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Judgment
Ashok Menon, Chairperson
The matter is taken up for hearing by way of a praecipe filed by Appellants for seeking urgent relief.
The Appellants are in appeal impugning the order dated 21.02.2024 in I.A. No. 369/2024 in S.A. No. 53/2024 on the files of Debts Recovery Tribunal-II, Mumbai (D.R.T) wherein the Appellants were not given any protection against the Sarfaesi measures initiated by the Respondent Financial Institution under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (SARFAESI Act, for short). The Appellants are aggrieved and hence, in appeal.
The only challenge that was raised u/s. 17 in the S.A. by the Appellants was that the prepayment charges included in the demand notice dated 15.11.2022 could not have been included and therefore, the demand notice is faulty, which would invalidate the entire Sarfaesi measures. The Ld. Presiding Officer has not entered into any finding regarding the said challenge whether prima facie or otherwise. The rejection of the application was based on the finding that the Applicants were not showing any readiness or willingness to deposit any amount of the admitted liability. The prayer for interlocutory injunctions is based on other considerations and not on meeting the demand of the Respondent, which is challenged and is subject to determination by the D.R.T.
To entertain this appeal the Appellants will first have to cross the hurdle of making a pre-deposit contemplated u/s. 18(1) of the SARFAESI Act. The demand notice demands a sum of ₹ 10,31,66,937/-. Since the Sarfaesi proceedings are still at the stage of Sec. 13 (4), the aforesaid amount will have to be taken as a threshold amount for making the pre-deposit. The Appellants have pleaded that they are under financial strain but there are no documents in support of the pleading. Under the circumstances, this Tribunal cannot invoke the discretion of indulgence of reducing the amount to the minimum of 25%. The Appellants are, therefore, directed to deposit a sum of ₹ 3.5 crores as pre-deposit for entertaining the appeal.
The Ld. Counsel appearing for the Appellant submits that the demand draft for ₹ 50 lakhs is being submitted today across the Bar. The balance amount of ₹ 3 crores would be deposited in two instalments within a gap of two weeks each as stated hereunder.
Numbers of Instalments
Payment on or before
1st Instalment ₹ 2 Crores
08.03.2024
2nd Instalment ₹ 1 Crores
22.03.2024
Given the deposit made today, the Sarfaesi measures intended to be taken against the secured assets shall stand deferred till the next date of hearing. 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 11.03.2024 for reporting compliance regarding the payment of 1st instalment.