver. Therefore,any waiver of pre-deposit to the entire extent would be againstthe statutory provisions and, therefore, not sustainable in law. Atotal waiver would be against the statutory provisions. The orderpassed by the High Court is set aside. However, in the instantBcase, taking note that though the issue relating to the actualamount due is to be considered by the DRAT, keeping in viewthe fact that the DRT has taken into consideration the earliersettlement and has accordingly decreed the claim to that extentand towards such decree since payment of a major portion is made,Cthough by appropriation of the compensation amount andadmittedly since the remaining properties belonging torespondent No.3 is available by way of mortgage and therespondents No.1 and 2 are the personal guarantors, in thepeculiar facts and circumstances of this case the respondentsno.1 and 2 are permitted to pre-deposit twenty-five per cent ofDthe amount as taken note by the DRAT i.e. twenty-five per centof Rs.68,18,92,841/-. To the said extent, the order passed by theDRAT is modified. [Paras 14, 17 and 20][1010-G-H; 1011-A-B;1013-D-G]

Narayan Chandra Ghosh v. UCO Bank and OthersE(2011) 4 SCC 548 : [2011] 3 SCR 1024 – relied on.

Case Law Reference

[2011] 3 SCR 1024relied onPara 14

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 538Fof 2021.

From the Judgment and Order dated 16.07.2019 of the High Courtof Delhi at New Delhi in Writ Petition (Civil) No. 7530 of 2019.

With

GCONT.PET.(c)No. 569/2020 in SLP(c) No. 21555/2019

V. Giri, Mukul Rohatgi, Ritin Rai, Mukul Rohatgi, Sr. Advs., SureshD Dobhal, Shikhar Kumar, Gaurav Agrawal, Ankur Sood, Ms. RomilaMandal, Ankush Bhardwaj, Kaushik Laik, Sh. Ambuj Kasliwal, Sh. VikasKasliwal, Ms. Jayashree Shukla Dasgupta, Ms. Saloni Chowdhry, Karan H

Batura, Ms. Akhil P. Chhabra, Ms. Ritu Chhabra, Sumeer Sodhi, Advs.for the appearing parties.

The Judgment of the Court was delivered by

A. S. BOPANNA, J.

1. Leave granted.

2. The appellant is before this Court assailing the order dated16.07.2019 passed in W.P.(C) No.7530 of 2019 whereby the High Courtof Delhi has permitted the respondents No. 1 and 2 herein to prosecutethe appeal before the Debts Recovery Appellate Tribunal (‘DRAT’ forshort) without pre-deposit of a portion of the debt determined to be due,as provided under Section 21 of the Recovery of Debts and BankruptcyAct, 1993 (‘RDBA Act’ for short). The appellant/Bank claiming to beaggrieved by the said order is before this Court in the instant appeal.

3. This Court while taking note of the matter at the first instance,had through the order dated 22.11.2019 directed the respondents No.1and 2 to deposit an amount of Rs.20 Crores before the Registry of thisCourt within a period of 8 weeks. In the said order it was indicated thatthe further proceedings in the appeal before the DRAT shall remainstayed till the next date of hearing or till the date of deposit of the saidamount by the respondents No.1 and 2, whichever is earlier. The depositas directed by this Court has not been made by the respondents No.1and 2. The appellant/Bank, therefore, alleging that there is disobedienceof the order passed by this Court has filed the accompanying ContemptPetition seeking action against respondents 1 and 2. In that background,since both these matters pertain to the same issue, they are taken uptogether, considered and disposed of by this common order.

