Dinesh Mangalassery and Rajasree Dinesh v. The Chief Manager and Authorized Officer, Syndicate Bank, Regional Office, Thiruvananthapuram-695 014; and The Syndicate Bank, Kottarakkara Branch, represented by its Chief Manager, Kottarakkara, Kollam District, Pin-691 506

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS FRIDAY, THE 17TH DAY OF JANUARY 2020 / 27TH POUSHA, 1941** # **OP (DRT).No.37 OF 2020** **AGAINST THE ORDER IN AIR(SA).NO. 156/2019 OF DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI** ## **PETITIONERS/PETITIONERS:** **1 DINESH MANGALASSERY, AGED 47, S/O. GOPALA PILLAI, MANGALASSERY MOTOR COMPANY, CHENGAMANADU P.O., KOTTARAKKARA, KOLLAM DISTRICT.** **2 RAJASREE DINESH, W/O. DINESH MANGALASSERRY, MANGALASSERY MOTOR COMPANY, CHENGAMANADU P.O., KOTTARAKKARA, KOLLAM DISTRICT.** **BY ADVS.SRI.O.V.MANIPRASAD,SRI.JOSE ANTONY SRI.S.SHIV SHANKAR** ## **RESPONDENTS/RESPONDENTS:** - **1 THE CHIEF MANAGER AND AUTHORIZED OFFICER, SYNDICATE BANK, REGIONAL OFFICE, THIRUVANANTHAPURAM-695 014.** **2 THE SYNDICATE BANK, KOTTARAKKARA BRANCH, REPRESENTED BY ITS CHIEF MANAGER, KOTTARAKKARA, KOLLAM DISTRICT, PIN-691 506.** **BY ADV. SRI.R.S.KALKURA** **THIS ORIGINAL PETITION (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 17.01.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## ALEXANDER THOMAS, J. ------------------------------------O.P.(DRT) No. 37 of 2020 ------------------------------------Dated this the 17[th] day of January, 2020 J U D G M E N T Heard Sri.O.V.Maniprasad, learned counsel appearing for the petitioners (borrowers) and Sri.R.S.Kalkura, learned counsel appearing for the respondents (Syndicate Bank). 2. The matter in issue is on a short factual compass, and therefore it is not necessary to delve into the detailed factual aspects in this case. It is suffice to say that the petitioners have earlier filed a statutory appeal under Sec.18(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“ the SARFAESI Act ” for short) to impugn the order dated 3.9.2019 rendered by the Debt Recovery Tribunal, Ernakulam, dismissing the securitization applications filed by the petitioners herein (borrowers) in the impugned SARFAESI proceedings. The petitioners have also filed an interlocutory application under the 3[rd] proviso to Sec.18(1) of the said Act seeking for waiver of the pre-deposit amount to the maximum O.P.(DRT) No. 37 of 2020 **==> picture [19 x 9] intentionally omitted <==** extent of 25% permissible as per the said proviso. After hearing both sides, the Debt Recovery Appellate Tribunal, Chennai, has passed Ext.P-4 order dated 13.8.2019 ordering that the petitioners are given the benefit of waiver to the maximum extent of 25% permissible as per the said proviso, on condition that the petitioners should deposit the reduced amount of Rupees 50 Lakhs within 4 weeks. The said time limit for making the reduced pre-deposit of amount after the waiver, pursuant to Ext.P-4 order dated 13.8.2019 was upto 10.9.2019. Since the petitioners were not in a position to raise the huge amount of Rupees 50 lakhs, they impugned the said condition imposed by the Debt Recovery Appellate Tribunal, Chennai, by filing an Original Petition (DRT) No.150/2019 under Article 227 of the Constitution of India, before this Court, which conveyed in Ext.P-7 judgment rendered by this Court on 5.9.2019, whereby this Court held that it is for the petitioners to approach the Debt Recovery Appellate Tribunal, Chennai, with the said request for extension of time limit for making the reduced pre-deposit amount. Immediately thereafter, O.P.(DRT) No. 37 of 2020 ..4.. the petitioners have submitted Ext.P-8 application dated 9.9.2019 before the Debt Recovery Appellate Tribunal, Chennai, seeking for extension of time limit. The said Ext.P-8 application along with the main appeal came up for consideration on 12.9.2019. It appears _in limine_ at the admission stage itself that the Debt Recovery Appellate Tribunal has dismissed the said plea for time extension on the ground that the petitioners have not produced the demand draft for Rupees 50 Lakhs, and that this shows that the petitioners does have the financial wherewithal to raise the amount even in the near future, and has dismissed the time extension application made as per Ext.P-8, and consequently the main appeal filed under Sec.18(1) of the SARFAESI Act by the petitioners have also dismissed by the Debt Recovery Appellate Tribunal, Chennai, on the ground of non payment of the said pre-deposit amount. 