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Judgment
Ashok Menon, Chairperson
The matter is taken up for hearing by way of Praecipe filed by the Appellant seeking urgent relief.
Heard the learned counsel for the Appellants and the learned counsel for Respondent.
The Appellants are challenging the order of the Ld. P.O., D.R.T-II, Mumbai, in Interim Application (I.A.) No. 1230/2022 in Securitization Application (S.A.) No. 123/2022 wherein the Ld. PO declined to grant a stay of the Sarfaesi measures taken by the Respondent Financial Institution. The Appellants have, therefore, come up with an Appeal challenging that order. Compliance with Section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Act, 2002 (the SARFAESI Act for short) is mandatory and the learned counsel appearing for the appellants submitted that serious contentions have been raised challenging all the Sarfaesi measures right from the date of classifying the debt as Non-Performing Asset (N.P.A. for short) till the date of taking over of possession u/s 13(4) of the SARFAESI Act. The notice issued u/s 13(2) of the SARFAESI Act was also challenged and it is stated that they have not received the notice. All those matters are required to be decided in the S.A. which is still pending determination. For entertaining the Appeal, it requires the Appellants to deposit 50% of the amount due. The amount shown in the 13(2) notice issued on 29.02.2022 is Rs.53,93,267/- thereafter, subsequent interest would also accrue. It is submitted in the application that the appellant had after that, consequent to the issuance of notice u/s 13(2) paid a sum of Rs.7,92,052/- and that also needs to be deducted from the amount that is due.
The learned counsel appearing for the Respondent submitted he has not been able to file the reply to this application for waiver of pre-deposit but under instruction, he submits that as on the date of filing of the Appeal, there is a total sum of about Rs.78,00,000/- due from the appellant which includes the interest till date and also has accounted for the payment referred by the Appellant. Considering the exigency, the said amount is taken as the amount due for the purpose of determining the mandatory pre-payment to be made.
The Appellant has pleaded that he was in an impecunious situation because of the Covid pandemic and was not able to run his business, but now, his business is gradually catching up, and he is looking to settle the entire dues to the Respondent, therefore, the Appeal may be entertained and not be disposed of at the threshold. The learned counsel for the Appellant seeks maximum indulgence from this Tribunal.
Considering the entire facts and circumstances, in this case, I find that the Appellants are entitled to indulgence considering the that they have attempted payments even after receiving notice under Sec. 13(2); and considering the impecunious situation of the Appellants, I do not insist on payment of 50% of the amount towards pre-deposit. Interests of justice would be met if the Appellants are directed to deposit a sum of Rs.25,00,000/- (Rs. Twenty Five Lakhs only) towards pre-deposit for entertaining this Appeal. The Appellants shall deposit a sum of Rs.10,00,000/- (Rs. Ten Lakhs only) on or before 18.08.2022 and the rest of the amount shall be deposited in three equal installments of Rs.5 Lakhs each within a gap of two weeks each. The second installment shall be paid on or before 01.09.2022, the third installment shall be paid on or before 15.09.2022, and the fourth installment shall be paid on or before 29.09.2022. In case of default in payment of any of the above-referred installments, the Appeal stands dismissed automatically.
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 it will be renewed periodically.
On deposit of the first installment within a stipulated time, the Appellants shall be entitled to stay of all further Sarfaesi measures initiated against them by the Respondent.
With these observations the I.A. is disposed of. The Respondent is at liberty to file a reply on the Appeal with an advance copy to the other side.
Post on 22.08.2022 for reporting compliance concerning payment of the first installment.