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Judgment
Ashok Menon, Chairperson
The Appellant is in appeal impugning the order dated 01.11.2023 in I.A. No. 2278/2023 in S.A. No. 137/2022 on the files of the Debts Recovery Tribunal, Nagpur (D.R.T). wherein the Ld. Presiding Officer refused to grant any interlocutory relief in favour of the Appellants to stall the Sarfaesi measures initiated by the Respondent bank against the secured assets under the provisions of Sec. 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (“SARFAESI Act” for short) Act.
The Appellant had received a notice u/s. 13 (2) of the SARFAESI Act demanding a sum of ₹ 4,67,05,983/- as of 15. 02.2018. The Appellants paid a sum of ₹ 77,34,000/- consequent to an OTS proposal. Further payments agreed to be made as per the proposal were not made, and therefore, the bank initiated Sarfaesi measures.
The Appellants thereafter made a further payment of ₹ 50,00,000/- towards the amount due and came up with a fresh OTS proposal which was rejected by the bank stating that an amount of more than ₹ 6 crores was due from the Appellant.
In the S.A., the Appellant challenges the Sarfaesi measures taken by the Respondent Bank u/s. 14 stating that though the order passed by the District Magistrate directs the Tahsildar to take possession of the property, notice to take possession of the property was issued by the Naib-Tahsildar and therefore there is sub-delegation of the duty assigned to the Tahsildar which is not permissible. The other ground taken by the Appellants is that they are willing to pay the amount and that the OTS proposal was improperly rejected.
Regarding the sub-delegation of the taking over a possession u/s. 14 by the Naib-Tahsildar, it can be rectified by a direction issued by the DRT that the possession shall only be taken by the Tahsildar as directed by the order made u/s. 14. Therefore, that may not be a valid ground for challenging the Sarfaesi measures.
The acceptance or rejection of an OTS proposal is the prerogative of the creditor bank and the borrower cannot insist on the OTS proposal being accepted by the bank. Hence, the rejection of the OTS proposal is also not a sufficient ground for challenging the Sarfaesi measures. The Appellants have not produced any documents to indicate that they are under financial strain.
The amount demanded u/s. 13 (2) is ₹ 4,67,05,983/- towards which there was a payment of ₹ 1,27,00,000/- subsequent interest has also accrued. According to the Respondent bank, there is an outstanding due of ₹ 6 crores.
However, the Respondent bank did not appear to contest this appeal and, therefore, said ex-parte. The threshold amount for paying the pre-deposit contemplated u/s. 18(1) of the SARFAESI Act is the amount mentioned in the demand notice. The Appellant has paid a certain amount towards that amount but subsequent interest has also accrued. Even if credit is given to the amount that was paid, there will still be a balance of about ₹ 3.5 crores.
The Appellants are, therefore, directed to deposit a sum of ₹ 1.70 crores as pre-deposit. The said amount shall be paid in four instalments within a gap of two weeks each, as stated hereunder.
Numbers of Instalments
Payment on or before
1st Instalment ₹ 38,00,000/-
18.12.2023
2nd Instalment ₹ 44,00,000/-
01.01.2024
3rd Instalment ₹ 44,00,000/-
15.01.2024
4th Instalment ₹ 44,00,000/-
29.01.2024
On payment of the 1st instalment within the stipulated time, the Appellants are entitled to a stay of the further Sarfaesi measures intended to be taken by the Respondent bank. Breach of payment of any of the instalments shall entail dismissal of the appeal.
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 Respondent is at liberty to file a reply in the Appeal with an advance copy to the other side.
Post on 19.12.2023 for reporting compliance regarding the 1st instalment.