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Judgment
Ashok Menon, Chairperson
The matter is taken up for hearing by way of a praecipe filed by the appellants for seeking urgent relief.
The appellants impugn the order dated 03.12.2024 in Securitisation Application (S.A.) No. 183/2023 passed by the Debts Recovery Tribunal-I, Mumbai (D.R.T.), declining to grant any protection to the appellants concerning the taking over of the possession by the respondent bank for recovery of debt allegedly due from the appellants under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short).
It is an admitted case that the sale of the secured asset has already taken place and confirmation in favour of the auction purchaser. What remains is the handing over of the physical possession of the subject property to the auction purchaser. The respondent bank has already obtained an order u/s 14 of the SARFAESI Act and the notice was issued to the appellants for taking possession of the subject property when the S.A. was filed. The contentions raised in the challenge to the Sarfaesi measures is that the demand notice issued u/s 13(2) does not give a bifurcation u/s 13(3). Moreover, the said notice does not reveal the name and designation of the authorised officer who issued it. It is further contended that the provisions under Rules 8 (1) and (2) of the Security Interest (Enforcement) Rules have not been complied with by the respondent bank before taking symbolic possession of the property. In consequence of the order u/s 14, a notice of only seven days was given for taking possession. The appellants insist on at least 15 days' notice of dispossession. The Ld. Presiding Officer observes that the rules do not prescribe 15 days prior notice before taking possession u/s 14 and therefore, a notice of one week would suffice. Mr Charles, the Ld. Counsel appearing for the appellants has relied upon the decision of the Hon’ble Division Bench of Gujarat High Court in Writ Petition No. 68/2012 wherein it is specifically observed and therefore, before taking possession u/s 14 of the SARFAESI Act, a fortnight’s notice is required. The Ld. Counsel therefore, would say that even though no statutory rules are prescribing a specific notice period before taking possession, the precedent of the Division Bench of Gujarat High Court indicates that a fortnight’s notice is mandatory and therefore, there is a violation of rules. Hence the impugned order is erroneous.
For entertaining this appeal, the appellants will have to comply with the requisite of making a pre-deposit u/s 18(1) of the SARFAESI Act. The sale of the subject property has concluded. Consequent to the demand notice u/s 13(2), the appellants have admittedly made certain payments. The sale took place for an amount of ₹21,28,500/-and the entire debt has been wiped off by this sale amount. However, since the appellants are challenging the sale, no benefits can be given to the appellants concerning the amount which has been received by way of sale consideration. Deducting that amount, the outstanding arrears/dues would be approximately ₹16 lakhs, and the appellants will have to deposit 50% of that amount as pre-deposit i.e., ₹ 8 lakhs. Since the possession of the property is scheduled to take place tomorrow, the appellants shall deposit ₹4 lakhs today towards pre-deposit and the balance of ₹4 lakhs be paid within two weeks i.e. on or before 19.12.2024.
Subject to payment of the 1st instalment of ₹4 lakhs by way of RTGS/Demand Draft before 4 p.m. today, the taking over of the possession scheduled tomorrow shall stand deferred till the next date of hearing.
Default in payment of any of the amount/instalment on time shall entail the dismissal of the appeal without any further reference to this Tribunal.
The amount shall be deposited in the form of a Demand Draft/RTGS with the Registrar of this Tribunal. Payment by RTGS shall be communicated to the Registry for verification.
As and when the said amount is deposited, it 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 20.12.2024 for reporting compliance of the payment of pre-deposit.