2019 (7) TMI 1974 - HC - Indian Laws

Jurisdiction - power of DRAT to pass an order of complete waiver - whether it is mandatory either to ask for deposit 50% of the debts due or it may be reduced to 25% after recording reasons? - whether the appeal having been filed before the commencement of the amendment and the order has been passed after the amendment has come then in such circumstances whether the appellate authority was obliged to look into the amended provision of law? HELD THAT - Whenever amendment has come in Section 21 during the pendency of the application which was decided after the amendment then the amended provision of the Act would apply because unamended provision would go in oblivion and would not be applicable. In view thereof, there was hardly any power vested with the DRAT to have passed an order ignoring the amended provisions for the purpose of giving a complete waiver to the petitioner in the first petition which has been challenged by the petitioner in the second petition. Once it is held that the DRAT had no jurisdiction at all to have waived the amount of pre-deposit of 50% or at the most even 25%, therefore, the order dated 26.12.2016 to entertain the appeal, filed by the petitioner in the first petition is bad in law. Even otherwise, the DRAT had no jurisdiction to observe that since the auction purchaser has already deposited the aforesaid entire auction money, therefore, in that circumstances, the guarantor was not liable to pay the pre-deposit amount. This finding is patently erroneous and illegal and therefore, the second petition is allowed, order dated 26.12.2016 is hereby set aside and the first petition is hereby dismissed as having been rendered infructuous as the order dated 13.04.2017 has become meaningless. Petition dismissed.

Summary

Issues:
1. Jurisdiction of the Debts Recovery Appellate Tribunal (DRAT) to grant complete waiver of pre-deposit for appeal.
2. Obligation of appellate authority to consider amended provisions of law when order passed after the amendment.

Analysis:
1. The judgment deals with two connected writ petitions involving a guarantor and an auction purchaser regarding a disputed property in Chandigarh. The guarantor challenged an order directing him to deposit the entire sale consideration, while the auction purchaser raised concerns about the DRAT's jurisdiction to grant complete waiver of pre-deposit post-amendment. The primary issue was whether the DRAT had the authority to waive pre-deposit for appeal under Section 21 of the Act.

2. The unamended provision of Section 21 mandated a 75% deposit for appeal, which was later amended to 50% with a provision for further reduction to 25%. The DRAT entertained an appeal without the required deposit, leading to a legal challenge. The court held that post-amendment, the amended provision should apply, rendering the waiver of pre-deposit by DRAT invalid. The court emphasized that the DRAT had no jurisdiction to ignore the amended provisions and grant complete waiver.

3. The judgment highlighted that when an amendment occurs during the pendency of an application, the amended provision should prevail over the unamended one. As the order was passed post-amendment, the court concluded that the DRAT erred in granting complete waiver. The court deemed the waiver order unlawful and set it aside, dismissing the first petition as the subsequent order had become meaningless. The judgment clarified the obligations of appellate authorities to adhere to amended laws and emphasized the importance of legal provisions in determining jurisdiction and decisions.