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TMI Blog2015 (3) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the requirement of the second Proviso to Section 18(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, in short), was dismissed. 2. The brief facts are that certain credit facilities were granted to the petitioner for setting up of a plant to manufacture aluminium products by the Oriental Bank of Commerce (Bank in short) in July, 1999 and the said facility was enhanced and renewed in the month of June, 2000. On September 30, 2001, the account of the petitioner was declared Non Performing Asset (NPA in short) by the respondent No. 2-bank. The bank filed an Original Application i.e. OA No. 145/02 before the Debt Recovery Tribunal (DRT), which issued show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner had sought waiver/reduction of amount of pre-deposit required under the second proviso to Section 18(1) of the SARFAESI Act for entertaining the appeal, the Appellate Tribunal, on the statement made by the learned counsel for the petitioner, has reduced the pre-deposit from 50% to 25% of Rs. 5,56,60,345/- to be deposited by way of FDRs in the name of the Registrar of the Appellate Tribunal. The statement made by the counsel for the petitioner reads as under: "Mr. Dutta points out that the appellant/applicants had filed four separate applications (S.As) under section 17 of SARFAESI Act against the measures taken by the respondent bank qua the different loan accounts and the learned tribunal below by taking all those four S.As t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent No. 1 that the SA No. 527/12 filed by the petitioner was premature. The said application of the respondent No. 1 under Order 7 Rule 11 CPC was allowed and thereby the appeal No. 527/2012 was dismissed as no action under Section 13(4) of the SARFAESI Act has been taken by the respondent No. 1. 5. It is pursuant thereto, the petitioner herein has filed an application under Section 18(2) of the SARFAESI Act read with Section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act and on the principles akin to Order 47 CPC read with Section 151 CPC before the Appellate Tribunal inter alia praying a direction to the Registrar of the Appellate Tribunal to refund 25% of the amount mentioned in the notice under Section 13(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and associate companies, the number being SA Nos. 525, 526, 527 and 528 of 2012. All accounts, with respect to the said companies, had been declared as NPA. She would state that in pursuance to the statement made by the learned counsel for the petitioner before the Appellate Tribunal that the order of deposit was reduced from 50% to 25%. In other words, it was a composite order with respect to all four accounts which claim was for Rs. 5,56,60,345/-. It is also her submission that even though the SA No. 527/12 filed by the petitioner was held to be premature, insofar as two other accounts are concerned (i.e. Kuaan International Ltd. and Kumar Enterprises), it was held that the accounts have been classified NPA as per RBI Guidelines and ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar Enterprises 31-03-2002 57,51,365.00 TOTAL 5,76,60,435.00 It is also noted, but, for a concession, the Appellate Tribunal could have maintained as pre-deposit 50% of the claimed amount. Even if the submission of the learned counsel for the petitioner is accepted to exclude the account with regard to the petitioner company herein, we note, even against the three accounts, the total liability is of Rs. 3,48,44073/- and 50% of the said amount would still be Rs. 1,74,22036.50/- which is also much more than the amount deposited by the petitioner against the four accounts in terms of order of the Appellate Tribunal. Even assuming, that, out of the three accounts, one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Mardia Chemicals Ltd.'s case (supra) is concerned, the Supreme Court has held, that the amount of deposit of 75% of the demand, at the initial proceeding itself sounds unreasonable and oppressive, more particularly when the secured assets/the management thereof along with the right to transfer such interest has been taken over by the secured creditor or in some cases property is sold. The Court has held that the stipulation that the borrower has to deposit 75% of the amount claimed by the secured creditor before his appeal can be entertained in Section 17(2) of the Act (pre-amended) was unreasonable, arbitrary and violative of Article 14 of the Constitution. The said Sub-Section has been replaced by way of an amendment, empowering the D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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