3. It is indisputable that immediately thereafter the petitioners have raised the requisite amount of Rupees 50 Lakhs and have taken Ext.P-10 demand draft dated 30.9.2019 from the ICIC Bank, Kottarakkara Branch, for an amount of O.P.(DRT) No. 37 of 2020 **==> picture [18 x 9] intentionally omitted <==** Rupees 50 Lakhs in favour of the Registrar, Debt Recovery Appellate Tribunal, Chennai. The petitioners had thereupon approached this Court by filing instant Original Petition (DRT) under Article 227 of the Constitution of India seeking for necessary interdiction and for orders for acceptance of the said pre-deposit amount of Rupees 50 Lakhs and for necessary interdiction for the remit and prosecution of the appeal before the Debt Recovery Appellate Tribunal. It appears that the Registry of this Court had noted a defect that the petition for abovesaid grievance raised by the petitioners is to be filed only under Article 226 of the Constitution of India and not under Article 227, and accordingly the case papers in relation to the said Article 227 petition was returned back to the petitioners as defective. Due to the said stand taken by the Registry, the petitioners have now filed the instant petition styled as a petition filed under both Articles 226 & 227 of the Constitution of India on 30.9.2019, with the following prayers: “ _i. To issue a writ of certiorari or any other appropriate writ or direction quashing Ext.P9 order dated 12.09.2019 in AIR(SA) No.156/2019 on the file of the Debt Recovery Appellate Tribunal, Chennai;_ O.P.(DRT) No. 37 of 2020 ..6.. - _ii. To issue a writ of mandamus, order or direction directing the Debt Recovery Appellate Tribunal, Chennai to set aside the dismissal of the Exhibit P1 Appeal No. AIR(SA) No.156/2019 and take back the same on files on the petitioners making the pre-deposit of Rs.50 lakhs by producing the original of Exhibit P10 Bank Demand Draft within with in such time that may be granted by this Hon'ble Court and to consider and dispose of the appeal in accordance with law, on merits;_ - _iii. To pass such orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.”_ 4. At the outset it is to be noted that the decision making process that is essentially challenged by the petitioners in this case is the abovesaid judicial decision making process of the Debt Recovery Appellate Tribunal, subjected to Article 227 of the Constitution of India, and not under Article 226 of the Constitution of India, going by a proper understanding of the dictum laid down by the Apex Court in the celebrated case in _**Radhey Shyam and Another v. Chhabi Nath and Others [(2015) 5 SCC 423]**_ . The said decision in _**Radhey Shyam** 's_ case supra, the Apex Court held that writs under Article 227 of the Constitution of India cannot be sought for as against the judicial decisions of a civil court and has thus overruled the earlier two judge bench decision of the Apex Court in _**Surya Dev Rai v. Ram Chander Rai [(2003) 6 SCC 675]**_ . Though the matter in issue in O.P.(DRT) No. 37 of 2020 ..7.. _**Radhey Shyam** 's_ case supra was in relation to maintainability or otherwise of Article 226 writs against the judicial decisions of the civil courts, a contextual understanding of the said dictum laid down by the Apex Court therein in its applicability to a tribunal in the nature of the Debt Recovery Appellate Tribunal would persuade this Court to hold that essentially jurisdiction is one relatable to Article 227 of the Constitution of India. Accordingly the Registry will re-register and re-number this petition as an Original Petition (DRT), viz, OP(DRT), filed under Article 227 of the Constitution of India. 