NARAYAN CHANDRA GHOSHversusUCO BANK & ORS.

                        (2011] 3 S.C.R. 1024


A                  NARAYAN CHANDRA GHOSH
                                   v.
                         UCO BANK & ORS.
                  (Civil Appeal No. 2681 of 2011)
                          MARCH 18, 2011
B
                [D.K. JAIN AND H.L. DATIU, JJ.]

        Securitization and Reconstruction of Financial Assets and
    Enforcement of Security Interest Act, 2002:
c       s.18 - Requirement of pre-deposit of amount in terms of
  s. 18 - Whether mandatory - Held: Right to file appeal ui~. 18
  is conferred subject to condition laid down in the second
  proviso thereto - The second proviso postulates thpt no
  appeal shall be entertained unless the borrower has
D deposited with the Appellate Tribunal 50% of the amount of
  debt due from him, as claimed by the secured creditors or as
  determined by the Debts Recovery Tribunal, whichever is less
  - H<?wever, under the third proviso to the sub-section, the
  Appellate Tribunal has the power to reduce the amount, for
E the reasons to be recorded in writing, to not less than 25% of
  the debt. referred to in the second proviso - Thus, there is
  an absolute bar to entertainment of an appeal u/s. 18 of the
  Act unless the condition precedent, as stipulated, is fulfilled
  - In the instant case, the order of the Appellate Tribunal,
F entertaining borrower's appeal without insisting on pre-deposit
   was clearly unsustainable - In the notice issued to the
   borrower u/s. 13(2) of the Act, the debts due was Rs. 52, 42, 4741
   - - Since the Debts Recovery Tribunal had not determined
   the debt due, the borrower is directed to deposit with the
G Appellate Tribunal an amount of Rs. 15 lakhs within a period
   of four weeks - Thereafter, appeal to be entertained and
   decided on merits.
        s. 18, second proviso - Right to file appeal subject to
H                                1024
 NARAYAN CHANDRA GHOSH v. UCO BANK & ORS. 1025

 tonditions -. Hekl: When a statute confers a right of appeal, A ·..· ·
 while granting the right,.· the legislature. can impose conditions
 for.the exercise of such right, so long as the conditions are
 not so onerous as to amount to unreasonable restrictions, ·
 rendering the right almost illusory - Bearing in mind the object ·
 of the Act, . the conditions hedged in the second proviso B
 cannot be said to be onerous - Interpretation of statutes.
     T~c appellant-borrower filed an appeal under Section
 17 of the Seeuritization and Reconstruction qf Financial
 Assets and Enforcement of Security Interest A~t, 2002. · C
 The Debt Recovery Tribunal did not entertain the appeal
 on a technical ground. The Debt Recovery Appellate
 Tribunal while allowing the application filed by the
 appellant under Section 18 of the Act exempted him from
 making aily deposit iSJ terms of second proviso to Section
 18 of the Act.                                             ·D
         .   '                      .            .

     · The question which arose for consideration in the
 instant appeal was whether the Appellate Tribunal has the
 jurisdiction to exempt the person, preferring an appeal
 under Section 18 of the Act from making any pre-deposit        E
 in terms of the said provision.

     Disposing of the appeal, the Court

       HELD: Section 18(1) of the Securitization and
  Reconstruction of Financial Assets and Enforcement of F
  Security Interest Act, 2002 confers a statutory right on a
  person aggrieved by any order made by the Debts
--Recovery Tribunal under Section 17 of the Act to prefer
  an appeal to the Appellate Tribunal. However, the right
  conferred under Section 18(1) is subject to the condition· G
  laid down in the second proviso thereto, The second
  proviso postulates that no appeal shall be entertained.
  unless the borrower has deposited with the Appellate
  Tribunal fifty per cent of the amount of debt due from him,
  as claimed by the secured creditors or determined by the H
   1026    SUPREME COURT REPORTS                [2011] 3 S.C.R.


