1 wp3384.11.sxw ssm IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 3384 OF 2011 Iswardas Topandas Ghanshani & Ors. ...Petitioners. Vs. The Needs of Life Co-op. Bank Ltd. & Ors. ...Respondents. Mr. V.R. Dhond with Mr. Mayur Khandeparkar and Ms. Sapna Rachure i/by M/s. T.N. Tripathi & Co. for the Petitioners. Mr.Rushabh Shah with Ms. Rita Yadav and Mr. Puneet Gogand i/by M/s. Raval Shah & Co. for the Respondents. CORAM: DR. D.Y. CHANDRACHUD AND ANOOP V. MOHTA, JJ. DATE : JULY 7, 2011. P.C.:- The Petition is directed against an order of the Debts Recovery Appellate Tribunal by which the Petitioners were called upon to deposit an amount of `55 lakhs. In the notice that was issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, on 7 December 2004, an amount of `1.31 crores was claimed to be due and payable. Before this Court, it is not in dispute that the Petitioners deposited an 2 wp3384.11.sxw ssm amount of `80 lakhs before the Co-operative Court in February 2006. According to the First Respondent-Bank, as on 31 December 2010, the amount that was due and payable by the Petitioners was `2.5 crores. 2 The Debts Recovery Appellate Tribunal observed that for the purpose of the disposal of the application for waiver, the amount claimed in the notice under Section 13(2) is to be accepted, unless the amount has been adjudicated upon. A dispute is pending before the Co-operative Court but the final adjudication has not been made as yet. Now, the second proviso to sub-section (1) of Section 18 of the Securitisation Act, provides that before an Appeal can be entertained, the borrower has to deposit in the Appellate Tribunal fifty per cent of the amount of debt due, as claimed by the secured creditors or as determined by the Debts Recovery Tribunal, whichever is less. Under the third proviso, this amount can be reduced by the Tribunal for reasons to be recorded in writing, to an amount not less than twenty- five per cent of the debt referred to in the second proviso. 3 Counsel appearing on behalf of the Petitioners submitted that the amount which has been ordered to be deposited by the Debts Recovery Appellate Tribunal is excessive having regard to the fact that 3 wp3384.11.sxw ssm a year prior to the notice under Section 13(2), the bank had claimed an amount of `65 lakhs approximately in a demand notice dated 25 September, 2002. However, in the notice under Section 13(2), issued on 7 December 2004, the amount was enhanced to `1.31 crores. It has been urged that the Bank has charged 22% interest for the entire period under consideration. Counsel urged that a Division Bench of the Delhi High Court in Poonam Manshani Vs. J.& K. Bank Ltd. & Anr.1 has held that the amount of debt due, by ignoring the interest component, would be the amount specified in the notice under Section 13(2), less any recovery made by the bank thereafter. According to the Petitioners the real dispute is with a Director of the Bank who is related to the First Petitioner. On the other hand, it has been urged on behalf of the bank that an amount of `2.49 crores was due as at the end of December 2010 upon which further interest would accrue, hence no case for interference has been made out. 4 The Debts Recovery Appellate Tribunal, has observed that since the claim is still to be adjudicated upon, for the purpose of the application for waiver, it is the amount claimed in the notice under Section 13(2) that is relevant. In the notice under Section 13(2), the 1 AIR 2010 Delhi 28 4 wp3384.11.sxw ssm bank had claimed an amount of `1.31crores. In computing whether a case for waiver has been made out the fact that the Petitioners have deposited an amount of `80 lakhs in the Co-operative Court cannot be ignored. In this view of the matter, we are of the view that consistent with the mandate of the third proviso to sub-section (1) of Section 18 a partial modification of the order of deposit is warranted. We accordingly, direct that in substitution of the amount of `55 lakhs order to be deposited by the Debts Recovery Appellate Tribunal, the Petitioners shall deposit an amount of `35 lakhs within a period of four weeks from today. In the event the amount is deposited, the same shall be invested in the manner directed by the Debts Recovery Appellate Tribunal. Consequences under the law will ensue in the event of a default. The Petition is accordingly disposed of. There shall be no order as to costs. 5 In view of the period of four weeks which has been granted for effecting deposit, Counsel for the bank states that the status-quo will be maintained for a period of four weeks. (ANOOP V. MOHTA, J.) (DR. D.Y. CHANDRACHUD, J.)