Pre-Deposit Requirement Under SARFAESI Act and Debts Recovery Appellate Tribunal
The case at hand involves S.D. Bhoskar and Co., the appellants, who have filed an appeal against the direction issued by the High Court requiring them to make a pre-deposit before the Debts Recovery Appellate Tribunal (DRAT) under the SARFAESI Act, 2002. The appellants argued that they had already deposited Rs. 12.50 Lakhs in respect of the same subject matter when proceedings were initiated under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Given this prior deposit, the appellants contended that it would be unjust to insist on a further pre-deposit under the SARFAESI Act.
On the other hand, the respondent, Bank of Baroda, maintained that the pre-deposit requirement under the SARFAESI Act was a necessary procedural step. Both parties were prepared to address the issue of law, but the Supreme Court, after considering the arguments, chose not to engage with the legal question directly. Instead, the Court decided to focus on the facts of the case.
Justice Kurian Joseph, delivering the judgment, noted the peculiar facts of the case. The Court did not wish to address the legal question of whether the pre-deposit requirement under the SARFAESI Act was mandatory in light of the previous deposit under the Recovery of Debts Act. Instead, the Supreme Court disposed of the appeal by directing the DRAT, Mumbai, to expeditiously dispose of Appeal Nos. 296 of 2006 and 139 of 2011 within six months from the date of the judgment.
Additionally, the Supreme Court directed the parties to cooperate in the timely disposal of the appeals and extended the interim order that had been granted, staying the further deposit under the SARFAESI Act until the appeals were resolved. The Court also directed that no coercive steps could be taken for recovery until the disposal of the appeals by the DRAT.
In conclusion, the Supreme Court chose to prioritize the swift resolution of the appeals before the DRAT while leaving the legal question surrounding the pre-deposit requirement open. This judgment highlights the importance of procedural fairness in debt recovery matters while ensuring that the parties cooperate in resolving the dispute without undue delays.
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