4. The brief facts leading to the present proceedings is that therespondent No.3, namely, Hindon River Mills Ltd. had availed financialassistance from the respondent No.6-IFCI Ltd. The respondents No.1and 2 had offered their personal guarantee in respect of the said financialassistance. The respondents No.1 to 3 had defaulted in re-payment ofthe dues and the account having been classified as non-performing assetwas thereafter auctioned by respondent No.6-IFCI Ltd. wherein theappellant herein was the successful bidder and accordingly, the unpaiddebt and non-performing asset was assigned in their favour. Theassignment as made was assailed by the respondents No. 1 to 3 beforethe High Court in WP(C) No.14999 of 2006 which came to be dismissed A

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Aand the SLP(C) No. 35004 of 2011 filed was taken note by this Courtand in the said proceedings the settlement which was entered intobetween the parties was recorded and disposed of. As per the settlement,the respondents No. 1 to 3 had agreed to repay the sum of Rs.145Crores with interest at 15% per annum subject to the same being repaidon or before 31.07.2012. The respondents No. 1 to 3 are stated to haveBnot adhered to the terms of settlement and the re-payment was notmade. The appellant Bank, therefore, instituted recovery proceedingsby filing an application before the Debts Recovery Tribunal (‘DRT’ forshort), New Delhi in O.A. No.281 of 2015. In the said proceedings theappellant Bank claimed that the respondents No. 1 to 3 would be liableCto pay the entire outstanding since the benefit of the settlement whereinthe outstanding amount was frozen had not been availed within the timeframe. Accordingly, the sum of Rs. 572,18,77,112/- (Rupees Five HundredSeventy-Two Crores Eighteen Lakhs Seventy-Seven Thousand and OneHundred Twelve), which was due as on 31.12.2014 along with interestand other charges was claimed before the DRT.D

5. When this was the position, during the pendency of O.A.No.281of 2015 before the DRT the respondent No.7/National HighwaysAuthority of India (‘NHAI’ for short), acquired a portion of the mortgagedproperty belonging to respondent No.3 and deposited the compensationamount of Rs.62,31,87,312/- (Rupees Sixty-Two Crores Thirty-OneELakhs Eighty-Seven Thousand and Three Hundred Twelve), before theDRT. The compensation was thereafter enhanced by the DistrictMagistrate (Arbitrator) Ghaziabad and a further sum of (Rupees Seventy-Two Crores Ninety-Six Lakhs Twelve Thousand andEight-Hundred Twenty-Seven) was deposited. Thus, in all a sum ofFRs.152,81,07,159/-(Rupees One Hundred Fifty-Two Crores Eighty-OneLakhs Seven Thousand and One Hundred Fifty-Nine) was thecompensation amount which was deposited on behalf of respondent No.3relating to the mortgaged property, which was credited to the account ofrespondent No.3. With these developments in the background, the DRT

had proceeded to consider the claim application and ultimately orderedGissue of recovery certificate through the order dated 15.03.2018. Throughthe said order, as against the claim, the DRT had limited the decretalamount to Rs.145 Crores with future interest at 9% per annum till therealisation, on reducing balance. It was further ordered therein that theamount would be payable after taking into consideration the amount ofHRs.152,81,07,159/-(Rupees One Hundred Fifty-Two Crores Eighty-One Lakhs Seven Thousand and One Hundred Fifty-Nine) paid during thependency of the proceedings.

6. The appellant/Bank as well as respondents No. 1 to 3 claimingto be aggrieved by the order dated 15.03.2018 passed by DRT havepreferred appeals before the DRAT. This Court at this juncture is notrequired to consider the merits of the rival contentions relating to theloan transaction and the quantum of recovery thereof etc., which is thematter arising in the appeal before DRAT. The present proceeding islimited only with regard to the issue pertaining to the pre-depositcontemplated in law insofar as the appeal filed by the respondents No.1and 2 herein, before the DRAT. In that regard, the respondents No.1and 2 herein, in their Appeal No.311 of 2018 before the DRAT had alsofiled an application in IA No.511 of 2018 seeking waiver of pre-depositamounting to fifty per cent of the debt determined by the DRT. TheDRAT having noticed the contentions on the said aspect and also takinginto consideration that the amount of Rs.152,81,07,159/-(Rupees OneHundred Fifty-Two Crores Eighty-One Lakhs Seven Thousand and OneHundred Fifty-Nine) was received by the appellant Bank, had in thatcontext noted that the balance of the debt due works out toRs.68,18,92,841/- (Rupees Sixty-Eight Crores Eighteen Lakhs Ninety-Two Thousand and Eight Hundred Forty-One). Hence, DRAT throughthe order dated 27.02.2019 directed that fifty per cent of the said amountis to be deposited. Review filed against the same was dismissed on09.04.2019.

