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Judgment
Ashok Menon, Chairperson
The appellants, the borrowers are in appeal impugning the order dated 21.02.2024 in Interlocutory Application (I.A.)No. 958/2022 vacating the earlier stay granted to the appellants in Interlocutory Application No. 866/2021 (I.A.) vide order dated 24.12.2021 on condition of depositing a sum of ₹25 lakhs by 27.12.2021 and that amount was directed to appropriate toward the debt and the appellants were directed to negotiate with the creditor for a settlement. However, the respondent Financial Institution thereafter moved the I.A. No. 958/2022 for vacating the protection granted to the appellants and by order dated 21.02.2024 it was vacated stating that the amount was directed to be paid with the particular purpose and liberty was granted to the respondent to issue the notice for taking possession, if they desired to do so. Aggrieved by this order, the appellants are in appeal.
It is pertinent to note that after filing this appeal, notice was issued to the appellants for taking over physical possession of the subject property and the appellants filed another application as I.A. No.1204/2024 before the DRT and got an order to maintain the status quo for a month on condition of payment of 10% of the demanded amount. A sum of ₹36.50 lakhs was paid by them and the taking over possession was deferred for the month. In the order dated 24.12.2021, it was also mentioned by the DRT that the respondent is ready to release the property and the appellants are at liberty to negotiate for the sale of that property. As a consequence, one item of the secured asset which is a shop room was sold for a sum of ₹1.40 crore and the amount was deposited with the respondent bank which is still being retained with the respondent bank in the no lien account as directed by the DRT vide order 30.03.2022. That particular amount is not yielding any interest. One property has already been sold and there are two more items of the property which are the secured assets against which the respondent is now proceeding. When notice for taking physical possession was issued, the appellants despite having filed this appeal challenging the order 21.02.2024 filed I.A. No. 1205/2024 got an order of protection for one month subject to payment of a sum of ₹36.50 lakhs.
To entertain this appeal the appellants will first have to comply with the mandatory requisite of making the 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 sale has not been challenged the measures still at this stage of section 13 (4) of the SARFAESI Act as per the judgement of the Hon’ble Supreme of India in M/s. Sidha Neelkanth Paper Industries Pvt. Ltd. & Anr. Vs Prudent ARC Ltd. & Ors. 2023 SCC OnLine SC 12, the threshold amount for the payment of the pre-deposit will be the amount mentioned in the demand notice u/s 13 (2) i.e; a sum of 3,65,47,384.23. The appellants have not produced any document to indicate that they are under financial strain. Regarding the challenge to the Sarfaesi action, it is stated that the demand notice u/s 13 (2) does not give the bifurcation of the amount demanded, and it is also stated that the name and designation of the Authorised Officer of the respondent is not stated in the notice.
It is further contended that there is no proof regarding the CERSAI registration as required u/s 26 (D) of the SARFAESI Act and therefore, demand notice u/s 13 (2) is bad and as the foundation falls the entire Sarfaesi measures will also have to fall, submits the Ld. Counsel appearing for the appellants.
On going through the details I find that there is a bifurcation given in the demand notice which indicates the principal amount, the interest and other charges. Of course, there is no breakup of the other charges which have been consolidated amount but insisting on the breakup of that amount also will be too pedantic a demand to be addressed and therefore, I am of the opinion that the prima facie there is no infirmity of the demand notice, except for the fact that the name and designation of the Authorised Officer have not been given. But in the reply given to the demand notice u/s 13 (2) by the appellants they have not asked for the details of the Authorised Officer. Had they asked for it, the reply given by the bank u/s 13 (3A) would have clarified it. I find that the appellants have the opportunity to prove the authority of the Authorised Officer during the trial before the DRT in the S.A.
Taking the entire facts and circumstances of this case, I find that the appellants will have to pay 50% of the amount mentioned in the demand notice as the pre-deposit for entertaining this appeal. They have already deposited a sum of ₹1.40 crore as the amount received on the sale of one of the items of property with the bank and they are also willing to let the bank appropriate that amount toward the debt due. Hence, to entertain this appeal, I direct the bank to produce that amount a sum of ₹1.40 crore before this Tribunal for being considered as part of the pre-deposit amount and the appellants shall deposit a further amount of ₹42 lakhs toward pre-deposit. The Ld. Counsel appearing for the appellants concedes that a sum of ₹10 lakhs would be deposited by tomorrow by 4 PM and the balance ₹32 lakhs shall be deposited within two weeks i.e. on or before 01.01.2025.
Subject to payment of a sum of ₹10 lakhs tomorrow by 4 PM, further Sarfaesi measures shall stand stalled till the next date of hearing.
Default in payment of any of the amount/instalment 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. Payment by RTGS shall be communicated to the Registry for verification and intimated to the counsel for the respondent.
As and when the said amounts are deposited, they shall be invested in term deposits in the name of Registrar, DRAT, Mumbai, with any Nationalized 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.
List the matter on 02.01.2025 for reporting compliance regarding the payment of pre-deposit.