AI Structured Summary
Not yet generated for this judgment
Judgment
Ashok Menon, Chairperson
The Appellants are in appeal impugning the order dated 28.12.2023 in Interlocutory Application (I.A.) No. 2732 of 2023 in Securitisation Application (S.A.) No. 397 of 2023 on the files of the Debts Recovery Tribunal-II, Mumbai (D.R.T.) whereby the Ld. Presiding Officer declined to grant any protection to Appellants from being dispossessed of the secured asset on 28.12.2023 and also did not grant any relief concerning the dispossession of the property till the disposal of the S.A. It is pertinent to note that on 06.11.2023 the Appellants had consented to regularize the account by making a payment of ₹68.77 lakhs which was then the overdue amount by making an outright payment of ₹35 lakhs on that date and agreeing to pay the balance amount of ₹33.77 lakhs on or before 07.12.2023. It was also agreed that thereafter, the Appellants would be paying the EMIs on time without any default. Due to compelling circumstances, the Appellants were not able to pay the second instalment of ₹33.77 lakhs on time and therefore, filed I.A. No. 2732 of 2023 for an extension of time and to get the taking over possession of the property deferred, which was declined by the Ld. Presiding Officer. The Appellants are aggrieved and hence, in appeal. The Appellants would contend that it was because of a certain compelling reason that they could not arrange the funds on time but on the date of filing of an application for extension, they were ready to pay the balance amount which was due but still, the D.R.T. was not inclined to grant an extension of time and the Respondent had refused to accept that amount. The extension application was still pending but the application for stalling the taking over the possession of the property was declined.
The Demand notice under Sec. 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, for short) demands a sum of ₹1,78,51,246.15 as of 16.09.2021. The Appellants will have to comply with the mandatory provisions for making a pre-deposit under Sec. 18(1) of the SARFAESI Act before the appeal being entertained.
The Ld. Counsel for the Respondent bank submits that as of this date, there is an outstanding due of ₹1,63,42,845.74. The Appellants are aggrieved by the order of the D.R.T. declining to grant any protection concerning the possession of secured assets. The application for an extension of time to regularize the account is still pending consideration. The Appellants have challenged the securitisation application on various grounds but at the same time the Appellants have also offered to regularize the account by paying the amount which is demanded and therefore, literally, the challenge to the Sarfaesi measures have been given up by the Appellant and therefore, there is no any prima facie case and the Appellants have not produced any evidence to indicate that they are under financial strain. Hence, the Appellants may not be entitled to any concession by invoking the mandatory provisions under the third proviso to Sec. 18(1) of the SARFAESI Act to get the pre-deposit amount reduced. The outstanding amount as of date would be ₹1,63,42,875.74. The Appellants are, therefore, directed to deposit a sum of ₹80 lakhs as pre-deposit. Towards the said amount, the Ld. Counsel appearing for the Appellants submits a demand draft of ₹30 lakhs. The balance of ₹50 lakhs shall be paid in two equal instalments within a gap of two weeks each as mentioned hereunder.
Numbers of Instalments
Payment on or before
1st Instalment of ₹25 lakhs
07.03.2024
2nd Instalment of ₹25 lakhs
21.03.2024
Default in payment of any of the instalments entails dismissing the appeal without any further reference to this Tribunal.
Given the deposit of ₹30 lakhs today, the Sarfaesi measures about taking over possession of the secured assets scheduled on the 23rd instant shall stand deferred till the next date of hearing.
The amount shall be deposited as 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 after that to be renewed periodically.
With these observations, the I.A. is disposed of. The Respondents are at liberty to file a reply in the Appeal with an advance copy to the other side.
Post on 08.03.2024 for reporting compliance regarding the first instalment.