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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 I.A. No. 792/2023 is an application filed u/s. 18 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (“SARFAESI Act” for short) seeking a waiver of the mandatory pre-deposit required to entertain the appeal.
The Appellants impugn the order dated 25.10.2023 in S.A. No. 232/2022 on the files of the Debts Recovery Tribunal-I, Ahmedabad (D.R.T) wherein the Appellants were not granted any relief of protecting their properties on being taken physical possession of under the provision of Sec. 14 of the SARFAESI Act.
The Appellants contend that they have a prima facie case. They have challenged the Sarfaesi measures right from the classification of the account as Non-Performing Assets (NPA) and have stated that the Respondent had once restructured the debt on 28.02.2021 and thereafter, recalled the restructuring and sent a notice u/s. 13 (2) on 08.04.2022 demanding a sum of ₹ 1,46,33,462/- under two facilities. The Appellants oppose the demand notice and various objections by their letters dated 01.06.2022 to which the Respondent bank sent a reply on 16.06.2022 without considering the objection raised, in the proper perspective, and has therefore violated provisions u/s. 13 (3A) of the SARFAESI Act. The Appellants have also challenged the measure under Sec 13(4) and Sec. 14 of the SARFAESI Act on the grounds of not abiding by the Rules.
The Appellants contend that they are under financial strain. The 2nd Appellant is suffering from depression and has to incur expenses for her treatment. The income tax returns of all the Respondents have been produced together with the bank statements to indicate that they have limited means to pay 50% of the debt due. Hence, the Ld. Counsel appearing for the Appellants pray that they may be given the benefit of reducing the pr-deposit amount to 25% of the amount demanded in the notice, exercising jurisdiction of this Tribunal under the third proviso to Sec.18(1) of the SARFAESI Act.
The Ld. Counsel appearing for the Respondent has vehemently opposed the application stating that the Appellants do not have any prima facie case. The moratorium granted during the pandemic was withdrawn following the default committed by the Appellants in re-payment, and there is no illegality about recalling the restructuring of the loan. It is also pointed out that the other contentions raised by the Appellant regarding the insufficiency of the measures u/s. 13(4) as also the order obtained u/s. 14 are not sustainable.
The Ld. Counsel appearing for the Respondent further points out as per the bank statements, it can be seen that the Appellants have been frequently transacting huge amounts by depositing and withdrawing amounts for payments to others as well as payments towards credit card dues. Which, according to him, would indicate that they are actually under no financial strain.
It is true that the income tax returns do not show that the Appellants have income sufficient to pay the amounts contemplated u/s. 18(1) but they have raised certain contentions regarding the Sarfaesi measures which need to be addressed. The Ld. Presiding Officer has found that the Appellants do not have any prima facie case. However, I think that they should be allowed to be heard on the appeal.
Considering the entire facts and circumstances of this case the Appellants are directed to deposit a sum of ₹ 50,00,000/- as pre-deposit. The Appellants are producing a demand draft of ₹ 10,00,000/- today and the balance of ₹ 40,00,000/- shall be paid in two installments within a gap of three weeks each as stated hereunder.
Numbers of Instalments
Payment on or before
1st Instalment (₹ 20,00,000/-)
28.12.2023
2nd Instalment (₹ 20,00,000/-)
18.01.2024
On payment of the entire amount of pre-deposit, the Appellant shall be entitled to a stay for the further Sarfaesi measures initiated by the Respondent bank. In default, the Appeal shall stand dismissed, without any further reference to this Tribunal.
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 29.12.2023 for reporting compliance concerning the payment.