VBC 1 wp7264.11-14.9 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE WRIT PETITION NO.7264 OF 2011 Dadasaheb Krishna Kadam & Anr. ..Petitioners versus HDFC Ltd, & Ors. ..Respondents. ..... Mr.Sanjay Jain i/b. Kaikini Phadke & Associates for the Petitioners. Mr.Atul Daga with Mr.Nikhil Mengde i/b. Thakore Jariwala & Associates for Respondent No.1. ..... CORAM : DR.D.Y.CHANDRACHUD & A. A. SAYED, JJ. September 14, 2011. P.C. : The Petitioners who are aggrieved by an order passed by the Debts Recovery Tribunal, dismissing an application under Section 17 of the the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, have already filed an appeal before the Debts Recovery Appellate Tribunal. The reason for instituting these proceedings under Article 226 of the Constitution is that there is a vacancy in the office of the Chairperson of the DRAT at Mumbai. While the Union Government has made alternate arrangements by giving concurrent VBC 2 wp7264.11-14.9 charge of the DRAT, Mumbai to the DRAT at Kolkata, the Court is informed that no sittings have taken place at Mumbai. As a result, litigating parties are required to undergo the hardship of moving appeals and the applications for interim reliefs at Kolkata which may not be feasible where small borrowers are concerned. In the present case, the amount which was claimed under Section 13(2) which was due on 29 December 2006 was Rs.13.84 Lakhs. 2. While issuing notice on 5 September 2011, this Court had granted an interim protective order directing the First Respondent not to take possession of the secured asset conditional on the Petitioners depositing an amount of Rs.2 lakhs within one week with the First Respondent. The amount of Rs.2 lakhs has been deposited on 13 September 2011. Having regard to the provisions contained in sub-section (1) of Section 18 read with the second and third provisos thereto, it is clear that an appeal before the DRAT cannot be entertained unless there is a deposit of 50% of the amount due as claimed by the secured creditors or as determined by the Tribunal whichever is less. However, the Appellate Tribunal may for reasons to be recorded in writing VBC 3 wp7264.11-14.9 reduce it to 25% of the debt referred to in the second proviso. 3. Having regard to the peculiar circumstances existing at present, arising out of the vacancy in the office of the Chairperson of the DRAT at Mumbai, we are of the view that the ends of justice would be met if the Petitioners are directed to deposit a further amount of Rs.3 lakhs with the First Respondent as a condition precedent. A total deposit of Rs.5 lakhs will comply with the mandate of the proviso to sub-Section (2) of Section 18. We are also inclined to issue that direction having regard to the fact that during the pendency of the proceedings before the Tribunal and as recorded by the Tribunal at paragraph 21, the Petitioner furnished a cheque for Rs.5 lakhs dated 9 June 2011 which was, however, not honoured on presentation. Having regard to the totality of the facts and circumstances of the case, a deposit of an amount of Rs.5 lakhs would be in order. Since the Petitioners have already deposited an amount of Rs.2 lakhs with the First Respondent, we direct that the Petitioners shall, within a period of three weeks from today, deposit a further amount of Rs.3 lakhs with the First Respondent. The deposit made shall abide by the result of the VBC 4 wp7264.11-14.9 appeal filed in the DRAT. Conditional on depositing the aforesaid amount, ad-interim order dated 5 September 2011 directing the First Respondent not to take possession of the secured asset shall continue to remain in force until the appeal is finally disposed of by the DRAT. In the event of there being a default on the part of the Petitioners in complying with the further order of deposit as directed above, the necessary consequence under the law shall ensue and the interim direction shall stand vacated without further reference to Court. The Petition is accordingly disposed of. There shall be no order as to costs. 4. Though we have disposed of the Petition, we are apprised of the fact that as a result of a vacancy in the office of the Chairperson of the DRAT at Mumbai, there has been a dislocation in the work of the Appellate Tribunal. The object and purpose underlying the enactment of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is to facilitate expeditious recovery of dues owing to Banks and financial institutions. In the circumstances, we are of the view that it would be necessary to issue notice to impress upon the Union VBC 5 wp7264.11-14.9 Ministry of the Finance (Department of Revenue) the urgency of the need to fill up the vacancy. We request the Learned Additional Solicitor General, Shri Darius Khambata, to take instructions and accordingly place the proceedings for directions on 20 September 2011, so that the Court can be apprised of the position. ( Dr.D.Y.Chandrachud, J.) ( A. A. Sayed, J.)