High Court · 2025

1. Heard learned counsel for the petitioners and learned counsel for the respondent.

2. It is submitted by learned counsel for the petitioner that the petitioners are the legal heirs of one of the guarantors and an ex- parte decree was passed by judgment dated 26.9.2018 passed in TA No.609 of 2018. Being aggrieved by the aforesaid judgment, the petitioners have filed an application for recall under Section 22(2) (g) of Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to 'Act of 1993'). The aforesaid application was rejected by order dated 17.1.2019. The petitioner thereafter, had preferred an appeal before the Debts Recovery Appellate Tribunal, Allahabad against the order dated 17.1.2019. In the aforesaid appeal, an objection was raised that the pre-deposit under Section 21 of the Act of 1993 was not deposited. By the impugned order, the Appellate Tribunal has rejected the appeal on the ground that the defects are not removed by the petitioner. The only defect in the appeal was pre-deposit under Section 21 of the Act of 1993. Since the appeal was against an order passed on an application under Section 22(2)(g) of the Act of 1993, in view of the judgment of this Court passed in the case of Jai Gopal Kansal and another Vs. Indian Bank, Branch Office, Railway Road Hapur, 2019 (144) RD 245, the applicant was not required to deposit the amount under Section 21 of Act of 1993.

3. It is further submitted by learned counsel for the petitioner that even otherwise the petitioners are the legal heirs of one of the guarantor and as such the rigors of Section 21 of the Act of 1993 would not be applicable in the case of the petitioner as the liability under law would be limited to the assets inherited from the original guarantor. In view of the judgment of this Court in the case of Jai Gopal Kansal and another (supra), the impugned orders are not sustainable under law.

4. Sri Praneet Srivastava, learned counsel for the respondent Bank submits that the defect in the appeal was to the extent that the deposit under Section 21 of the Act was not made by the petitioner. Against the ex-parte decree, a recall application was filed under Section 22)2)(g) of the Act of 1993 by the petitioners, which was rejected by order dated 17.1.2019 and against the order dated 17.1.2019, an appeal was filed before the Debts Recovery Appellate Tribunal.

5. On a query being made to learned counsel for the respondent- Bank with regard to the law laid down by this Court in the case of Jai Gopal Kansal and another (supra), learned counsel for the respondent-Bank could not dispute the aforesaid proposition of law. Although, learned counsel for the petitioner submits that the appeal of the principal borrower was rejected by order dated 26.9.2018 and against which writ petition i.e. Writ-C No.23057 of 2024 was filed, which has been dismissed by order dated 3.10.2024.

6. In effect, learned counsel for the respondent-Bank submits that the decree passed by the Debts Recovery Appellate Tribunal on 26.9.2018 against which the petitioner had filed an application under Section 22(2)(g) of the Act of 1993. The aforesaid application was rejected by order dated 17.1.2019 by the Debts Recovery Tribunal. Against the order dated 17.1.2019 the petitioners have preferred an appeal before the Debts Recovery Appellate Tribunal. The aforesaid appeal has been rejected by impugned order dated 9.5.2023 read with 24.8.2023 on the ground that the defects have not been removed.

7. It is not in dispute between the parties that the sole defect in the appeal was of non-deposit of the pre-deposit under Section 21 of the Act of 1993. It is also not in dispute between the parties that the present appeal arises out of an order passed in application filed under Section 22(2)(g) of the Act of 1993.

8. This Court in Jai Gopal Kansal and another (supra) has held that pre-deposit of amount in an appeal arising out of an application filed under Section 22(2)(g) of the Act of 1993 would not be required as the appeal would be a miscellaneous appeal not being an appeal against the original decree passed in favour of the bank. In this respect, paragraph 26 to 33 of the aforesaid judgment is quoted hereunder:- "26. In the present case, the appeal filed under Section 20 before the Appellate Tribunal was in fact a misc. appeal filed, against an order rejecting an application under Order IX Rule 13 for setting aside an ex parte decree, as such the said misc. appeal was not against any decree, but was against an order. Section 21 of the Act contemplates that the amount of pre-deposit has to be made when the appeal is filed against the amount of debts so due as determined by the Tribunal under Section 19. In the present case, the appeal is not against the order determining the debt due dated 31.08.2009, but is against the order dated 04.09.2013 rejecting the recall application for setting aside an ex parte decree."

27. In case of Jyoti Construction (supra), this Court had held as under: "A perusal of Section 22 (2) (f) and (g) of the Act of 1993 indicates that the Tribunal has the power to dismiss an application for default and also has the power to set aside any order of dismissal of any application for default. The Appellate Tribunal also has the same powers of the Code of Civil Procedure to the extent stated in Section 22. In the light of the aforesaid provision, it is apparently clear that the Tribunal has the power to dismiss an application for want of prosecution and also has the power to set aside an order of dismissal of an application for default. Orders passed on such application does not amount to a decree, and consequently, a miscellaneous appeal can be filed under Section 104 read with Order 43 Rule 1 (c) of the Code of Civil Procedure. Section 18 of the Act of 2002 gives a right to any person aggrieved by any order of the Tribunal to file an appeal before the Appellate Tribunal. The word "any order" includes an order passed on a miscellaneous application."