7. The respondents No.1 and 2 claiming to be aggrieved by theorders dated 27.02.2019 and 09.04.2019 approached the High Court ofDelhi in WP(C) No.7530 of 2019. The High Court having adverted tothe rival contentions and being swayed by the fact that the appellant/Bank has recovered the sum of Rs.152,81,07,159/-(Rupees One HundredFifty-Two Crores Eighty-One Lakhs Seven Thousand and One HundredFifty-Nine), arrived at the conclusion that the respondents No.1 and 2are to be permitted to prosecute the appeal without pre-deposit anddirected accordingly. It is in that view, the appellant/Bank claiming to beaggrieved by such order dated 16.07.2019 passed by the High Court isbefore this Court in the instant appeal.

8. Heard Mr. V.Giri, learned Senior Advocate for the appellant,Mr. Mukul Rohtagi and Mr. Ritin Rai, learned Senior Advocates for therespondents and perused the appeal papers.

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A9. As seen, though the sequence which led to the proceedingsbefore the DRT and DRAT is taken note and referred in some detail, theshort issue for consideration is with regard to the correctness or otherwiseof the order passed by the DRAT and the High Court of Delhi in thematter relating to pre-deposit of the debt due, in an appeal before theDRAT. In order to address the said issue, it would be appropriate to takeBnote of Section 21 of the Recovery of Debts and Bankruptcy Act, 1993which provides for deposit of the amount of debt due on filing the appeal.Section 21 of the RDBA reads as hereunder: - A

“Deposit of amount of debt due, on filing appeal – Where anappeal is preferred by any person from whom the amount of debtCis due to a bank or a financial institution or a consortium of banksor financial institutions, such appeal shall not be entertained bythe Appellate Tribunal unless such person has deposited with theAppellate Tribunal [fifty per cent.] of the amount of debt so duefrom him as determined by the Tribunal under section 19:

DProvided that the Appellate Tribunal may,for reasons to berecorded in writing, [reduce the amount to be deposited by suchamount which shall not be less than twenty-five per cent. of theamount of such debt so due] to be deposited under this section.”

(emphasis supplied)

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10. A perusal of the provision which employs the phrase “appealshall not be entertained” indicates that it injuncts the Appellate Tribunalfrom entertaining an appeal by a person from whom the amount of debtis due to the Bank, unless such person has deposited with the AppellateTribunal, fifty percent of the amount of debt so due from him asFdetermined by the Tribunal under Section 19 of the Act. The proviso tothe said Section, however, grants the discretion to the Appellate Tribunalto reduce the amount to be deposited, for reasons to be recorded inwriting, but such reduction shall not be less than twenty-five per cent ofthe amount of such debt which is due. Hence the pendulum of discretionGto waive pre-deposit is allowed to swing between fifty per cent andtwenty-five per cent of the debt due and not below twenty-five per cent,much less not towards total waiver. It is in that background, keeping inperspective the said provision, the DRAT has in the instant case ordereddeposit of fifty per cent of the amount. The respondents No.1 and 2while seeking waiver of the deposit have essentially projected the caseH

to indicate that the recovery certificate ordered by the DRT is for thesum of Rs.145 Crores with interest at 9% per annum and the amountrealised by the Bank from the compensation amount payable torespondent No.3 is itself a sum of Rs.152,81,07,159/-(Rupees OneHundred Fifty Two Crores Eighty One Lakhs Seven Thousand and OneHundred Fifty Nine) and as such there is no debt due.

