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Judgment
Ashok Menon, Chairperson
This is an application filed for a waiver of deposit in this appeal challenging the order of dismissal of S.A. No. 64 of 2016 on the files of Debts Recovery Tribunal No. I, Mumbai (D.R.T.) vide order dated 27.03.2018. The Appellants are borrowers and the Applicants in the aforesaid S.A. The grounds taken in challenging the Sarfaesi measures under Sec. 17 of the SARFAESI Act are that the demand notice issued under Sec. 13(2) of the SARFAESI Act has not been served upon the Appellants. The second contention is that the accounting is not proper and there are so many other additions in the account which apparently inflated the account due, and the Applicants are not liable to pay the amount as stated in the account statement. Thirdly, it is contended in the appeal that the findings of the D.R.T. that the S.A. was filed beyond the time of 45 days as contemplated under Sec. 17(1) is not proved, because the Appellants filed the S.A. soon after they received the dispossession notice dated 03.06.2014 and the S.A. was filed on 10.07.2014 well within the stipulated period of 45 days and therefore, it is not beyond time.
Heard both sides. Documents perused. The amount that is demanded in the notice issued under Sec. 13(2) is ₹26,81,193.30 as of 22.07.2011together with interest @14.25%. It is settled law that the Appellants have to pay 50% of the amount that is due, inclusive of the interest till the date of filing the appeal. The Appellants state that they paid ₹8 lacs on 12.06.2014 and another ₹8 lacs on 24.08.2016. Thus total ₹16 lacs has been paid subsequent to receipt of the demand notice, which will have to be accounted for in calculating the pre-deposit.
It is submitted in the reply filed by the Respondent that as of the date of filing of the appeal, there is an outstanding due of ₹50,62,121.32 from the Appellants including the interest payable.
As regards the non-receipt of the notice under Sec. 13(2) of the SARFAESI Act, I am not prima facie convinced that the notice has not been served because the Respondent Bank has produced the document to show that the notice issued by post to the correct address of the Appellants was returned unclaimed. A notice sent to the correct address and unclaimed amounts to refusal of the notice, and therefore, it has to be deemed that the notice has been duly served. Moreover, the notice has also been published in vernacular and English newspapers as is evident from the records. Despite having served notice, as aforesaid, the Appellants did not take any steps to challenge the claim made by the notice. Rather, there is the payment of ₹16 lacs subsequent to the demand notice which indirectly amounts to a waiver of the challenge that could be raised against the notice. It is a settled position of law that statutory rights can be waived by the beneficiary.
Regarding the correctness of the amount, I am not inclined to delve deep into it because now we are only at the stage of waiver of deposit and therefore, by any modest calculation, even if the amount paid by the Appellants is to be accounted for, the amount due would come to around ₹50 lacs and more. Moreover, the Appellants have contended that they are undergoing financial strain because of the loss of business during the period starting from 2011 up to 2016. But the applicants have not produced any evidence to prove that they have been suffering from financial strain. The income tax returns for the relevant period have not been produced and therefore, the pleading that the Appellants cannot be heard to state that they are suffering from financial strain.
The learned counsel for the Appellants submits that they have already paid more than 50% of the amount that has been demanded but that cannot be considered as payment for the purpose of pre-deposit under Sec. 18(1) of the SARFAESI Act. It is after accounting for that payment that the balance amount comes to more than of ₹50 lacs due from the Appellants and therefore, the threshold amount for calculation of pre-deposit should be ₹50 lacs. The Appellants have not made out any prima facie case, but still, indulgence is shown to the Appellants exercising the jurisdiction of this Tribunal under the third proviso to Sec. 18(1) of the SARFAESI Act and the Appellants are directed to deposit a sum of ₹15 lacs as pre-deposit in two equal instalments. The first instalment of ₹7.5 lacs shall be paid within two weeks from today, payable on or before 19.01.2023. And, the 2nd instalment shall be paid within two weeks therefrom, payable on or before 02.02.2023. In default, the Appeal shall stand dismissed without any further reference of 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 nationalized bank, initially for 13 months, and thereafter to be renewed periodically.
On deposit of the payment within the stipulated time, all further proceedings to be initiated by Respondents under the SARFAESI Act shall stand stayed.
With these observations, the I.A. is disposed of. Respondents are at liberty to file a reply in the Appeal with an advance copy to the other side.
Post on 20.01.2023 for reporting compliance concerning the payment of the firstinstalment.