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Judgment
Ashok Menon, Chairperson
The appellants are in appeal impugning the order dated 18.10.2024 dismissing the Interlocutory Application No. 2121/2024 (I.A.) in Securitisation Application at Diary No. 1853/2024 (S.A.) by the Debt Recovery Tribunal, Pune (DRT) declining to grant any protection to the appellants concerning the Sarfaesi measures initiated by the respondent (Canara Bank) under the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002 ( “SARFAESI Act” for short).
In the S.A., the appellants had challenged the Sarfaesi measures including the auction sale which has subsequently concluded. It is stated that they did not receive any notice regarding the symbolic possession u/s 13 (4) and that the property was valued and sold at a very low price without any proper valuation report. The Ld. Presiding Officer has in the impugned order observed that the respondent bank has complied with all requisites of u/s 13 (4) and there is no evidence to indicate that the property was prima facie sold at the lower price without proper valuation. Hence, the protection sought by the appellants was declined. The appellants are aggrieved and hence, in appeal.
To entertain this appeal the appellants will have to comply with the mandatory requisite of Sec.18 (1) of the SARFAESI Act. Since the property has already been sold and the appellants are challenging the measures u/s 13 (4) as also the auction sale for want of proper valuation, as per the decision of the Hon’ble Apex Court in M/s. Sidha Neelkanth Paper Industries Pvt. Ltd. & Anr. Vs Prudent ARC Ltd. & Ors. 2023 SCC OnLine SC 12, the appellants will have to pay 50% of the debt due including interest as of the date of filing of the appeal. The respondents have filed the reply to the application for waiver of pre-deposit stating that as of the date of filing of the appeal, the outstanding dues are ₹48,87,37,359.31, and therefore, that is to be taken as the threshold amount for calculation of pre-deposit.
The appellants state that the discretion of this Tribunal under the 3rd proviso to Sec.18 (1) may be exercised for waiving 25% of the debt due for predeposit. The appellants have also produced the income tax returns of the 1st appellant firm which indicate that it is running at a loss and has no sufficient income. The balance sheet accompanying the returns is also produced. Being a partnership firm, the income of the partners is also relevant and therefore, it cannot be accepted that the appellants have succeeded in proving their impecuniosity. The appellants are, therefore, liable to pay 50% of the threshold amount as pre-deposit for getting this appeal entertained. The appellants are directed to deposit a sum of ₹24 crores as a pre-deposit for entertaining this appeal. The said amount shall be deposited in three instalments within the gap of three weeks each as stated hereunder.
Numbers of Instalments
Payment on or before
1st Instalment ₹ 8 Crore
23.12.2024
2nd Instalment ₹ 8 Crore
13.01.2025
3rd Instalment ₹ 8 Crore
03.02.2025
On condition of the payment of the 1st instalment within the stipulated time, the further Sarfaesi action shall stand stalled till the next date of hearing.
In 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 respondents.
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.
In case of compliance, the appeal be listed on 24.12.2024