5. Coming into the facts of this case it is to be noted that the time given by the Debt Recovery Appellate Tribunal for making the reduced pre-deposit after the grant of maximum permissible waiver limit, coming to Rupees 50 Lakhs was upto 10.9.2019. Pursuant to Ext.P-7 judgment rendered by this Court on 5.9.2019, the petitioners have immediately approached the Debt Recovery Appellate Tribunal, by filing Ext.P-8 application on 9.9.2019, and they have sought time extension by 2 months. Such plea for O.P.(DRT) No. 37 of 2020 ..8.. extension by 2 months could have been quite long. However, it is to be noted that Ext.P-8 application dated 9.9.2019 came up for admission before the Debt Recovery Appellate Tribunal on 12.9.2019. The Tribunal has rejected the plea as per Ext.P-9 order dated 12.9.2019 on the ground that the petitioners have failed to produce demand draft for Rupees 50 Lakhs. It is the admitted case of the petitioners that, as on that day they was not in a position to raise money and they wanted time extension. If that is the specific plea of the petitioners, that plea was to be addressed by the Tribunal. Rather the Tribunal has wrongly addressed the issues and has dismissed the said plea on the ground that the petitioners have not even cared to produce demand draft of Rupees 50 Lakhs, and therefore it is to be presumed that the petitioners does not have the financial wherewithal to raise the said amount within short time period. In a case like this, the Tribunal could have taken the stand that the extension of time sought for by 2 months was certainly on the larger side, and the Tribunal, for the purpose of ascertaining the bonafides of the petitioners, could have adjourned O.P.(DRT) No. 37 of 2020 **==> picture [19 x 9] intentionally omitted <==** the matter by 2 to 3 weeks, and then ask the petitioners to produce the demand draft. Such a course of action is not taken. The fact that the Tribunal has not taken such a course of action by itself may not be illegal or improper. But the heart of the matter is that, the Tribunal has straightaway dismissed the plea at the _in limine_ stage on the ground that the petitioners have not produced the demand draft. This approach is certainly legally wrong and not justifiable, as the Tribunal has not addressed the right question, as to whether the petitioners could be granted time extension atleast by a little while, and to ascertain, whether they could raise the amount, in the meanwhile. Merely because the petitioners have not produced demand draft on the first day of admission of application, cannot be the basis for making a reasonable conclusion that the petitioners have no financial wherewithal to raise the said amount. On the other hand, the subsequent conduct of the petitioners would clearly show that the petitioners have been successful enough to raise the requisite amount of Rupees 50 Lakhs and have secured Ext.P-10 demand O.P.(DRT) No. 37 of 2020 ..10.. draft dated 30.9.2019 from a bank, and this is hardly 18 days after the issuance of Ext.P-9 order dated 12.9.2019. The currency period of Ext.P-10 demand draft dated 30.9.2019 was 3 months, and thereafter the petitioners have renewed the said demand draft, and has also made available a photocopy of the said renewed demand draft, which is said to be current even now. 6. In the light of these aspects, ordinarily this Court would have only remitted to the appellate tribunal concerned for decision afresh after hearing both sides. But in the facts of this case, it is seen that the petitioners have already produced the demand draft within hardly about 18 days after the issuance of the impugned order dated 12.9.2019. Therefore there is no necessity for this Court to simply remit the matter and the matter could be interdicted and impugned order could be quashed and necessary directions could also be issued as otherwise, the matter would be prolonged more particularly as the respondent bank has been waiting for quite some time for the finalisation of prosecution of claims. Therefore taking into account the totality of the facts and O.P.