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DRT cannot impose conditionalities while restoring an application

Cause Title : M/s. Ganpat Pannalal Vs. State Bank of India, Writ Petition No. 18238 Of 2022, Madhya Pradesh High Court At Jabalpur

Date of Judgment/Order : 15th Of September, 2022

Corum : Justice Sujoy Paul

Citied: 

  1. Alok Saboo and others v. State Bank of India and others 2013 SCC OnLine MP 10788
  2. R.R. Flour Mills Pvt. Ltd. v. State Bank of India, 2013 SCC OnLine MP 7420
  3. Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and others (1998) 8 SCC 1
  4. (2003) 2 SCC 107, Harbanslal Sahnia and another Vs. Indian Oil Corpn. Ltd. And Others
  5. Rafiq and another v. Munshilal and another (1981) 2 SCC 788
  6. Ram Kumar Gupta and another v. Har Prasad and another (2010) 1 SCC 391
  7. Mardia Chemicals Ltd. and another v. Union of India and another (2004) 4 SCC 311
  8. Alok Saboo and others v. State Bank of India and others 2013 SCC OnLine MP 10788
  9. (2012) 10 SCC 1 (Natural Resources Allocation, in Re, Special Reference No.1 of 2012)
  10. DTC Vs. DTC Mazdoor Congress 1991 supp (1) SCC 600
  11. M/s. Kranti Associates Pvt. Ltd. & Anr. Vs. Masood Ahmed Khan & Ors. (2010) 9 SCC 49
  12. State of U.P. v. Jageshwar (1983) 2 SCC 305
  13. Douglas, J. in United State v. Wunderlich

Background

A securitization application (SA) filed by the petitioner before the Debt Recovery Tribunal (DRT) was dismissed for want of prosecution. Aggrieved, the petitioners filed application seeking restoration ofthe said securitization application. The learned Tribunal directed that the SA will be restored subject to fulfilling certain conditions. The petitioner approached the High Court against the impugned order arguing that the Tribunal had jurisdiction to restore the securitization application (SA) with reasonable cost but could not have imposed the unreasonable conditions, which have no nexus with imposition of cost.

Judgment

The High Court observed that Alok Saboo (supra) & R.R. Flour Mills (supra), it has been held that the Court's power to impose condition for entertaining an application must be provided for under the statute itself.

In our considered opinion, under Section 22(1)(g) of the Act of 1993 the Tribunal was competent to restore the Securitization Application by imposition of reasonable cost. This power of restoration of SA as per Section 22(2)(g) of Act of 2003 cannot be confused with the power flowing from Section 19(25) of the same Act. It is noteworthy that Section 19 of the Act deals with 'application' to the Tribunal. Section.

Thus, when an 'application' is pending in order to secure the ends of justice in that proceeding relating to adjudication of said 'application', appropriate orders may be passed in the interest of justice by taking
assistance of Section 19(25) of the Act of 1993. For example, if in a pending SA, ad-interim relief is prayed for, the Tribunal can very well impose justifiable conditions while granting such interim relief. Such an order will be in-consonance with the scheme and object of Section 19(25) of the Act as well as the judgment of Supreme Court in Mardia Chemicals (supra).

However, in the instant case, the restoration application filed under Section 22(2)(g) cannot be treated to be an 'application' filed under Section 19 of the said Act. Section 22(2)(g) does not provide any power to impose impugned conditions. The impugned order shows that the Tribunal has not directed restoration on payment of cost. Indeed, the Tribunal has put certain conditions. Such conditions, could not have been imposed in exercise of power under Section 22(2)(g) of the said Act of 2003. At the time of ordering restoration, the Tribunal was not required to act as a recovery agent of the Bank.

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