NARAYAN CHANDRA GHOSH versus UCO BANK & ORS.

Citation: [2011] 3 S.C.R. 1024 · Decided: 18-03-2011 · Supreme Court of India · Bench: D.K. JAIN, H.L. DATTU · Disposal: Disposed off

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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(2011] 3 S.C.R. 1024 
NARAYAN CHANDRA GHOSH 
v. 
UCO BANK & ORS. 
(Civil Appeal No. 2681 of 2011) 
MARCH 18, 2011 
[D.K. JAIN AND H.L. DATIU, JJ.] 
Securitization and Reconstruction of Financial Assets and 
Enforcement of Security Interest Act, 2002: 
s.18 - Requirement of pre-deposit of amount in terms of 
s. 18 - Whether mandatory - Held: Right to file appeal ui~. 18 
is conferred subject to condition laid down in the second 
proviso thereto - The second proviso postulates thpt no 
appeal shall be entertained unless the borrower has 
D deposited with the Appellate Tribunal 50% of the amount of 
debt due from him, as claimed by the secured creditors or as 
determined by the Debts Recovery Tribunal, whichever is less 
- H<?wever, under the third proviso to the sub-section, the 
Appellate Tribunal has the power to reduce the amount, for 
E the reasons to be recorded in writing, to not less than 25% of 
the debt. referred to in the second proviso - Thus, there is 
an absolute bar to entertainment of an appeal u/s. 18 of the 
Act unless the condition precedent, as stipulated, is fulfilled 
- In the instant case, the order of the Appellate Tribunal, 
F entertaining borrower's appeal without insisting on pre-deposit 
was clearly unsustainable - In the notice issued to the 
borrower u/s. 13(2) of the Act, the debts due was Rs. 52, 42, 47 41 
- - Since the Debts Recovery Tribunal had not determined 
the debt due, the borrower is directed to deposit with the 
G Appellate Tribunal an amount of Rs. 15 lakhs within a period 
of four weeks - Thereafter, appeal to be entertained and 
decided on merits. 
s. 18, second proviso - Right to file appeal subject to 
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1024 
NARAYAN CHANDRA GHOSH v. UCO BANK & ORS. 1025 
tonditions -. Hekl: When a statute confers a right of appeal, 
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while granting the right,.· the legislature. can impose conditions 
for.the exercise of such right, so long as the conditions are 
not so onerous as to amount to unreasonable restrictions, · 
rendering the right almost illusory - Bearing in mind the object · 
of the Act, . the conditions hedged in the second proviso B 
cannot be said to be onerous - Interpretation of statutes. 
T~c appellant-borrower filed an appeal under Section 
17 of the Seeuritization and Reconstruction qf Financial 
Assets and Enforcement of Security Interest A~t, 2002. · C 
The Debt Recovery Tribunal did not entertain the appeal 
on a technical ground. The Debt Recovery Appellate 
Tribunal while allowing the application filed by the 
appellant under Section 18 of the Act exempted him from 
making aily deposit iSJ terms of second proviso to Section 
18 of the Act. 
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· The question which arose for consideration in the 
instant appeal was whether the Appellate Tribunal has the 
jurisdiction to exempt the person, preferring an appeal 
under Section 18 of the Act from making any pre-deposit 
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in terms of the said provision. 
Disposing of the appeal, the Court 
HELD: Section 18(1) of the Securitization and 
Reconstruction of Financial Assets and Enforcement of F 
Security Interest Act, 2002 confers a statutory right on a 
person aggrieved by any order made by the Debts 
--Recovery Tribunal under Section 17 of the Act to prefer 
an appeal to the Appellate Tribunal. However, the right 
conferred under Section 18(1) is subject to the condition· G 
laid down in the second proviso thereto, The second 
proviso postulates that no appeal shall be entertained. 
unless the borrower has deposited with the Appellate 
Tribunal fifty per cent of the amount of debt due from him, 
as claimed by the secured creditors or determined by the 
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1026 
SUPREME COURT REPORTS 
[2011] 3 S.C.R. 
A Debts Recovery Tribunal, whichever is less. However, 
under the third proviso to the sub-section, the Appellate 
Tribunal has the power to reduce the amount, for the 
reasons to be recorded in writing, to not less than 
twenty-five per cent of the debt, referred to in the second 
B proviso. Thus, there is an absolute bar to entertainment 
of an appeal under Section 18 of the Act unless the 
condition precedent, as stipulated, is fulfilled. Unless the 
borrower makes, with the Appellate Tribunal, a pre-
deposit of fifty per cent of the debt due from him or 
c determined, an appeal under the said provision cannot 
be entertained by the Appellate Tribunal. The language 
of the said proviso is clear and admits of no ambiguity. It 
is well-settled that when a statute confers a right of 
app

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