11. In that regard the High Court has concluded as hereunder: - “9. Having heard learned senior counsels for the parties, we areof the considered view that learned DRAT has not viewed theaspect of pre-deposit correctly in the present case. The amountof Rs.152,81,07,159/- was received by the respondent-bank duringthe pendency of the Original Application. The respondent-bankdid not amend its Original Application to claim that it has adjustedthe said amount, and did not limit its claim for the balance amount.Consequently, while adjudicating the Original Application, the DRThas proceeded on the basis that the respondent-bank is bound bythe settlement amount of Rs.145 crores, and is entitled to futureinterest thereon at the rate of 9% per annum from 5[th] July, 2012onwards till realization on the reducing balance, after taking intoaccount the amount of Rs.152,81,07,159/- received during thependency of the Original Application.

10. Aforesaid being the position, merely because the amount ofRs.152,81,07,159/- was received by the respondent-bank beforepassing of the final judgment, and not thereafter, would make nodifference while considering the aspect of pre-deposit that thedebtor, or the guarantor would have to deposit in terms of Section21 of the aforesaid Act.”

12. The extracted portion indicates that the High Court hasproceeded at a tangent while adverting to the aspect of recovery madetowards the loan amount from the land acquisition compensation payableto respondent No.3. The conclusion appears to be that the receipt of thecompensation amount even though was before passing of the decree,would wipe out the decretal amount of Rs.145 Crores with interest at9% per annum, though it has not been expressly stated so. Per contra,the DRAT by its order dated 27.02.2019 while directing the pre-depositof fifty per cent of the amount had taken note of the fact that if thedecretal amount as ordered by the DRT is taken into consideration and A

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Athe amount received by the Bank towards the compensation amount iscredited, the balance of the decretal amount payable by respondentsNo.1 to 3 would work out to Rs.68,18,92,841/- (Rupees Sixty Eight CroresEighteen Lakhs Ninety Two Thousand and Eight Hundred Forty One).It is in that view, the DRAT has ordered pre-deposit of fifty per cent ofthe said amount which still remains to be a debt due. On that aspect,Bthough the ultimate correctness of the actual amount due is a matter forcalculation to be made in the execution proceedings, for the present, forthe purpose of pre-deposit if the decree/recovery certificate issued bythe DRT is taken into consideration the position is clear that even if theamount of compensation is appropriated, either before or after the decree,Cthere would still be outstanding amount payable which would be thesubject matter of the appeal in DRAT, apart from the fact that theappellant Bank in their appeal are claiming the entire amount which hasfallen due since the terms of settlement was not adhered to.

13. Thus, when prima facie it was taken note by the DRAT thatDfurther amount was due and the pre-deposit was ordered, without findingfault with such conclusion the High Court was not justified in settingaside the orders passed by the DRAT. As noted from the extractedportion of the order passed by the High Court, all that the High Courthas concluded is that the benefit of the receipt of Rs.152,81,07,159/-(Rupees One Hundred Fifty Two Crores Eighty One Lakhs SevenEThousand and One Hundred Fifty Nine) as against the decretal amountcannot be denied though it was received before passing of the finaljudgment. Such conclusion in any event could not have tilted the balancein favour of the respondents No.1 and 2 to waive the entire pre deposit,unless the High Court had rendered a categorical finding that the entireFdecretal amount stands satisfied from such receipt and there was nodebt due which in any event was beyond the scope of consideration in apetition of the present nature. On the other hand, as stated, the DRAThaving taken note of the decretal amount, the receipt of the amountcredited as compensation and, having further noted the debt is still due,has directed the pre-deposit limited to that extent.G

14. Therefore, in the facts and circumstances arising herein, whenfurther amount is due and payable in discharge of the decree/recoverycertificate issued by the DRT in favour of the appellant/Bank, the HighCourt does not have the power to waive the pre-deposit in its entirety,nor can it exercise discretion which is against the mandatory requirementH

of the statutory provision as contained in Section 21, which is extractedabove. In all cases fifty per cent of the decretal amount i.e. the debt dueis to be deposited before the DRAT as a mandatory requirement, but inappropriate cases for reasons to be recorded the deposit of at leasttwenty-five per cent of the debt due would be permissible, but not entirewaiver. Therefore, any waiver of pre-deposit to the entire extent wouldbe against the statutory provisions and, therefore, not sustainable in law.The order of the High Court is, therefore, liable to be set aside.

