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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 30.03.2024 in Securitization Application (S.A.) No. 114/2024 disposing of the S.A. based on a purported undertaking given by the appellants that the entire debt would be discharged by approaching the respondent Financial Institution with an OTS proposal, and upfront, the appellants had also paid a sum of ₹3 lakhs to the respondent.
However, the appellants did not approach respondent with an OTS proposal, and therefore, steps were taken by the respondent to take physical possession of the secured assets based on the order obtained by the respondent u/s 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short) from the Chief Judicial Magistrate (CJM), Aurangabad. Notice was issued by the Court Commissioner on 29.05.2024 to take physical possession of the property on 13.06.2024 but the taking over of the possession was thwarted by the appellants by allegedly agreeing to make payment and also issued post date cheque to be collected on 10.06.2024. It is contended by the respondent counsel that the cheque for a sum of ₹18,70,000/- submitted by the appellants toward the full payment of the debt was dishonoured and as per the affidavit of undertaking given by the appellants before the Authorized Officer on dishonouring of the cheque they would voluntarily hand over possession of the property on 11.06.2024. Since the cheque was dishonoured, and no payment was forthcoming. The appellant ought to have surrendered possession of the property on 11.06.2024 which they did not do and they have now come up with this appeal, submits the Ld. Counsel appearing for the respondent. The demand notice demands the sum of ₹10,76,687/-.
The main contention raised by the appellants is that the demand notice u/s 13 (2) was not served upon them. The application filed u/s 14 indicates that the appellants were avoiding service of notice u/s 13 (2) and therefore, the notice was published in two newspapers including the vernacular newspaper but despite that, there was no response. The Ld. Counsel appearing for the appellants would contend that the notice was, however, not affixed on the premises as is required under Rule 3 of the Security Interest (Enforcement) Rules 2002, and publication alone would not have been sufficient.
The Ld. Counsel appearing for the appellants would also submit that the address of the appellants is incorrectly mentioned in the proceeding u/s 14 and therefore, it would have been so mentioned in the notice u/s 13 (2). The house number is wrongly stated as 48 in the application u/s 14 whereas the S.A. and the appeal memorandum indicate that the house number of the appellants is 18 not 48.
In counter to that, the Ld. Counsel appearing for the respondent would contend that the appellants have filed an affidavit before the D.R.T. which indicates that their house number is not 18 but only 48. There is a specific pleading to the effect that the respondent has mentioned the house number incorrectly as 48 and the corrected house number would be 18. In case the affidavit of the appellants is to be accepted, the address is correct, and therefore, u/s 27 of the General Clauses Act, there is the presumption of due service of notice at the correct address of the appellants. Hence, the appellants do not have any prima facie case, and the appellants have not produced any document to indicate that they are under financial strain. The only pleadings are that they are agricultures and that because of the failure in their crops, they are under financial strain. That may not be sufficient and hence, the appellants are directed to deposit 50% of the amount which is mentioned in the demand notice issued u/s 13 (2) which would come to a sum of ₹10,76,687/-. Toward which the Ld. Counsel appearing for the appellants paying a sum of ₹2 lakhs by today 5 P.M. by way of RTGS and the balance amount shall be paid within two weeks, i.e. on or before 25.06.2024
Subject to the payment of a sum of ₹2 lakhs today the taking over possession scheduled on the 13th instant shall stand deferred till the next date of hearing.
Default in payment of any of the amount 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.
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 26.06.2024 for reporting compliance regarding the payment.