AI Structured Summary
Not yet generated for this judgment
Judgment
Ashok Menon, Chairperson
Heard the learned counsel appearing for the Appellants and the Respondent on I.A. No. 421/2022 which is an application filed for a waiver of pre-deposit under Sec. 18(1) of the SARFAESI Act.
The appeal impugns order dated 08.02.20202 of the learned Presiding Officer, D.R.T. III, Mumbai, in I.A. No. 62/2022 in S.A. No. 23/2021. The Applicants therein had sought a stay of the Sarfaesi proceedings initiated against them by the first Respondent Financial Institution.
The learned Presiding Officer was pleased to pass an order directing the Applicants to deposit the total sum of 50% of the amount claimed in the 13(2) notice within a time frame.
The Appellants deposited part of the amount but failed to deposit the balance, as a result of which, the stay sought by the applicant against the Sarfaesi measures intended to be initiated by the first Respondent was declined. Hence, the Appellants are in Appeal seeking indulgence to this Tribunal to intervene. It is submitted that the Appellants have a good case on merits because they have allegedly not received notice u/s 13(2) of the SARFAESI Act and that the secured asset that is now being proceeding against is a residential house. It is also submitted that they have several valid contentions, and therefore, seek maximum indulgence and the learned counsel appearing for the Appellants prays that the amount is limited to 25% of the amount demanded in 13(2) notice after deduction of some amounts which have already been paid consequent to that.
After having heard the learned counsel appearing for the Appellants and the Respondent and on the perusal of the records, I find that the amount that is due as on the date of filing of the Appeal after adjusting the sum of ₹78,42,900/- already paid by the Appellants subsequent to the receipt of notice u/s 13(2,) as on today is ₹6,01,81,653/-. The Appeal was filed on 08.04.2022. The Appellants have made out a prima facie case because they have filed the S.A. on the ground that the notice issued u/s 13(2) was not served upon them despite being the owners of secured assets and therefore, they have a good case to get the Sarfasei measures set aside in case they succeed in establishing this. The argument of the learned counsel that the pre-deposit may be limited to 25% of the amount claimed in 13(2) notice minus the amount already paid by them cannot be readily accepted because as per the statement filed by the Respondent subsequent interest was also accrued and even after adjusting the amount which he had paid, the balance would be more than ₹6 Crores.
Considering the facts and circumstances, I am of the considered view that the Appellants have been earnest in making payment and since they have a prima facie case, the maximum indulgence that can be shown by this Tribunal is to reduce the amount to 25% of the amount that is due as on date filing of the Appeal. Hence, the Appellants are directed to deposit a sum of ₹1.25 Crores in two equal installments. The first installment of ₹62.50 Lakhs shall be paid on or before 27.09.2022 and the second installment of ₹62.50 Lakhs shall be paid on or before 18.10.2022. In case of default in payment of any of the above-referred installments, the Appeal shall stand dismissed automatically, without further reference to this Tribunal.
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 nationalized bank, initially for 13 months, and thereafter it will be renewed periodically.
On deposit of the first installment within a stipulated time, all proceedings initiated by Respondent under the SARFAESI Act shall stand stayed.
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 28.09.2022 for reporting compliance concerning payment of the first installment.