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Judgment
Ashok Menon, Chairperson
The Appellants are in appeal impugning the order dated 12.10.2023 in I.A. No. 3293/2023 in S.A. No. 419/2023 on the files of the Debts Recovery Tribunal-III, Mumbai (D.R.T) declining to grant any protection to the Appellants concerning the Sarfaesi measures initiated by the Respondent Financial Institution about the secured assets under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (“ the SARFAESI Act” for short).
The Appellants had raised several contentions in their challenge to the Sarfaesi measures. It is stated that the demand notice u/s. 13 (2) was not served upon them and thereafter proceedings under Sec. 13 (4) were initiated and an order obtained u/s. 14 from the District Magistrate (DM), Palghar. It is also contended that the notice of dispossession was received from the Circle Officer whereas the District Magistrate by his order had directed the Tahsildar to take possession of the property, and therefore, sub-delegation is not possible. That apart it is also contended that the Appellants have been making earnest attempts to make payments towards the amount demanded and a sum of ₹ 13 lakhs and odd has been paid towards the debt by the Appellants after issuance of the demand notice. The Appellants plead that they have a good prima facie case and that they are under financial strain enabling them to get the mandatory pre-deposit for entertaining the appeal reduced to the minimum of 25 % of the debt due.
The Respondent Financial Institution has vehemently opposed this application stating that the Appellants are not entitled to any reliefs and that the Appellants have only paid ₹ 3,44,000/- towards the debt after the issuance of demand notice. The 13(2) notice directs the Appellant to pay a sum of ₹ 26,18,551/- and therefore, that should be taken as a threshold amount for deposit of mandatory pre-deposit for entertaining the appeal.
The Ld. Counsel appearing for the Appellants has also pointed out that the demand notice is for an amount as of 31.08.2016 whereas the notice is dated 01.08.2016 and therefore the future amount of interest has also been calculated in the inappropriate demand. The Ld. Counsel appearing for the Respondent submits that there is sufficient proof regarding the service of the demand notice on the Appellants and therefore, the contentions that the notice has not been served cannot be heard.
In the impugned order the Ld. Presiding Officer has observed that no evidence regarding service of notice on the Respondents has been produced but despite that, a direction was given to the Appellants to settle the entire debt within 15 days failing which liberty was granted to the Respondent to proceed with the taking over a possession of the property. The Appellants would contend that they are under financial strain the income tax returns of the Appellant No. 1 are produced but no income tax returns of the 2nd Appellant is produced. Taking the entire facts and circumstances into consideration, I find that the Appellants have made an arguable case about service of demand notice u/s. 13 (2) of the SARFAESI Act.
The Appellants are therefore directed to deposit a sum of ₹ 10,00,000/- as pre-deposit. The Ld. Counsel appearing for the Appellants undertakes to produce a demand draft of ₹ 3,00,000/- on or before 15.01.2024 instance. The balance amount of ₹ 7,00,000/-shall be paid within four weeks i.e. on or before 12.02.2024. Failing which, the appeal shall stand dismissed without any further reference to this Tribunal.
On subject to payment of ₹ 3,00,000/- on or before 15. 01.2024, there will be a stay about taking over possession till the next date of hearing.
The amount shall be deposited in the form of a Demand Draft with the Registrar of this Tribunal.
As and when the said amounts are deposited, they shall be invested in term deposits in the name of Registrar, DRAT, Mumbai, with any nationalised bank, initially for 13 months, and thereafter to be renewed periodically.
With these observations, the I.A. is disposed of. The Respondent is at liberty to file a reply in the Appeal with an advance copy to the other side.
Post on 16.01.2024 for reporting compliance concerning the payment.