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Judgment
Ashok Menon, Chairperson
The Appellant is in appeal impugning the order dated 11.04.2023 dismissing the Securitization Application (S.A.) No. 72/2022 by the Debts Recovery Tribunal-III, Mumbai (D.R.T.) given the settlement that was arrived at between the bank and Appellant borrower who allegedly undertook the payment of the entire debt which was assessed at ₹4 lakhs, in monthly instalments. The Appellant failed to comply with the payment as per the agreed terms, and thereafter, preferred in appeal. The contentions in the appeal are that there was no agreement by the Appellant on ₹4 lakhs being the outstanding amount, and therefore, the disposal of the S.A. vide order dated 11.04.2023 is made based on the submissions of the proxy counsel who was representing the Appellant without instructions.
Prima facie, the contention in the appeal will not lie because section 20(2) of the Recovery of Debts and Bankruptcy Act, 1993 (‘R.D.B. Act’, for short) prohibits an appeal against an order made on consent. In case there was a submission made before the D.R.T. without instruction by a proxy counsel as alleged, the Appellant should immediately have applied for a review before the D.R.T. on the ground that there was no such a submission made on instruction by the Appellant. The Ld. Presiding Officer before whom the proceeding took place alone can decide on whether such submission on consent was made or not.
The Appellant who has preferred this appeal, had also approached the Hon’ble High Court of Bombay with Writ Petition No. 13374/2023 in futility. The Respondent bank has proceeded with the intended Sarfaesi measures under the provisions of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short) against the secured assets and a sale notice has now been issued to recover the outstanding amount ₹5 lakhs.
To entertain the appeal the Appellant will have to make a mandatory pre-deposit as contemplated u/s 18(1) of the SARFAESI Act. The amount in the notice demanded u/s 13 (2) is ₹8.43 lakhs but admittedly, the Appellant has paid a certain amount and the outstanding amount has come down to ₹5 lakhs, and therefore, the said amount has to be taken as threshold amount for assessing the pre-deposit.
To get the indulgence of this Tribunal under the 3rd proviso to section 18 (1), the Appellant will have to prove two things. First, he has a strong prima facie case, and the second is that the Appellant is under financial strain. There is no material to prove a strong prima facie case and there is also no material to indicate that the Appellant is under financial strain and therefore, the Appellant is not entitled to get the benefit of the 3rd proviso to section 18 (1) of the SARFAESI Act. The Appellant is, therefore, directed to deposit a sum of ₹2.5 lakhs as mandatory pre-deposit to entertain the appeal. The Ld. Counsel appearing for the Appellant under instructions, undertakes to deposit the sum within two weeks, on or before 01.01.2024. The Appellant is also directed to approach the bank to settle the entire debt to avoid the impending sale.
Default in payment of any of the amount shall entail dismissal of the appeal 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 Respondents is at liberty to file a reply in the Appeal with an advance copy to the other side.
Post on 02.01.2024 for reporting compliance.