Supreme Court – Daily Orders
M/S Royal Traders vs Asset Reconstruction Company India Ltd on 14 July, 2025
M.A.No.1060/2025 in SLP(C) No. 2150/2025
ITEM NO.26 COURT NO.9 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Miscellaneous Application No. 1060/2025 in SLP(C) No. 2150/2025
[Arising out of impugned final judgment and order dated 22-01-2025
in SLP(C) No. No. 2150/2025 passed by the Supreme Court of India]
M/S ROYAL TRADERS Petitioner(s)
VERSUS
ASSET RECONSTRUCTION COMPANY
INDIA LTD Respondent(s)/Applicant
FOR ADMISSION
IA No. 119720/2025 - APPROPRIATE ORDERS/DIRECTIONS
Date : 14-07-2025 This matter was called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE J.B. PARDIWALA
HON'BLE MR. JUSTICE R. MAHADEVAN
For Petitioner(s) :Mr. Jamshed P. Cama, Sr. Adv.
Mr. Avneesh Arputham, AOR
Ms. Megha S. Gupta, Adv.
Mr. Vipul Agrawal, Adv.
Ms. Pranjali Khemnar, Adv.
Mr. Arjun Kant, Adv.
Mr. Siddharth Sijoria, Adv.
Mr. Sanjay Thakur, Adv.
Ms. Priyanka Dubey, Adv.
Mr. Sooraj Sharma, Adv.
Mr. Gunjan Joshi, Adv.
For Respondent(s) : Mr. Rajiv Shakdhar, Sr.Adv.
Mr. Bishwajeet Dubey, Adv.
Ms. Radhika Bishwajeet Dubey, Adv.
Signature Not Verified
Digitally signed by
CHANDRESH
Date: 2025.07.15
18:38:13 IST
Reason:
1
M.A.No.1060/2025 in SLP(C) No. 2150/2025
Mr. Jagdish Solanki, Adv.
Mr. Karan Khetani, Adv.
Mr. Jonathan Ivan Rajan, Adv.
Mr. Vivek Sharma, Adv.
Mr. Niteen Kumar Sinha, Adv.
UPON hearing the counsel the Court made the following
O R D E R
1. Our Order dated 22-01-2025 reads thus:-
“1. Delay condoned.
2. Exemption Application is allowed.
3.This petition arises from the Judgment and Order passed by
the High Court of Judicature at Bombay dated 19-12-2024 in
Writ Petition L. No.18722/2024, by which the High Court
rejected the Writ Petition filed by the petitioner – herein
seeking waiver of 50% of pre-deposit in terms of Section 18
of the Securitization and Reconstruction of Financial Assets
and Enforcement of Security Interest Act (SARFAESI), as a
consequence the Statutory Appeal filed by the petitioner –
herein against the order passed by the DRT, Mumbai came to
be dismissed.
4.We have heard Mr. Rajiv Shakdhar, the learned Senior
counsel appearing for the petitioner and Mr. Navin Pahwa,
the learned Senior counsel appearing for the respondent.
5.At this stage, it may not be out of place to state that
the Asset Reconstruction Company India Ltd. also preferred
petitions before the High Court of Bombay and they succeeded
before the High Court. The High Court disposed of all the
Writ Petitions, i.e., one filed by the petitioner – herein
and the other petitions filed by the ARCIL by a common
Judgment.
6.The petitioner – herein is the original borrower. ARCIL is
the assignee of the debt.
7.According to ARCIL, the amount due and payable by the
petitioner – herein as on date and as determined by the High
Court is Rs.138 Crore.
8.The petitioner – herein has no idea as to what is the
exact amount due and payable by them as there are
conflicting findings on this issue.
9.Mr. Shakdhar would submit that the amount due and payable
as stated in the Notice issued under Section 13 (2) of the
Act is Rs.132 Crore. In fact, there are three demand notices
under the said Section because of three different loan
transactions.
10. The DRAT in its impugned order has observed thus:-
2
M.A.No.1060/2025 in SLP(C) No. 2150/2025
“10. After having heard Mr Rohit Gupta and Mr Charles
D’Souza, the Ld. Counsel for the appellant, and Mr
Nitin Thakkar, the Ld. Senior Counsel for respondent
No. 1, I find that there are certain discrepancies
concerning the amount demanded in the demand notices
and the other documents. The respondent had claimed
that the amount due on six different accounts
concerning the appellant and the sister concerns would
add up to ₹142,17,39,819.41. However, the breakups are
not available. To get a waiver of 25% of the pre-
deposit amount, the appellant would have to satisfy the
existence of a prima facie case and also establish
financial strain in paying 50% of the amount due for
entertaining the appeal. The appellant has created some
doubts regarding the validity of the claim put forth by
the respondent which would, at best, be an arguable
case and cannot be said to be a strong prima facie case
in favour of the Appellant. The fact regarding the
appellant not challenging the measures and thus waiving
its right is also of concern. However, it is admitted
that the OTS proposal was not accepted. There is no
evidence regarding any financial strain. For the
payment of pre-deposit, this Tribunal relies on the
demand notices for determining the threshold amount.
