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Judgment
Ashok Menon, Chairperson
Heard the learned counsel for the Appellants and the learned counsel for Respondents on the I.A. No. 390/2022, i.e. application for waiver of pre-deposit.
The Appellants are aggrieved by the impugned order dated 02.08.2022 passed by the Ld. Presiding Officer, D.R.T., Pune, in I.A. No. 1210/2022 in S.A. No. 337/2022, wherein the prayer for an interim order to stall the proceedings initiated by the Bank under of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act) was refused. It is also understood that the Ld. P.O. had directed the Appellant to pay a sum of Rs.5 Lakhs, which has not been complied with, and it is under such circumstances, that the Sarfaesi proceedings were refused to be stalled.
Aggrieved by the said order the Appellants are before this Tribunal in Appeal.
In the application for waiver of pre-deposit the Appellants have sought a total waiver, but by any means, the same is not acceptable in view of a catena of precedents by the Hon’ble High Courts and the Hon’ble Supreme Court. At the most, the amount can be reduced to 25% which is within the discretion of this Tribunal, for reasons to be recorded under the third proviso to sub-section 1 of section 18 of the SAFAESI Act. However, it is seen that the Appellants have not made out any prima facie case in their application or the accompanying affidavit except stating that the amount claimed in the notice u/s 13(2) of the SARFAESI Act is exorbitant. It is pertinent to note that the Respondent Bank had already filed an Original Application (O.A.) No. 392/2019 before the D.R.T., Pune and the same was decreed and the Recovery Certificate has been issued. The amount due from the Appellant is determined and remains unchallenged.
The Bank has now resorted to the Sarfaesi measures by issuing notice u/s 13 (2) of the Act demanding payment of a sum of Rs.37,41,694/- as of 01.01.2018. The notice was not responded to by the Appellants. But it is admitted by the learned counsel for the Respondents that certain payments have been made but interest has also accrued thereon and as of the date, the amount due is Rs.35,53,852.25. The second proviso to section 18 (1) of the SARFAESI Act is a mandatory requirement insisting on payment of 50% of the amount which is adjudicated or claimed. In the instant case, the amount has already been adjudicated by the virtue of the decision in the O.A. which has not been challenged. Apart from challenging the correctness of the amount mentioned in the notice u/s 13 (2), the Appellants have not raised any other contentions for challenging the Sarfaesi measures and they have not made any strong prima facie case in their favour. Further, is stated that they are in impecunious condition because of the pandemic and other impending situations, and are not in a sound financial condition to pay the amount as demanded by the Bank.
This submission will take care of half of the requirements, therefore, I find that the Appellants are not entitled to any indulgence to seek discretionary powers of this Tribunal in their favour. On considering the entire facts and circumstances of the case, I directed the Appellants to pay a sum of Rs.15 Lakhs as a mandatory pre-deposit under the second proviso to Section 18 (1) of the SARFAESI Act within a period of four weeks. The first installment of Rs.5 Lakhs shall be deposited within a week i.e. on or before 01.09.2022 and the balance amount shall be deposited in two equal instalments of Rs.5 Lakhs each. The second instalment shall be deposited on or before 13.09.2022 and the third instalment shall be deposited on or before 22.09.2022. In case of default in payment of any of the above-referred installments, the Appeal stands dismissed automatically.
The amounts shall be deposited in the form of a Demand Draft with the Registrar of this Tribunal.
On payment of the first installment, the Appellants shall be entitled to stay of further proceedings under the SARFAESI Act, initiated by the Bank against the secure assets.
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.
Post on 02.09.2022 for reporting compliance concerning payment of the first installment.