15. It is noticed that this Court while considering an analogousprovision contained in Section 18 of the Securitisation and Reconstructionof Financial Assets and Enforcement of Security Interest Act, 2002(‘SARFAESI’ for short) relating to pre-deposit in order to avail the remedyof appeal has expressed a similar opinion in the case of NarayanChandra Ghosh vs. UCO Bank and Others (2011) 4 SCC 548, whichreads as hereunder: -

7. Section 18(1)of the Act confers a statutory right on a personaggrieved by any order made by the Debts Recovery Tribunalunder Section 17 of the Act to prefer an appeal to the AppellateTribunal. However, the right conferred under Section 18(1) issubject to the condition laid down in the second proviso thereto.The second proviso postulates that no appeal shall be entertainedunless the borrower has deposited with the Appellate Tribunalfifty per cent of the amount of debt due from him, as claimed bythe secured creditors or determined by the Debts RecoveryTribunal, whichever is less. However, under the third proviso tothe sub-section, the Appellate Tribunal has the power to reducethe amount, for the reasons to be recorded in writing, to not less-than twentyfive per cent of the debt, referred to in the secondproviso. Thus, there is an absolute bar to entertainment of anappeal under Section 18 of the Act unless the condition precedent,as stipulated, is fulfilled. Unless the borrower makes, with the-Appellate Tribunal, a predeposit of fifty per cent of the debt duefrom him or determined, an appeal under the said provision cannotbe entertained by the Appellate Tribunal. The language of thesaid proviso is clear and admits of no ambiguity.

8. It is well-settled that when a Statute confers a right of appeal,while granting the right, the Legislature can impose conditions forthe exercise of such right, so long as the conditions are not so A

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SUPREME COURT REPORTS

onerous as to amount to unreasonable restrictions, rendering theright almost illusory. Bearing in mind the object of the Act, theconditions hedged in the said proviso cannot be said to be onerous.Thus, we hold that the requirement of pre-deposit under sub-section(1) of Section 18 of the Act is mandatory and there is no reasonwhatsoever for not giving full effect to the provisions containedin Section 18 of the Act. In that view of the matter, no court,much less the Appellate Tribunal, a creature of the Act itself, canrefuse to give full effect to the provisions of the Statute. We haveno hesitation in holding that deposit under the second provisoto Section 18(1) of the Act being a condition precedent forpreferring an appeal under the said Section, the Appellate Tribunalhad erred in law in entertaining the appeal without directing theappellant to comply with the said mandatory requirement.

9. The argument of learned counsel for the appellant that as theamount of debt due had not been determined by the DebtsRecovery Tribunal, appeal could be entertained by the AppellateTribunal without insisting on pre-deposit, is equally fallacious. Underthe second proviso to sub-section (1) of Section 18of the Act theamount of fifty per cent, which is required to be deposited by theborrower, is computed either with reference to the debt due fromhim as claimed by the secured creditors or as determined by the

Debts Recovery Tribunal, whichever is less. Obviously, wherethe amount of debt is yet to be determined by the Debts RecoveryTribunal, the borrower, while preferring appeal, would be liable todeposit fifty per cent of the debt due from him as claimed by thesecured creditors. Therefore, the condition of pre-deposit beingmandatory, a complete waiver of deposit by the appellant with theAppellate Tribunal, was beyond the provisions of the Act, as isevident from the second and third provisos to the said Section. Atbest, the Appellate Tribunal could have, after recording the reasons,reduced the amount of deposit of fifty per cent to an amount notless than twenty-five per cent of the debt referred to in the secondproviso. We are convinced that the order of the Appellate Tribunal,entertaining appellant’s appeal without insisting on pre-deposit wasclearly unsustainable and, therefore, the decision of the High Courtin setting aside the same cannot be flawed.”

