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Judgment
Ashok Menon, Chairperson
The matter is taken up for hearing by way of a praecipe filed by the Appellants for seeking urgent relief.
The Appellants are in appeal impugning the order dated 28.02.2024 in Securitisation Application (S.A.) No. 392 of 2023 on the files of the Debts Recovery Tribunal, Aurangabad (D.R.T.) whereby the Interlocutory Application (I.A.) filed by the Appellants for stay and protection concerning the dispossession of the secured asset by Respondent Financial Institution (Respondent FI) was declined to be stalled and a notice was issued to the Respondent. The Appellants submit that the possession is intended to be taken today and the notice to that effect has been received. Hence, the S.A. would become infructuous in case protection is not granted.
The records produced by the Appellants would indicate that the Appellants had earlier filed an S.A. at Diary No. 1106 of 2022. Why it was on the diary number is not known. However, the Appellants had expressed their intention to deposit a sum of₹2.50 lakhs and the Counsel appearing for the Respondent FI indicated that a sum of ₹35 lakhs was due on the account of two financial facilities and in case the Appellants were willing to deposit a total sum of ₹7.50 lakhs, the taking over of possession will be deferred. Recording the statement, the Ld. Presiding Officer granted a conditional stay on 22.05.2023 and thereafter another direction was given on 06.09.2023 to pay a further amount of ₹10 lakhs within ten days and in case of default, it was directed that the interim protection would stand vacated. The amount was not paid within the stipulated time as a result of which the stay granted stood vacated. The Appellants filed an application for condonation of delay to pay the amount but it was not considered and the S.A. itself was disposed of granting the liberty to the Appellants to file a fresh S.A. in case of further Sarfaesi measures. Accordingly, the Appellants filed S.A. No.392 of 2023 and sought an injunction which was not granted and therefore, the Appellants are in appeal.
The Respondent FI has been served but none appeared. The Appellants will first have to cross the hurdle of making a pre-deposit contemplated under Sec. 18(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, for short). The Appellants have filed an application for waiver of deposit in which it is contended that the order obtained by the Respondent FI under Sec. 14 of the SARFAESI Act is not sustainable for the reason that the original mortgagor/borrower died on 30.01.2022 and the order was obtained only on 27.05.2022 which is after his death. Therefore, the order passed against a dead man is void ab initio. The Appellants are the legal representatives of the deceased person and have inherited property which is the secured asset. It is pertinent to note that the demand notice under Sec. 13(2) was issued to the predecessor of the Appellants on 08.04.2021 when he was very much alive. There was indeed no further notice of the demand against legal representatives consequent upon the demise of the original mortgagor but it is also relevant to note that there is no evidence regarding the Appellants informing the Respondent FI regarding the death of the original mortgagor. Appellants, therefore, would not have a strong prima facie case that is no plea regarding any financial strain as well. Under the circumstance, the Appellants will have to deposit 50% of the amount which is demanded in the demand notice issued under Sec. 13(2) notice. The demand notice has not been produced but going by the records it is seen that the Respondent FI had admitted that there was an outstanding due of ₹35 lakhs towards which the Appellants had admittedly paid ₹7.5 lakhs inclusive interest amount due would approximate ₹30 lakhs. The Appellants are directed to deposit a sum of ₹15 lakhs as pre-deposit. The Ld. Counsel for the Appellants submits that the Appellants would be paying a sum of ₹4 lakhs by way of RTGS by noon today. The balance of the ₹11 lakhs shall be paid in two instalments within a gap of two weeks each as stated hereunder.
Number of Instalments
Payment on or before
1st Instalment of ₹5 lakhs
19.02.2024
2nd Instalment of ₹6 lakhs
02.04.2024
Given the payment agreed to be effected today, on condition that the payment is coming on time, the possession intended to be taken shall stand deferred till the next date of hearing.
Default in payment of any of the instalments entails in dismissal of the appeal without any further reference to this Tribunal.
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 Respondent FI is at liberty to file a reply in the Appeal with an advance copy to the other side.
Post on 20.03.2024 for reporting compliance regarding payment.