A Debts Recovery Tribunal, whichever is less. However,
  under the third proviso to the sub-section, the Appellate
  Tribunal has the power to reduce the amount, for the
  reasons to be recorded in writing, to not less than
  twenty-five per cent of the debt, referred to in the second
B proviso. Thus, there is an absolute bar to entertainment
  of an appeal under Section 18 of the Act unless the
  condition precedent, as stipulated, is fulfilled. Unless the
  borrower makes, with the Appellate Tribunal, a pre-
  deposit of fifty per cent of the debt due from him or
c determined, an appeal under the said provision cannot
  be entertained by the Appellate Tribunal. The language
  of the said proviso is clear and admits of no ambiguity. It
  is well-settled that when a statute confers a right of
  appeal, while granting the right, the Legislature can
0 impose conditions for the exercise of such right, so long
  as the conditions are not so onerous as to amount to
  unreasonable restrictions, rendering the right almost
  Illusory. Bearing in mind the object of the Act, the
  conditions hedged in the said proviso cannot be said to
  be onerous. Thus, the requirement of pre-deposit under
E sub-section (1) of Section 18 of the Act is mandatory and
  there is no reason whatsoever for not giving full effect to
  the provisions contained in Section 18 of the Act. In that
  view of the matter, no court, much less the Appellate
  Tribunal, a creature of the Act itself, can refuse to give full
F effect to the provisions of the Statute. The deposit under
  the second proviso to Section 18 (1) of the Act being a
  condition precedent for preferring an appeal under the
  said section, the Appellate Tribunal had erred in law in
  entertaining the appeal without directing the appellant to
G comply with the said mandatory requirement. [Para 8)
   [1030-C-H; 1031-A-C]

      2. The argument that as the amount of debt due had
  not been determined by the 'Debts Recovery Tribunal,
H appeal could be entertained by the Appellate Tribunal
NARAYAN CHANDRA GHOSH v. UCO BANK & ORS.1027


  without insisting on· pre-deposit, is equally fallacious. A
· Under the second proviso to sub-section(1) of Se.ction 18
  of the Act, the amount of fifty per cent, which is required
  to be deposited by the borrower, is computed either with
   reference to the debt due from. him as claimed. by the
  secured creditors or as determined by the Debts B
  Recovery Tribunal, whichever is less. Obviously, where
  the amounf ot uebt is yet to be determined by the Debt$
  Recovery Tribunal, the borrower, while preferring appeal,
  would be liable to deposit fifty per cent of the debt due
  from him as claimed by the secured creditors. Therefore, c
  the condition of pre-deposit being mandatory, a complete
  waiver of deposit by the appellant was beyond the
  provisions of the Act, as is evident from the second and
  third proviso to the said Section. At best, the Appellate
  Tribunal could have, after recording the reasons, reduced 0
  the amount of deposit of fifty per cent to an amount not
  less than twenty five per cent of the debt referred to in
  the second proviso. The order of the Appellate Tribunal,
  entertaining appellant's appeal without insisting on pre"'
  deposit was clearly unsustainable and, therefore, the
  decision of the High Court in setting aside the same E
  cannot be flawed. In the notice issued to the appellant
  under Section 13(2) of the Act, the debts due from the
  appellant as on 25th September, 2006 was Rs. 52,42,474/
  -. Since in the instant case, the Debts Recovery Tribunal
  had not determined the debt due, the appellant is directed F
  to deposit with the Appellate Tribunal an amount of Rs.
  15 lakhs within a period of four weeks. Thereafter, his
  appeal shall be en·tertained and decided on merits. In
  case of failure of the appellant to make the said deposit ·
 within the time granted, his appeal before the Appellate G
 Tribunal would stand dismissed and it would be open to
 the respondent bank to take further steps in the matter
  in accordance with law. [Paras 9,10, 11] (1031-D-H; 1032-
 A-D]
                                                              H
    1028   SUPREME COURT REPORTS                 [2011] 3 S.C.R.

A       CIVIL APPELLATE JURISIDICTION : Civil Appeal No.
    2681 of 2011.                  ·

        From the Judgment & Order dated 7.12.2010 of the High
    Court at Calcutta in C.O.No. 3608 of 2009.
B       Ranjan Mukherjee, S. Bhowmick, S.C. Ghosh for the
    Appellant.

