KOTAK MAHINDRA BANK PVT. LIMITED versus AMBUJ A. KASLIWAL & ORS.

Citation: [2021] 3 S.C.R. 1001 · Decided: 16-02-2021 · Supreme Court of India · Bench: S.A. BOBDE · Disposal: Case Partly allowed

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Judgment (excerpt)

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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 AND
V. RAMASUBRAMANIAN, JJ.]
Recovery of Debts and Bankruptcy Act, 1993 – s.21 – Appeal
before DRAT – Pre-deposit of the debt due – Waiver – Sustainability
of – Held: In all cases fifty per cent of the decretal amount i.e. the
debt due is to be deposited before DRAT as a mandatory requirement,
but in appropriate cases for reasons to be recorded the deposit of
at least twenty-five per cent of the debt due would be permissible,
but not entire waiver – When further amount is due and payable in
discharge of decree/recovery certificate issued by DRT, the High
Court does not have the power to waive the pre-deposit in its entirety,
nor can it exercise discretion against the mandatory requirement of
the statutory provision –Any waiver of pre-deposit to the entire extent
would be against the statutory provisions – High Court not justified
in setting aside the order passed by DRAT – Order passed by High
Court 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 the
DRAT is permitted – Order passed by the DRAT modified to this
extent.
Words & Phrases – s.21 – “appeal shall not be entertained”
– Held: Such  phrase injuncts the Appellate Tribunal from
entertaining an appeal by a person from whom the amount of debt
is due to the Bank, unless such person has deposited with the
Tribunal, fifty percent of the amount of debt so due – Recovery of
Debts 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 Debts
and Bankruptcy Act, 1993 (RDBA) which employs the phrase
“appeal shall not be entertained” indicates that it injuncts the
Appellate Tribunal from entertaining an appeal by a person from
[2021] 3 S.C.R. 1001
1001
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SUPREME COURT REPORTS
[2021] 3 S.C.R.
whom the amount of debt is due to the Bank, unless such person
has deposited with the Appellate Tribunal, fifty percent of the
amount of debt so due from him as determined by the Tribunal
under Section 19 of the Act. The proviso to the said Section,
however, grants the discretion to the Appellate Tribunal to reduce
the amount to be deposited, for reasons to be recorded in writing,
but such reduction shall not be less than twenty-five per cent of
the amount of such debt which is due. Hence the pendulum of
discretion to waive pre-deposit is allowed to swing between fifty
per cent and twenty-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 in perspective the said provision, the
DRAT has in the instant case ordered deposit of fifty per cent of
the amount. The respondents No.1 and 2 while seeking waiver
of the deposit have essentially projected the case to indicate that
the recovery certificate ordered by the DRT is for the sum of
Rs.145 Crores with interest at 9% per annum and the amount
realised by the Bank from the compensation amount payable to
respondent No.3 is itself a sum of Rs.152,81,07,159/- and as such
there is no debt due. [Para 10][1008-E-H; 1009-A-B]
1.2 The High Court has proceeded at a tangent while
adverting to the aspect of recovery made towards the loan amount
from the land acquisition compensation payable to respondent
No.3. The conclusion appears to be that the receipt of the
compensation amount even though was before passing of the
decree, would wipe out the decretal amount of Rs.145 Crores
with interest at 9% 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--deposit of fifty per cent of the amount
had taken note of the fact that if the decretal amount as ordered
by  the  DRT  is taken into consideration and the amount received
by the Bank towards the compensation amount is credited, the
balance of the decretal amount payable by respondents No.1 to 3
would work out to Rs.68,18,92,841/-. It is in that view, the DRAT
has ordered pre-deposit of fifty per cent of the said amount which
still remains to be a debt due. On that aspect, though the ultimate
correctness of the actual amount due is a matter for calculation
to be made in the execution proceedings, for the present, for the
purpose of pre-deposit if the decree/recovery certificate issued
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by the DRT is t

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