(emphasis supplied)

16. Having arrived at the above conclusion the issue is also withregard to the extent to which pre-deposit is to be ordered in the instantcase. Though the learned Senior Advocates on either side have indicateddifferent figures as the actual debt due as on today, we do not propose toenter into that aspect of the matter since the actual amount due is amatter which would be taken note by the DRAT while considering theappeal on merits and at the point of recovery if any, in the executionproceedings. However, for the present we would take note of the amountas indicated in the order dated 27.02.2019 passed by the DRAT. Hence,for the purpose of determining the pre-deposit, the decretal amount dueis taken at Rs.68,18,92,841/- (Rupees Sixty-Eight Crores Eighteen LakhsNinety-Two Thousand and Eight Hundred Forty-One). Mr. MukulRohtagi, learned Senior Advocate would contend that a portion of propertybelonging to respondent No.3 has been acquired and the remainingproperty is still under mortgage and as such pre-deposit would beburdensome to the respondents No.1 and 2, more particularly when theentire compensation amount is deposited and major portion of the debtdue is discharged.

17. As already noted, a total waiver would be against the statutoryprovisions. However, in the instant case, taking note that though theissue relating to the actual amount due is to be considered by the DRAT,keeping in view the fact that the DRT has taken into consideration theearlier settlement and has accordingly decreed the claim to that extentand towards such decree since payment of a major portion is made,though by appropriation of the compensation amount and admittedly sincethe remaining properties belonging to respondent No.3 is available byway of mortgage and the respondents No.1 and 2 are the personalguarantors, we deem it appropriate that in the peculiar facts andcircumstances of this case to permit the pre-deposit of twenty-five percent of the amount as taken note by the DRAT i.e. twenty-five per centof Rs.68,18,92,841/-(Rupees Sixty Eight Crores Eighteen Lakhs NinetyTwo Thousands and Eight Hundred Forty One). To the said extent, theorder dated 27.02.2019 passed by the DRAT on IA No.511 of 2018 isliable to be modified.

18. It is clarified that the consideration made herein and debt duequantified is limited to the aspect relating to pre-deposit. All othercontentions including as to the actual amount of debt due is left open tobe urged in the pending appeals.

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A19. In view of the above conclusion the interim direction to depositthe amount of Rs.20 Crores as ordered on 22.11.2019 would lose itsrelevance at this point of time. Though as per the said direction dated22.11.2019 the amount was to be deposited within the time frame andthere is non-compliance, in view of the subsequent development of thefinal order being passed in the appeal, we see no reason to proceedBfurther in the Contempt Petition initiated by the appellant, though at anearlier point of time notice was ordered to the respondent.

20. In the result;

20. In the result;

(i) The order dated 16.07.2019 passed by the High Court of DelhiCin WP(C) No.7530 of 2019 is set aside;

(ii) The order dated 27.02.2019 passed by the DRAT, Delhi onIA No.511 of 2018 in Appeal No.311 of 2018 is modified. Therespondents No. 1 and 2 are permitted to deposit twenty-five percent of Rs.68,18,92,841/-(Rupees Sixty-Eight Crores EighteenDLakhs Ninety-Two Thousand and Eight Hundred Forty-One) andprosecute the Appeal No.311 of 2018, subject to such depositbeing made within 8 weeks, failing which the appeal shall notsubsist in the eye of law;

(iii) The appeal is accordingly allowed in part. No costs; E(iv) The Contempt Petition No.569 of 2020 is closed asunnecessary;

(iv) Pending application, if any, shall stand disposed of.

FDivya Pandey

Appeal partly allowed.

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