28. In the said case the court was also dealing with a question regarding application for restoration and the Court held that the appeal so filed was a misc. appeal and was not a regular appeal as contemplated under Section 96 C.P.C., but was an appeal under Section 104 read with order XLIII Rule 1 (d), as such the demand for deposit of court fee was not correct.

29. However, in the present case, petitioner himself committed mistake by filing a waiver application before the Appellate Tribunal seeking waiver of pre-deposit, as such the tribunal proceeded to decide waiver application and required the petitioner to deposit 25% amount as pre-deposit for the entertainment of the appeal.

30. However, by amendment in the writ petition, the petitioners have submitted in para 39(G) that it was by-mistake that petitioners have filed waiver application along with their appeals as there was no requirement of such application being misc. appeal.

31. In view of the facts that the appeal filed by petitioner is a misc. appeal seeking relief of only setting aside the order dated 04.09.2013, whereby his recall application has been rejected. The waiver application so filed is of no consequence.

32. In view of the above, the order dated 02.10.2018 passed by the Debts Recovery Appellate Tribunal, requiring the petitioner to deposit 25% of the amount, i.e., Rs.1 crore before making the appeal entertainable is set aside and it is directed that the Appellate Tribunal shall consider misc. appeal filed by petitioner on merits without insisting for the said amount and decide the same preferably within six weeks from the date of production of certified copy of this order.

33. The writ petition stands allowed."

9. Learned counsel for the respondent-Bank has not disputed the proposition of law laid down by this Court in the aforesaid judgment.

10. In view of the law laid down by this Court in the case of Jai Gopal Kansal and another (supra), the impugned orders are not sustainable under law. The writ petition is allowed. The order dated 9.5.2023 and order dated 24.8.2023 passed by respondent no.1 is hereby set aside. The matter is remanded back to the Debts Recovery Appellate Tribunal for decision on merits. Order Date :- 17.1.2025 Bhaskar BHASKAR High Court of Judicature at Allahabad

1. Heard learned counsel for the petitioners and learned counsel for the respondent.

2. It is submitted by learned counsel for the petitioner that the petitioners are the legal heirs of one of the guarantors and an ex- parte decree was passed by judgment dated 26.9.2018 passed in TA No.609 of 2018. Being aggrieved by the aforesaid judgment, the petitioners have filed an application for recall under Section 22(2) (g) of Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to 'Act of 1993'). The aforesaid application was rejected by order dated 17.1.2019. The petitioner thereafter, had preferred an appeal before the Debts Recovery Appellate Tribunal, Allahabad against the order dated 17.1.2019. In the aforesaid appeal, an objection was raised that the pre-deposit under Section 21 of the Act of 1993 was not deposited. By the impugned order, the Appellate Tribunal has rejected the appeal on the ground that the defects are not removed by the petitioner. The only defect in the appeal was pre-deposit under Section 21 of the Act of 1993. Since the appeal was against an order passed on an application under Section 22(2)(g) of the Act of 1993, in view of the judgment of this Court passed in the case of Jai Gopal Kansal and another Vs. Indian Bank, Branch Office, Railway Road Hapur, 2019 (144) RD 245, the applicant was not required to deposit the amount under Section 21 of Act of 1993.

3. It is further submitted by learned counsel for the petitioner that even otherwise the petitioners are the legal heirs of one of the guarantor and as such the rigors of Section 21 of the Act of 1993 would not be applicable in the case of the petitioner as the liability under law would be limited to the assets inherited from the original guarantor. In view of the judgment of this Court in the case of Jai Gopal Kansal and another (supra), the impugned orders are not sustainable under law.

4. Sri Praneet Srivastava, learned counsel for the respondent Bank submits that the defect in the appeal was to the extent that the deposit under Section 21 of the Act was not made by the petitioner. Against the ex-parte decree, a recall application was filed under Section 22)2)(g) of the Act of 1993 by the petitioners, which was rejected by order dated 17.1.2019 and against the order dated 17.1.2019, an appeal was filed before the Debts Recovery Appellate Tribunal.

5. On a query being made to learned counsel for the respondent- Bank with regard to the law laid down by this Court in the case of Jai Gopal Kansal and another (supra), learned counsel for the respondent-Bank could not dispute the aforesaid proposition of law. Although, learned counsel for the petitioner submits that the appeal of the principal borrower was rejected by order dated 26.9.2018 and against which writ petition i.e. Writ-C No.23057 of 2024 was filed, which has been dismissed by order dated 3.10.2024.

