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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 are in appeal impugning the order dated 22.08.2024 in Interlocutory Application No. 2014/2024 (I.A.) in Securitisation Application No. 511/2023 (S.A.) on the files of the Debt Recovery Tribunal, Pune (D.R.T.) whereby the appellants had asked for an extension of time to pay the amount which they had undertaken to pay within a stipulated time in instalments. They could comply with the payment of only two instalments totalling ₹65 lakhs and the balance was not paid. They sought time till 05.09.2024 but the D.R.T. was not inclined to grant an extension since there was an outstanding dues sum of ₹2,23,46,092/- to be paid as of 19.08.2024.
Aggrieved by this order they filed another application before the D.R.T. for an interim stay till the appeal was filed. The Ld. Presiding Officer vide order dated 22.08.2024 granted protection till the appeal period is over and that is how the appeal has been filed. This appeal challenges the order of the refusal to grant an extension of time.
To entertain the appeal the appellants will have to comply with the mandatory pre-requisite of making pre-deposit u/s 18 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002 ( “SARFAESI Act”, for short) since the amount due or undertaken to be paid as a sum of ₹3,38,46,092/- the appellants volunteered to deposit a sum of ₹1.70 crores upfront as pre-deposit which would approximately make 50% of the debt that is due. The appellants could not pay the 50% amount in time and sought an extension before this Tribunal by filing I.A. No. 732/2024 and that application was allowed and time was extended. But even within that extended time, the appellants could not pay the entire amount a sum of ₹1.70 crore and the balance a sum of ₹38 lakhs was paid only on 16.10.2024. The appellants have now paid the entire sum of ₹1.70 crore and therefore, there is no embargo in entertaining this appeal since 50% of the debt due is paid. Hence, the appeal will have to be entertained.
Coming to the merits of the appeal, I find that the only scope of this appeal was to see whether the D.R.T. was justified in not granting an extension of time to pay the amount undertaken to be paid by the appellants. The appellant has sought time till 05.09.2024, which was declined by the impugned order. The scope of this appeal is therefore limited to whether the DRT was justified in declining to grant an extension till 05.09.2024. They could not pay the amount even within that time and therefore, the appeal has now become infructuous. It is brought to the notice of this Tribunal that the two items of the property that were mortgaged, and both have been sold. The factory premise was sold for a sum of ₹3.07 crores and the residential premise was allegedly sold for a sum of ₹2.24 crores. That would be more than the total amount due.
The Ld. Counsel appearing for the appellants submits that even if the sale consideration received on the sale of the factory premises is taken as admitted the payment of a sum of ₹65 lakhs paid by the appellants in two instalments added to that would clear the entire debt, and therefore, the respondent could not have proceeded with the sale of residential premise.
Given my finding that this appeal has now become infructuous, the fact of whether the respondent was justified in selling the residential premise despite having realised the entire debt by the sale of the factory premise and the payment of a sum of ₹65 lakhs is something to be considered by the D.R.T. and therefore, I leave it to the D.R.T. to decide in the pending S.A. the question whether the appellants are entitled to save the residential premises which could not have been sold given the payment and realisation of the entire debt by sale of the factory premises. Leaving these questions to be determined by the D.R.T., this appeal is disposed of. It is conceded by the Ld.
Counsel on the instruction given by Appellant No.2 who is present in person on behalf of the appellants, the sale of the factory premises can be confirmed, and the respondent bank is at liberty to hand over possession of the factory premises on 13.12.2024 to the auction purchaser. The handing over of possession of the residential premise shall await the order of the D.R.T. in the pending S.A. The possession of the residential premise scheduled to be taken on 11.12.2024 shall not be taken in view of this order made by this Tribunal and it is left to the D.R.T. to decide as to whether the sale of the residential premise is also necessary or not, considering the principle of only that much property as much is required for the realisation of the debt need be sold.