11. In I.A. No. 246 of 2024, the amount demanded is
₹20,34,63,530.23. The appellant is directed to deposit
a sum of ₹10 crores as pre-deposit in that appeal. The
said amount shall be paid in two equal instalments of
₹5 crores each within a gap of two weeks each as stated
hereinunder. Number of Instalments Payment on or before
1st Instalment of ₹5.00 crores 18/06/2024 & 2 nd
Instalment of ₹5.00 crores 02/07/2024.
12. Concerning I.A. No. 247 of 2024, the amount
demanded is ₹20,23,05,050.20 and therefore, the
appellant is directed to deposit ₹10 crores as pre-
deposit in that appeal. The said amount shall be paid
in two equal instalments of ₹5 crores each within a gap
of two weeks each as stated hereinunder:-.
Number of Instalments Payment on or before
1st Instalment of ₹5.00 crores 18/06/2024
2nd Instalment of ₹5.00 crores 02/07/2024
13. As regards I.A. No. 248 of 2024, the amount
demanded is ₹32,58,68,775.79 and hence, the appellant
is directed to deposit a sum of ₹16 crores as pre-
deposit for entertaining that appeal. The said amount
shall be paid in two equal instalments of ₹8 crores
each within a gap of two weeks each as stated
hereinunder:-
3
M.A.No.1060/2025 in SLP(C) No. 2150/2025
Number of Instalments Payment on or before
1st Instalment of ₹8.00 crores 18/06/2024
2nd Instalment of ₹8.00 crores 02/07/2024
11. The High Court in its impugned has observed thus:-
“53. Mr. Thakker handed in a calculation sheet stating
that the dues as of 10 May 2024 would be approximately
Rs.130.42 crores. Ms. Anand disputed this. Ms. Anand
handed in a without prejudice calculation sheet under
which the dues would be Rs.103.86 crores as of 08 May
2021. The relevant date in this case would be 01 April
2024, i.e., the date the borrower filed the appeal before
the DRAT. Therefore, this figure of Rs.103.86 crores
would be considerably enhanced given the interest for the
last three years. Mr Thakker disputed this calculation
sheet.
54. However, even if we go by the calculation sheet
submitted by Ms. Anand, without for a moment accepting
that the same reflects the position of debt due by the
borrower correctly, the borrower will still have to make
a pre-deposit of Rs.51.93 crores or Rs.52 crores before
the DRAT to have its appeal entertained. This amount
would be further enhanced because the appeal was
instituted in April 2024.
55. However, now that the DRAT has already dismissed the
borrower’s appeal, there is no point in modifying the
impugned order and directing the borrower to deposit 50%
of the debt due by taking cognisance of the statutory
definitions and the decisions of this Court in Sony Mony
Developers Pvt. Ltd (supra) and MRB Roaconst. Pvt. Ltd.
(supra). If the appeals were pending, we would surely
have modified the impugned order and directed a deposit
of an additional amount as a pre-condition for the
entertainability of the appeal.
56. Though it was not argued before us, we considered
whether we should order the restoration of the borrower’s
appeal and grant the borrower an opportunity to deposit
Rs.52 crores initially pending determination of the
amount due as of the date of filing of the appeal (which
would be more than Rs.52 crores). However, upon due
consideration of the material on record, we think such a
course of action would only prolong the proceedings.
57. The borrower does not appear to be interested in
making any pre-deposit, and the entire endeavour is to
buy some time, which makes it difficult for ARCL to
recover its dues. Therefore, even after considering the
Rs.10 Crore deposit made by the borrower in this court,
we think that no indulgence should be granted to the
4
M.A.No.1060/2025 in SLP(C) No. 2150/2025
borrower, and the loan recovery should not be protracted
any further. This deposit must be considered in the
context of the dues, which, even on a conservative
estimate, is over Rs 110 crores.
58. The jurisdiction under Articles 226 and 227 of the
Constitution of India is discretionary and equitable.
Such extraordinary jurisdiction cannot be exercised to
assist the borrower who has no intention of
repaying/clearing even the admitted debt dues. This
borrower appears to be interested in taking
disproportionate advantage of some typographical error in
one of the documents (loan assignment document). In any
event, now that we have upheld the impugned order to the
extent it had dismissed the borrower’s application for
waiver, there is no case made out to interfere with the
DRAT’s order dismissing the appeal for non-compliance
with the directions for pre-deposit. Ms Anand had
submitted that dismissing the appeal or the notices for
taking possession of the borrower’s properties were only
consequential to the order impugned in this petition.
59. For all the above reasons, we dismiss the Writ
Petition (L) No. 18722 of 2024 and dispose of the
remaining three Writ Petitions in terms of the
observations made above. The Rule is discharged in Writ
Petition (L) No.18722 of 2024 and disposed of in the
remaining three Writ Petitions.
