Case Note & Summary
The Supreme Court of India disposed of a civil appeal arising from a special leave petition, which challenged the High Court of Rajasthan's dismissal of a writ petition. The writ petition had confirmed the order of the Debts Recovery Appellate Tribunal (DRAT), Delhi, which maintained the attachment of shares held by appellant no.1, XLO India Limited, during the pendency of Appeal No.1/2020 before the Debts Recovery Tribunal (DRT), Jaipur. The dispute centered on a debt of approximately Rs.29 crores claimed by respondent no.1, International Asset Reconstruction Company Private Limited, which was contested by the appellants, who argued that the amount had been paid and the issue pertained to discharge of debt in execution proceedings. After hearing arguments from both sides, the court noted a broad consensus between the parties and disposed of the appeal with specific directions. The court ordered appellant no.1 to deposit an additional Rs.5 crores with the DRT, Jaipur, within four weeks, permitted respondent no.1 to withdraw this amount along with a pre-deposit of Rs.1.53 crores with interest and Rs.25 lakhs lying with the Recovery Officer, all without prejudice to the parties' rights in the pending appeal. It directed the DRT to finally decide Appeal No.1/2020 within eight weeks, continued the attachment of shares until the appeal's disposal, stayed further recovery proceedings, and disposed of a related appeal before the DRAT challenging the pre-deposit order. The court kept questions of law open for consideration in appropriate cases.
Headnote
A) Debt Recovery Law - Interim Relief and Attachment - Attachment of Shares During Pendency of Appeal - Recovery of Debts and Bankruptcy Act, 1993, Section 25 - Appellants challenged dismissal of writ petition confirming DRAT order maintaining attachment of shares - Supreme Court disposed appeal based on consensus, directing continuation of attachment till final disposal of appeal and staying further recovery proceedings - Held that attachment order confirmed by DRAT to continue and further recovery proceedings stayed pending appeal disposal (Paras 3, 8, 9). B) Debt Recovery Law - Pre-Deposit and Withdrawal - Conditions for Deposit and Withdrawal Pending Appeal - Recovery of Debts and Bankruptcy Act, 1993 - Appellants to deposit Rs.5 crores within four weeks, respondent permitted to withdraw this amount along with pre-deposit of Rs.1.53 crores with interest and Rs.25 lakhs lying with Recovery Officer - Withdrawal without prejudice to rights in pending appeal and subject to ultimate outcome - Held that deposit and withdrawal permitted as per agreed terms (Paras 8, 9). C) Debt Recovery Law - Disposal of Appeal - Timely Disposal of Pending Appeal - Recovery of Debts and Bankruptcy Act, 1993 - Appeal No.1/2020 pending before DRT, Jaipur - Supreme Court directed DRT to finally decide and dispose of appeal within eight weeks - Held that DRT directed to decide appeal on merits within stipulated time (Paras 8, 9). D) Debt Recovery Law - Procedural Disposal - Disposal of Related Appeal - Recovery of Debts and Bankruptcy Act, 1993 - Respondent's appeal before DRAT challenging order of pre-deposit of Rs.1.53 crores - Supreme Court disposed of said appeal in view of the order - Held that appeal before DRAT stands disposed of (Para 9).
Issue of Consideration
Whether to grant interim relief and set conditions for deposit and withdrawal of amounts pending disposal of the appeal before the Debts Recovery Tribunal
Final Decision
Appeal disposed of with directions: appellant no.1 to deposit Rs.5 crores within four weeks; respondent no.1 permitted to withdraw Rs.5 crores, Rs.1.53 crores with interest, and Rs.25 lakhs; attachment of shares continued till final disposal of Appeal No.1/2020; further recovery proceedings stayed; DRT directed to decide Appeal No.1/2020 within eight weeks; related appeal before DRAT disposed of; questions of law kept open
Law Points
- Interim relief in debt recovery proceedings
- attachment of shares during pendency of appeal
- pre-deposit and withdrawal conditions
- stay of further recovery proceedings pending disposal of appeal
- disposal of appeal based on consensus between parties