6. In effect, learned counsel for the respondent-Bank submits that the decree passed by the Debts Recovery Appellate Tribunal on 26.9.2018 against which the petitioner had filed an application under Section 22(2)(g) of the Act of 1993. The aforesaid application was rejected by order dated 17.1.2019 by the Debts Recovery Tribunal. Against the order dated 17.1.2019 the petitioners have preferred an appeal before the Debts Recovery Appellate Tribunal. The aforesaid appeal has been rejected by impugned order dated 9.5.2023 read with 24.8.2023 on the ground that the defects have not been removed.

7. It is not in dispute between the parties that the sole defect in the appeal was of non-deposit of the pre-deposit under Section 21 of the Act of 1993. It is also not in dispute between the parties that the present appeal arises out of an order passed in application filed under Section 22(2)(g) of the Act of 1993.

8. This Court in Jai Gopal Kansal and another (supra) has held that pre-deposit of amount in an appeal arising out of an application filed under Section 22(2)(g) of the Act of 1993 would not be required as the appeal would be a miscellaneous appeal not being an appeal against the original decree passed in favour of the bank. In this respect, paragraph 26 to 33 of the aforesaid judgment is quoted hereunder:- "26. In the present case, the appeal filed under Section 20 before the Appellate Tribunal was in fact a misc. appeal filed, against an order rejecting an application under Order IX Rule 13 for setting aside an ex parte decree, as such the said misc. appeal was not against any decree, but was against an order. Section 21 of the Act contemplates that the amount of pre-deposit has to be made when the appeal is filed against the amount of debts so due as determined by the Tribunal under Section 19. In the present case, the appeal is not against the order determining the debt due dated 31.08.2009, but is against the order dated 04.09.2013 rejecting the recall application for setting aside an ex parte decree."

27. In case of Jyoti Construction (supra), this Court had held as under: "A perusal of Section 22 (2) (f) and (g) of the Act of 1993 indicates that the Tribunal has the power to dismiss an application for default and also has the power to set aside any order of dismissal of any application for default. The Appellate Tribunal also has the same powers of the Code of Civil Procedure to the extent stated in Section 22. In the light of the aforesaid provision, it is apparently clear that the Tribunal has the power to dismiss an application for want of prosecution and also has the power to set aside an order of dismissal of an application for default. Orders passed on such application does not amount to a decree, and consequently, a miscellaneous appeal can be filed under Section 104 read with Order 43 Rule 1 (c) of the Code of Civil Procedure. Section 18 of the Act of 2002 gives a right to any person aggrieved by any order of the Tribunal to file an appeal before the Appellate Tribunal. The word "any order" includes an order passed on a miscellaneous application."

28. In the said case the court was also dealing with a question regarding application for restoration and the Court held that the appeal so filed was a misc. appeal and was not a regular appeal as contemplated under Section 96 C.P.C., but was an appeal under Section 104 read with order XLIII Rule 1 (d), as such the demand for deposit of court fee was not correct.

29. However, in the present case, petitioner himself committed mistake by filing a waiver application before the Appellate Tribunal seeking waiver of pre-deposit, as such the tribunal proceeded to decide waiver application and required the petitioner to deposit 25% amount as pre-deposit for the entertainment of the appeal.

30. However, by amendment in the writ petition, the petitioners have submitted in para 39(G) that it was by-mistake that petitioners have filed waiver application along with their appeals as there was no requirement of such application being misc. appeal.

31. In view of the facts that the appeal filed by petitioner is a misc. appeal seeking relief of only setting aside the order dated 04.09.2013, whereby his recall application has been rejected. The waiver application so filed is of no consequence.

32. In view of the above, the order dated 02.10.2018 passed by the Debts Recovery Appellate Tribunal, requiring the petitioner to deposit 25% of the amount, i.e., Rs.1 crore before making the appeal entertainable is set aside and it is directed that the Appellate Tribunal shall consider misc. appeal filed by petitioner on merits without insisting for the said amount and decide the same preferably within six weeks from the date of production of certified copy of this order.

33. The writ petition stands allowed."

9. Learned counsel for the respondent-Bank has not disputed the proposition of law laid down by this Court in the aforesaid judgment.

10. In view of the law laid down by this Court in the case of Jai Gopal Kansal and another (supra), the impugned orders are not sustainable under law. The writ petition is allowed. The order dated 9.5.2023 and order dated 24.8.2023 passed by respondent no.1 is hereby set aside. The matter is remanded back to the Debts Recovery Appellate Tribunal for decision on merits. Order Date :- 17.1.2025 Bhaskar BHASKAR High Court of Judicature at Allahabad