60. The interim order, if any, is vacated. Interim
Applications, if any, do not survive and are disposed
of.”
12. Mr. Shakdhar, the learned Senior counsel made a
fervent appeal to this Court that his client may be given
one opportunity to put forward their case on merits before
the DRAT. According to Mr. Shakdhar, his plea of waiver of
50% deposit was wrongly rejected by the DRAT.
13. Upon instructions, Mr. Shakdhar makes a statement
that his client is ready and willing to deposit Rs.36 Crore
as a pre-deposit before the DRAT for the purpose of getting
the appeal heard on merits.
14. He submitted that Rs.10 Crore has been deposited
with the ARCIL and the same can be adjusted in the amount of
Rs.36 Crore and the balance amount of Rs.26 Crore will be
deposited by his client within a period of three weeks from
today with the DRAT. (See order of the Bombay High Court
passed in Writ Petition No.19722/2024 dated 10.7.2024).
15. He would submit that on deposit of Rs.36 Crore, the
DRAT may be directed to hear the appeal on merits and take a
final call.
5
M.A.No.1060/2025 in SLP(C) No. 2150/2025
16. Mr. Pahwa, the learned Senior counsel, on the other
hand, vehemently opposed the request made by the learned
Senior counsel on behalf of the petitioner.
17. According to him, the principal amount even going by
what has been said by the High Court is about Rs.130 Crore.
If 50% of that amount is to be determined, it comes to
around Rs.65 Crore.
18. Therefore, according to Mr. Pahwa, the petitioner
should be asked to deposit Rs.65 Crore and not Rs.36 Crore.
19. Having heard the learned counsel appearing for the
parties and having gone through the materials on record, we
are of the view that there is no clarity as regards the
actual amount due and payable by the petitioner as on date,
more particularly, the principal amount. Different amounts
are figuring on record. It is difficult for us to determine
what is due and payable. Of course, the High Court has said
something in this regard.
20. In the overall view of the matter, we are inclined
to grant one opportunity to the petitioner to make good his
case on merits before the DRAT and for that purpose, we
direct the petitioner to deposit Rs.36 Crore with an
understanding that it shall be open for the ARCIL to point
out to the DRAT the exact amount due and payable on the
basis of which the amount of 50% can be determined.
21. At the same time, it will also be open for the
petitioner – herein to point out the DRAT that the amount
due and payable is not as demanded by the ARCIL but it is
otherwise.
22. It will also be open for the petitioner to pray
before the DRAT that they may be given benefit of the third
proviso to Section 18 of the Act. If the petitioner is able
to make out a case for the purpose of invoking the third
proviso, the DRAT will look into it and take an appropriate
call.
23. We dispose of this Special Leave Petition with a
direction to the petitioner to deposit the amount of Rs.36
Crore with DRAT, Mumbai within a period of three weeks from
today. The amount of Rs.10 Crore already lying with the
ARCIL shall stand adjusted accordingly to make it Rs.36
Crore.
24. Upon deposit of the amount of Rs.36 Crore, the DRAT
shall hear both the parties on the questions which we have
discussed and talked about in our order and take an
appropriate decision within a period of four weeks
thereafter, without being influenced in any manner by what
has been observed by the High Court in its impugned order.
25. With the aforesaid, this petition stands disposed
of.
6
M.A.No.1060/2025 in SLP(C) No. 2150/2025
26. It goes without saying that in view of this
arrangement, the ARCIL shall not proceed to take any
coercive steps.
27. Pending applications, if any, shall also stand
disposed of.”
2. The Asset Reconstruction Company India Limited is here before
us with a miscellaneous application seeking appropriate directions
in context with the order passed by us referred to above.
3. The learned counsel appearing for the applicant has many
grievances to redress as regards the conduct of the original
petitioner namely M/s. Royal Traders.
4. Well, the applicant may be justified in his own way in
redressing the grievances, however, we take notice of the fact that
as directed by this Court the amount of Rs.26 crore came to be
deposited within a period of three weeks as directed by this Court.
However, it seems that the borrower took some time to get the
appeals restored before the DRAT.
5. According to the learned counsel, the borrower should have
acted promptly and got the appeals restored before the DRAT for the
purpose of hearing.
6. The appeals shall be deemed to have stood restored before the
DRAT. We are informed that the next date fixed by the DRAT is
28.07.2025.
7 We make it clear that in any circumstances, the DRAT shall
7
M.A.No.1060/2025 in SLP(C) No. 2150/2025
proceed to hear the parties on 28.07.2025. No adjournment shall be
granted. Once the hearing is concluded the DRAT shall proceed to
pass appropriate orders in accordance with law within a period of
two weeks thereafter.
8. The appeals shall be decided by the DRAT in accordance with our
order dated 22.01.2025.
9. Let the miscellaneous application come up for before this Court
to report compliance of our directions.
10. List after four weeks.
(CHANDRESH) (POOJA SHARMA)
ASTT. REGISTRAR-cum-PS COURT MASTER (NSH)
8
[ad_1]
Source link