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MAHARAJI EDUCATIONAL TRUST THRU' ITS SECRETARY & OTHERS versus PUNJAB AND SIND BANK AND OTHERS

High Court of Judicature at Allahabad

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Maharaji Educational Trust Thru' Its Secretary & Others v. Punjab And Sind Bank And Others - WRIT - C No. 22906 of 2006 [2006] RD-AH 8424 (26 April 2006)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

                                                                                       Court No.38

Civil Misc. Writ Petition No. 22906 of 2006

Maharaji Educational Trust & others

Versus

Punjab & Sind Bank & others

Hon'ble Vineet Saran, J

The petitioner-Trust had taken a loan from the respondent-Punjab & Sind Bank, which could not be repaid within time. Initially negotiations for one time settlement were going on between the petitioners and the Bank, which could not fructify  and hence the Bank filed an Original Application under Section 19 of the Recovery of Dues due to Banks and Financial Institutions Act, 1993. The application of the Bank was allowed by the Debts Recovery Tribunal vide its order dated 25.8.2005 and recovery for a sum of over Rs. 26 crores was directed against the petitioners. Challenging the said order, the petitioners filed an appeal before the Debts Recovery Appellate Tribunal, alongwith an application under Section 21 of the Act for waiver of the deposit to be made with the appeal. By an order dated 10.1.2006 the Appellate Tribunal partly allowed the application and directed that the appeal of the petitioners be entertained on their depositing a sum of Rs. 5 crores within two months, out of which the sum of Rs. 1 crore, which had already been deposited by the petitioners, was to be adjusted, meaning thereby, the petitioners were thus required to deposit a further sum of Rs. 4 crores. Since the petitioners could not deposit the entire amount within the time granted by the Appellate Tribunal, after depositing  a sum of Rs. 50 lacs on 2.3.2006, the petitioners filed an application for extending the time for making the full deposit as per order dated 10.1.2006. Vide order dated 6.3.2006, the Appellate Tribunal extended the time upto 15th April, 2006. After such order had been passed, the petitioners deposited a further sum of Rs. 35 lacs and again approached the Appellate Tribunal for extension of time upto 31st May, 2006 on various grounds stated in the application.  Such application of the petitioners has been rejected by the Appellate Tribunal vide its order dated 17.4.2006. Aggrieved by the said order, the petitioner has approached this Court.

Although several prayers have been made in the writ petition but the only prayer pressed by the learned counsel for the petitioners is for extension of time for making such deposit.

I have heard Sri R.N.Singh, learned Senior Counsel, assisted by Sri C.B.Yadav and Sri Amit Saxena on behalf of the petitioners and Sri Pramod Jain, learned counsel appearing for the contesting respondent no. 1-Punjab & Sind Bank. Sri P.K.Singhal has accepted notice for respondent no. 4. In view of the nature of the order which is being passed and keeping in view that no useful purpose would be served by requiring the respondents to file counter affidavit, this writ petition is being disposed of at this stage.

The submission of the learned counsel for the petitioners is that the petitioner no. 1-Trust is running educational institutions and is unable to make arrangement of making deposit of such a huge amount immediately. It has been stated that the petitioners would be able to arrange for funds, only after fees for the next academic session is deposited by the students, which would be some time in the middle of May, 2006 and thus they undertake to deposit the balance amount, as directed by the Appellate Tribunal vide order dated 10.1.2006, by 31st May, 2006. It has also been contended that the intention of the petitioner-Trust in making deposit, so that the appeal is entertained and heard on merits, is clear, as after the passing of the order dated 10.1.2006 and 6.3.2006, they have made some deposits before filing the applications for extension of time. It has been urged that had the petitioners not intended to comply with the directions of the Appellate Tribunal, they would not have made any deposits and simply prayed for extension of time.

The purpose of imposing a condition of making the deposit before filing an appeal under the Act is not to debar a litigant from filing an appeal but only to safeguard the interest of the party in whose favour the order has been passed by the Tribunal. The condition of making 75% deposit alongwith the appeal may have been provided under Section 21 of the Act, but the proviso to the said Section gives discretion to the Appellate Authority to waive such condition. The said discretion has to be exercised judiciously, after considering the facts of the particular case. In the present case, where a heavy amount is involved, the Appellate Tribunal had itself considered it to be just and proper that the appeal of the petitioners be entertained on their depositing Rs. 5 crores. The petitioners are not seeking further waiver but are only seeking extension of time for making such deposit. In my view, since the petitioners have made certain deposits after the passing of the orders by the Appellate Authority, it does not appear that they have no intentions to pay the balance amount.

Although the learned counsel for the respondent has tried to justify the passing of the impugned order, but has further submitted that in case the time to make the deposit is to be extended, to safeguard the interest of the Bank, the petitioners should be directed to deposit some further amount.

Considering the facts of this case and the totality of the circumstances and after balancing the equities between the parties, in my view, the Appellate Authority was not justified in rejecting the application of the petitioners and some further time ought to have been granted for depositing the balance amount, may be after imposing some further conditions. Accordingly, the order dated 17.4.2006 is set aside and it is provided that the appeal of the petitioners filed before the Appellate Tribunal may be entertained and heard on merits, only if the petitioners deposit the balance amount of the total sum as directed by order dated 10.1.2006, on or before 31st May, 2006, with a further condition that an additional sum of Rs. 1 crore be deposited by them by 7th June, 2006. Sri R.N.Singh, learned Senior Counsel for the petitioners does not object to this further condition. However, in case if the said amounts are not deposited within the aforesaid stipulated period, the Appellate Authority may refuse to entertain the appeal of the petitioners, but in case if the said amounts are deposited, the appeal may be heard and decided on merits, as expeditiously as possible, without granting any unnecessary adjournment to either of the parties.  

It has been brought to the notice of the Court that vide order dated 31st March, 2006 recovery from the petitioners is being pressed. The same shall be kept in abeyance and be pressed only in case if the deposits are not made by the petitioners as per the directions given hereinbefore.

In the end Sri Jain, learned counsel for the respondent-Bank submitted that the amount so deposited by the petitioners may be placed in fixed deposit with the Punjab & Sind Bank, as it is their own money which is to be recovered, and the direction given by the Appellate Tribunal, vide its order dated 10.1.2006, that the said amount be placed in 2-3 nationalised Banks in fixed deposit, does not appear to be justified. Sri R.N.Singh, learned Senior Counsel appearing for the petitioners also does not object to this prayer but has only submitted that the respondent-Bank should pay the maximum prevailing rate of interest.

Keeping in view the fact that the money of the Punjab & Sind Bank is to be recovered, such prayer of the respondent-Bank appears to be justified, but only if they are agreeable to pay such interest on the deposit which other nationalized banks may agree to pay. In such view of the matter, with the consent of the learned counsel for the parties, it is directed that the Appellate Tribunal can place the amount so deposited by the petitioners in fixed deposit accounts of nationalized Banks which pay maximum interest, but before making such deposit they shall offer the same to be deposited with the respondent-Punjab & Sind Bank, and if they agree to pay same interest which any other nationalized banks are paying, then the same amount shall be deposited only with the Punjab & Sind Bank.  

Accordingly, this writ petition stands partly allowed to the extent indicated above. No order as to costs.

Dt/-26.4.2006

PS


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