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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 05.04.2024 in Securitisation Application (SA) No. 529 of 2024 on the files of the Debts Recovery Tribunal -II, Ahmedabad (D.R.T.) declining to grant any protection to the appellants from the Sarfaesi measures initiated by the respondent bank for recover of debt due under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short)
The Appellants have challenged the Sarfaesi measures on various grounds the main among which is that the demand notice issued under Sec. 13(2) is not by law. The amount demanded is ₹1,29,86,044.83 but it contains items of debt out of which only the first item is a secured debt and other items are not secured because those were loans extended during the COVID period and there is also an agri gold loan. Hence, the Sarfaesi measures could be initiated only against a secured loan and, the notice is bad. It is also contended that a breakup of interest and principal is not given in the demand notice and therefore, there is a violation of the provisions of Sec. 13(3) of the SARFAESI Act. It is further contended that the mortgaged property is agricultural land and given Sec.31(i) of the SARFAESI Act, measures cannot be initiated to recover a debt against an agricultural property. The appellants' defence against the Sarfaesi action was not accepted prima facie and therefore, the Ld. Presiding Officer declined to grant any protection to them. The appellants are aggrieved and hence, in appeal.
A reading of the demand notice under Sec. 13(2) indicates that only the first item of the loan mentioned in the demand notice is a secured debt. Even though the respondent bank has pleaded in its reply to the S.A. that there was a modification deed nothing has been mentioned about it in the demand notice. Under the circumstances, there appears to be a prima facie case in favour of the appellants in challenging the Sarfaesi measures. The amount demanded is approximately ₹1.30 crores and the second appellant has produced the Income Tax Returns to indicate that he has little income. The appellants have submitted that after receipt of the demand notice a sum of ₹57 lakhs has been paid and this fact is not disputed by the respondent bank. It is also to be borne in mind that secured debt could be much less. Therefore, taking into consideration the entire facts and circumstances in this case, the appellants are directed to deposit a sum of ₹35 lakhs as pre-deposit to entertain this appeal. ₹10 lakhs is being deposited by way of a demand draft today. The balance amount of ₹25 shall be paid in two instalments ₹10 lakhs and ₹15 lakhs within a gap of two weeks each as detailed herein under:
Number of Instalments
Payment on or before
1st Instalment of ₹10 Lakhs
19.07.2024
2nd Instalment of ₹15 Lakhs
09.08.2024
Given the payment of ₹10 lakhs today, the possession scheduled to be taken on the 9th instant stands deferred till the next date of hearing.
Failure to pay the instalment/amount within the time stipulated would entail in dismissal of the appeal without any reference to this Tribunal.
The amount shall be deposited in the form of a Demand Draft/RTGS with intimation 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 this appeal with an advance copy to the other side.
Post on 22.07.2024 for reporting compliance regarding the payment of the first instalment.