        Partha Sil for the Respondents.

C       The following Order of the Court was delivered

                            ORDER

        1. Leave granted.

0      2. This appeal by the borrower is directed against
  judgment dated 7th December, 2010 delivered by the High
  Court of Calcutta in C.O. No.3608 of 2009. By the impugned
  judgment, the High Court has set aside the order passed by
  the Debts Recovery Appellate Tribunal, Kolkata (for short, "the
  Appellate Tribunal") in Appeal No.35 of 2009, whereby the
E Appellate Tribunal, while allowing the application filed by the
  appellant under Section 18(1) of the Securitisation and
  Reconstruction of Financial Assets and Enforcement of Security
  Interest Act, 2002 (for short, "the Act") had exempted the
  appellant from making any deposit in terms of second proviso
F to Section 18 of the Act before entertaining the appeal against
  the order passed by the Debts Recovery Tribunal.
       3. With the consent of learned counsel for the appellant as
  also the respondent-bank, ~hich is on caveat, we have heard
G the matter finally at the motion hearing stage itself. Since the
  issue canvassed before us is a pure question of law, we deem
  it unnecessary to state the facts giving rise to this appeal.
     4. Assailing the judgment, Mr. Ranjan Mukherjee has
H submitted that since the Debts Recovery Tribunal had not
NARAYAN CHANDRA GHOSH v. UCO BANK & ORS.1029


entertained the appeal preferred by the appellant under Section A
17 of the Act on a technical ground and the quantum of amount ·
due from the appellant had not been determined, the Appellate
Tribunal could not saddle the appellant with any liability of pre~
deposit under Section 18 of the Act. It is thus,. asserted that the
Appellate Tribunal was justified in entertaining the appeal B
without insisting on any deposit in terms of Section 18 of the
Act.
     5. Per contra, learned counsel for the bank, while
supporting the judgment of the· High Court has submitted that       C
the Appellate Tribunal had failed to appreciate that the deposit
of an amount in terms of Section 18 of the Act is a condition
precedent for entertainment of the appeal. According to the
leamed counsel, the language of Section 18(1) of the Act being
clear and unambiguous, the order passed by. the Appellate           D
Tribunal was clearly unsustainable.     ·                  ·

    ·6. Thus; the short question for consideration is whether the
Appellate Tribunal has the jurisdiction to exempt the person,
preferring an appeal under Section 18 of the Act from making
any pre-depositin terms of the said provision?                      E
     7. Section 18, which provides for appeal to the Appellate
Tribunal, reads as under:

    "18. Appeal to Appellate Tribuna/.-(1) Any person
    aggrieved, by any order made by the Debts Recovery F
    Tribunal under section 17, may prefer an appeal along with
    such fee, as may be prescribed to an Appellate Tribunal .
    within thirty days from the date of receipt of the order of
    Debts Recovery Tribunal.
                            ·.:.'                                   G
    Provided that different fees may be prescribed for filing an
    appeal by the borrower or by the person other than the
    borrower:
    Provided further that no appeal shall be entertained unless
                                                                    H
    1030     SUPREME COURT REPORTS                           [2011) 3 S.C.R.

A       the borrower has deposited with the Appellate Tribunal fifty
        per cent of the amount of debt due from him, as claimed
        by the secured creditors or determined by the Debts
        Recovery Tribunal, whichever is less:

B       Provided also that the Appellate Tribunal may, for the
        reasons to be recorded in writing, reduce the amount to
        not less than twenty-five per cent of debt referred to in the
        second proviso.

