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Judgment
Ashok Menon, Chairperson
The Appellants are in appeal impugning the order dated 02.02.2023 in Interlocutory Application (I.A.) No. 230 of 2023 in Securitisation Application (S.A.) No. 124 of 2022 on the files of the Debts Recovery Tribunal, Nagpur (D.R.T.) whereby the Ld. Presiding Officer declined to grant any protection to the Appellant against the Sarfaesi measures initiated by the respondent bank to take over possession of the secured asset armed with an order under Sec. 14 of the Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’, for short) passed by the Chief Judicial Magistrate (CJM). The Appellants had filed the S.A. challenging the Sarfaesi measures which includes taking over the symbolic possession of the secured asset under Sec. 13(4) of the SARFAESI Act and thereafter they also applied for amendment of the S.A. incorporated challenge to the order under Sec. 14 of the SARFAESI Act. The amendment application filed as I.A. No. 2147/2022 was allowed but it is not clear whether the amendment was carried out because the copy of the application in the S.A. produced by the Appellants does not indicate in carrying out the amendment.
It is pertinent to note that the Appellants had paid ₹68,55,000/-towards the debt amounting to ₹2,56,09,847.36 demanded as per the demand notice under Sec.13(2) and had undertaken to settle the rest of the loan amount within three months. It is recorded in the order dated 06.12.2022 by the Ld. Presiding Officer that the Appellants had undertaken to deposit the entire balance amount in three instalments. As on the date of that order, there was an outstanding dues of ₹3,11,30,592.44. On payment of the aforesaid amount, the Ld. Presiding Officer directed the status quo to be maintained. After that, the Applicants further sought an extension of the status-quo order by filing I.A. No. 230 of 2023 stating that the account has been regularised and therefore, there should be a stay of the Sarfaesi measures. The Ld. Presiding Officer observed that the Applicants did not pay the amount as undertaken and therefore, declined to grant any protection to the Applicants against the Sarfaesi measures. Aggrieved, the Appellants are in appeal.
The Ld. Counsel appearing for the Respondent Bank has vehemently opposed the application in the appeal challenging the impugned order. It is stated that the Appellants are only interested in protracting the matter, and are not earnest about clearing the dues.
The Ld. Counsel for the Appellants submits that after the filing of the appeal, the Appellant had paid ₹60 lakhs to the respondent bank and thus, a total sum of ₹11,28,55,000/- has been paid. According to the Ld. Counsel for the Appellant, the account has become regular but the Ld. Counsel appearing for the respondent bank does not agree to that and submits that as of the date, ₹2.15 crores is due and payable by the Appellants.
The Ld. Counsel appearing for the Appellants submits that the Appellants are under financial strain. They were doing cement business which was wound up, and that, they are entitled to get dues from several persons to whom they had supplied cement. They are not filing the Income Tax Returns for the last three years because their income is nil. The Ld. Counsel appearing for the respondent bank points out that the Appellants have been having residences and that crores of rupees have come into their account and they themselves have paid ₹1,28,55,000/- towards the dues which indicates that they have sufficient source of income which has not been revealed. Therefore, they are not entitled to any indulgence from this Tribunal and the Appellants may be directed to deposit 50% of the amount of debt due from them, submits the Ld. Counsel for the respondent.
After hearing both sides. I find that the Appellants had given an undertaking before the D.R.T. to settle the entire dues within three months, which they failed to comply. Hence, the status-quo order was vacated the Ld. Presiding Officer. In view of the facts that the Appellants have undertaken to pay entire dues, it would amount to a waiver of challenges raised by them to the Sarfaesi measures. As of the date, after the payment of ₹1,28,55,000/- towards the debt, there is still an outstanding amount of ₹2.15 crores due from the Appellants.
Hence, the Appellants are directed to deposit a sum of ₹80 lakhs as pre-deposit. The Ld. Counsel for the Appellant submits that he is submitting a demand draft of ₹12 lakhs towards the pre-deposit and the same shall be received. The balance amount of ₹68 lakhs shall be deposited in three instalments within a gap of two weeks each as mentioned hereunder.
Numbers of Instalments
Payment on or before
1st Instalment of ₹18,00,000/-
17.01.2024
2nd Instalment of ₹25,00,000/-
31.01.2024
3rd Instalment of ₹25,00,000/-
14.02.2024
Default in payment of any of the instalments entails in dismissal of the appeal without any further reference to this Tribunal.
On depositing ₹12 lakhs today, the further proceedings under the SARFAESI Act to take possession of the secured asset shall stand stalled 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 Respondent is at liberty to file a reply in the Appeal with an advance copy to the other side.
Post on 18.01.2024 for reporting compliance regarding the first instalment.