(DRT) No. 37 of 2020 ..11.. circumstances of the case, the matter requires interdiction by way of quashment with necessary directions. In that view of the matter it is ordered that the impugned Ext.P-9 order dated 12.9.2019 rendered by the Debt Recovery Appellate Tribunal, Chennai, will stand set aside. Consequently, the main appeal has been dismissed by the Tribunal only on the ground of non production of waived pre-deposit amount. Hence, the said decision also required interdiction. Accordingly, both the order rejecting the time extension application as well as the consequential order passed by the Debt Recovery Appellate Tribunal, dismissing the appeal for non production of the pre-deposit amount, will stand interdicted and set aside. The appeal filed under Sec.18(1) of the SARFAESI Act will stand restored to the file of the Debt Recovery Appellate Tribunal, Chennai. The petitioner will immediately produce the original of the demand draft of Rupees 50 Lakhs and in case by then, the currency period of the demand draft is over, then it is for the petitioner to ensure that a renewed demand draft for the same amount is produced before the Debt Recovery Appellate Tribunal O.P.(DRT) No. 37 of 2020 **==> picture [24 x 7] intentionally omitted <==** without any further delay. Consequently it is also ordered that, the plea made by the petitioner in Ext.P-4 will stand partially allowed by ordering that time extension is granted upto the date of issuance of Ext.P-10 demand draft dated 30.9.2019. If the presently renewed demand draft or the demand draft which is yet to be renewed is produced before the Appellate Tribunal within 10 days from the date of receipt of a certified copy of this judgment, then the said demand draft should be as if it has been submitted within the said extended time limit, and so, it should be treated as if it is the deposit of requisite pre-deposit amount in terms of 2[nd] proviso to Sec.18(1) of the SARFAESI Act, as waived by the 3[rd] proviso thereto. Needless to say, Ext.P-4 order granting the waiver amount as well as the interim stay shall stand revived. In view of the abovesaid order, the main appeal will stand restored to file for prosecution on merits and in accordance with law. 7. Sri.R.S.Kalkura, learned counsel appearing for the respondents submits that this Court may direct the Appellate Tribunal to ensure that the main appeal is disposed of O.P.(DRT) No. 37 of 2020 **==> picture [24 x 9] intentionally omitted <==** without much delay. 8. That is an aspect which both or any one of the parties may make a plea before the Appellate Tribunal and it is for the Appellate Tribunal to take a decision on merits on the said appeal in accordance with law, within reasonable time limit that may be appropriately fixed by, in the manner it deems fit and proper. With these observations and directions, the above Original Petition (DRT) will stand disposed of. Sd/- ALEXANDER THOMAS, JUDGE MMG ## O.P.(DRT) No. 37 of 2020 ..14.. ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** **EXHIBIT P1 A TRUE COPY OF THE APPEAL MEMORANDUM DATED 4.4.2019 WITHOUT ANNEXURES IN AIR (SA) NO.156 OF 2019 BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, CHENNAI.** **EXHIBIT P2 A TRUE COPY OF I.A.NO.625/2019, THE APPLICATION FOR WAIVER OF DEPOSIT IN AIR(SA) NO.156 OF 2019 BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, CHENNAI.** **EXHIBIT P3 A TRUE COPY OF THE APPLICATION FOR STAY IN AIR(SA) NO.156 OF 2019 BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, CHENNAI.** **EXHIBIT P4 A TRUE COPY OF THE ORDER DATED 13.8.2019 IN AIR(SA) NO.156 OF 2019 OF THE DEBTS RECOVERY APPELLATE TRIBUNAL, CHENNAI.** **EXHIBIT P5 A TRUE COPY OF THE LETTER DATED 19.7.2019 OF THE 1ST PETITIONER BEFORE THE 2ND RESPONDENT BANK.** **EXHIBIT P6 A TRUE COPY OF THE LETTER DATED 29.7.2019 OF THE 2ND RESPONDENT.** **EXHIBIT P7 THE TRUE COPY OF THE ORDER DATED 5.9.2019 IN O.P(DRT) NO.150/2019 OF THIS HON'BLE COURT.** **EXHIBIT P8 A TRUE COPY OF THE AFFIDAVIT AND PETITION FOR EXTENSION OF TIME FILED AS I.A.NO.826 OF 2019 IN EXHIBIT P1 APPEAL BEFORE THE APPELLATE TRIBUNAL.** **EXHIBIT P9 TRUE COPY OF THE ORDER DATED 12.9.2019 IN AIR (SA) NO.156 OF 2019.** **EXHIBIT P10 TRUE COPY OF THE BANK DEMAND DRAFT DATED 30.9.2019 IN FAVOUR OF THE REGISTRAR, DRAT, CHENNAI FOR RUPEES FIFTY LAKHS.** O.P.(DRT) No. 37 of 2020 ..15..