Sandip Patel vs Authorized Officer, Bajaj Finance Ltd

Ashok Menon, Chairperson

The matter is taken up for hearing by way of Praecipe filed by the Appellant seeking urgent relief. The Appellant impugns the interlocutory order of the Presiding Officer, Debts Recovery Tribunal-I (D.R.T.), Ahmedabad in Securitisation Application (S.A.) No. 305/2022 dated 17.12.2022 declining to grant any stay to the Sarfaesi measures initiated by a first Respondent financial institution for recovery of the amount due from the Appellants under the provision of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’, for short).

A demand notice was issued to the Appellant u/s 13 (2) on 22. 11.2021 demanding a payment of ₹ 79,24,298/- together with interest. The financial institution further took steps for symbolic possession u/s 13 (4) on 25.03.2023 and then proceeded to file an application u/s 14 before the Chief Metropolitan Magistrate, Ahmedabad, and an order was passed to take over the physical possession of the property on 28.06.2022.

The Appellant thereafter approached the D.R.T. with an application under section 17 of the SARFAESI Act. Several grounds are raised regarding the insufficiency of the Sarfaesi measures including the classification of debts as Non-Performing Assets (NPA), insufficiency of the demand notice u/s 13 (2), non-compliance of Security Interest Rules and also the order passed of the u/s 14 of the SARFAESI Act.

In the application for waiver of pre-deposit, the Appellants contend that their business suffered heavy losses due to the Pandemic. It is also stated that the Appellant is suffering severe financial stress and difficulty. And therefore, he is not able to comply with the mandatory provision of paying 50% of the amount due as contemplated under the second proviso u/s 18 (1) of the SARFAESI Act.

The Respondent appeared and the learned counsel appearing for the Respondent submits that no prima facie case has been made out by the Appellant as is discussed in detail in the impugned order of the Presiding Officer. Apart from the vague pleading that the business suffered because of the pandemic and that he is in a financial crunch, there is no substantial evidence to substantiate the submission that the Appellant is suffering from any financial strain. Hence, the learned counsel appearing for the Respondent submits that there is no reason to reduce the amount from the mandatory 50% of the amount due. A sum of ₹ 79,24,298/- was demanded on 22.11.2021. Subsequent interest also would have accrued. The Appellant submits that he has paid a sum of ₹ 8.5 lakhs before the D.R.T. It is also submitted that an OTS proposal has been submitted to show his bonafide attempt to clear the dues.

The learned counsel appearing for the Respondent submits that after adjusting the payment of ₹ 8.5 lakhs by the Appellant, as of date there are dues of ₹ 79,48,557/- and therefore, the said amount will have to be taken as a threshold for calculating the pre-deposit. Apart from the vague pleading in the application for waiver, there is nothing to record the show an Appellant is suffering from any financial strain. The Prima facie case relied upon by the Appellant does not appear satisfactory since there are no grounds challenging the Sarfaesi measures which could be sustained at least Prima facie. The S.A. is still pending and the challenge raised by the Appellant will have to be ultimately considered by the Presiding Officer while disposing of the S.A. therefore, I don’t intend to delve deep into the insufficiency of the Sarfaesi measures pleaded by the Appellants at this stage of waiver of pre-deposit.

The Appellant is, therefore, directed to deposit a sum of ₹ 30 lakhs in two equal instalments. The first instalment of ₹15 lakhs shall be paid within three weeks on or before 24.01.2023, and the second instalment of ₹15 lakhs shall be paid within another three weeks on or before 14.02.2023. On payment of the first instalment, the Appellant shall be entitled to the stay of further Sarfaesi measures initiated by the first Respondent. defaulting of the payment of the Pre-deposit shall entail in dismissal of the Appeal without any further reference.

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 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 25.01.2023 for reporting compliance concerning the payment.