        (2) .............................. ····· ...... ."
c
        8. Section 18(1) of the Act confers a statutory right on a
  person aggrieved by any order made by the Debts Recovery
  Tribunal under Section 17 of the Act to prefer an appeal to the
  Appellate Tribunal. However, the right conferred under Section
D 18(1) is subject to the condition laid down in the second proviso
  thereto. The second proviso postulates that no appeal shall be
  entertained unless the borrower has deposited with the
  Appellate Tribunal fifty per cent of the amount of debt due from
  him, as claimed by the secured creditors or determined by the
E Debts Recovery Tribunal, whichever is less. However, under the
  third proviso to the sub-section, the Appellate Tribunal has the
  power to reduce the amount, for the reasons to be recorded in
  writing, to not less than twenty-fi'!e per cent of the debt, referred
  to in the second proviso. Thus, there is an absolute bar to
  entertainment of an appeal under Section 18 of the Act unless
F the condition precedent, as stipulated, is fulfilled. Unless the
  borrower makes, with the Appellate Tribunal, a pre- deposit of
  fifty per cent of the debt due from him or determined, an appeal
  under the said provision cannot be entertained by the Appellate
  Tribunal. The language of the said proviso is clear and admits
G of no ambiguity. It is well-settled that when a Statute confers a
  right of appeal, while granting the right, the Legislature can
  impose conditions for the exercise of such right, so long as the
  conditions are not so onerous as to amount to unreasonable
  restrictions, rendering the right almost illusory. Bearing in mind
H
NARAYAN CHANDRA GHOSH v. UCO BANK & ORS.1031


the object of the Act; the conditions hedged in the said proviso       A
cannot be said to be onerous. Thus, we hold that the
requirement of pre-deposit under sub~section (1) of Section 18
of the Act is mandatory and there is no reason whatsoever for
not giving full effect to the provisions contained in Section 18
of the Act. In that view of the matter, no court, much less the        B
Appellate Tribunal, a creature of the Act itself, can refuse to give
full effect to the provisions of the Statute. We have no hesitation
in holding that deposit under·the second proviso to Section
18(1) of the Act being a condition precedent for preferring an
appeal under the said Section, the Appellate Tribunal had erred        c
in law in entertaining the appeal without directing the appellant
to comply with the said mandatory requirement.

      9. The argument of learned counsel for the appellant that
as the amount of debt due had not been determined by the
Debts Recovery Tribunal, appeal could be entertained by the            D
Appellate Tribunal without insisting on pre-deposit, is equally
fallacious. Under the second proviso to sub-section (1) of
Section 18 of the Act the amount of fifty per cent, which is
required.to be deposited by the borrower, is computed either
with reference to the debt due from him as claimed by the              E
secured creditors or as determined by the Debts Recovery
Tribunal, whichever is less. Obviously, where the amount of debt
is yet to be determined by the Debts Recovery Tribunal, the
borrower, while preferring appeal, would be liable to deposit
fifty per cent of the debt due from him as claimed by the              F
secured creditors. Therefore, the condition of pre-deposit being
mandatory, a complete waiver of deposit by the appellant with
the Appellate Tribunal, was beyond the provisions of the Act,
as is evident from the second and third proviso to the said
Section. At best, the Appellate Tribunal could have, after             G
recording the reasons, reduced the amount of deposit of fifty
per cent to an amount hot less than twenty five per cent of the
debt referred to in the second proviso. We are convinced that
the order of the Appellate Tribunal, entertaining appellant's
appeal without insisting on pre-deposit was clearly                    H
    1032    SUPREME COURT REPORTS                 [2011) 3·S.C.R.


A unsustainable and, therefore, the decision of the High Court in
  setting aside the same cannot be flawed.
       10. It is stated before us that in the notice issued to the
  appellant under Section 13(2) of the Act, the debt due from the
  appellant as on 25th September, 2006 was Rs. 52,42,474/-.
8
  Since in the present case Debts Recovery Tribunal had not
  determined the debt due, we direct that on appellant's
  depositing with the Appellate Tribunal an amount of Rs. 15 lakhs
  within a period of four weeks from today, his appeal shall be
  entertained and decided on merits. We direct that till the
C Appellate Tribunal takes a final decision in the appeal, the bank
  shall maintain status quo in respect of the property of which
  physical possession is stated to have been taken by it.
       11. Needles.s to add that if the appellant fails to make the
D said deposit within the time granted, his appeal before the
  Appellate Trib•Jnal shall stand dismissed and it will be open to
  the respondent bank to take further steps in the matter in
  accordance with law.
E        12. The appeal stands disposed of with no order as to
    costs.
    D.G.                                     Appeal disposed of.