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Judgment
Ashok Menon, Chairperson
The Appellants are in appeal impugning the order dated 01.12.2022 dismissing two applications i.e. I.A. Nos. 1298/2022 and 1902/2022 in S.A. No. 258/2022 on the files of Debts Recovery Tribunal, Nagpur (D.R.T). The Appellants have challenged the Sarfaesi measures on grounds including the insufficiency of the demand notice issued u/s. 13(2) demanding a sum of ₹ 1,21,00,000/- as of 30.09.2021. It is pointed out that the bifurcation of the principal amount of interest is not shown. It is also pointed out by the Appellants that the calculation of the amount is not correct because the interest is at a floating rate and the details of the interest that has been applied have not been given in the notice.
To entertain this appeal, the Appellants will first have to cross the hurdle of making a pre-deposit u/s. 18(1) the sale has not taken place and therefore as per the latest decision of the Hon’ble Supreme Court of India Sidha Neelkanth Paper Industries Pvt. Ltd. & Ano. vs. Prudent ARC Ltd & Ors., 2023 OnLine SC 12 the threshold amount for pre-deposit should be the amount mentioned as outstanding in the sale notice which is ₹ 1,13,49,072/- as on 15.06.2022.
The Ld. Counsel appearing for the Appellants submits that the Appellants have been earnestly making attempts to pay off the entire debt, and a sum of ₹ 40,00,000/- was paid on 22.07.2022 as directed by the DRT and thereafter, ₹ 15,00,000/- and ₹ 5,00,000/ were paid towards the OTS proposal. However, the OTS proposal failed and therefore, the Ld. Counsel appearing for the Appellants submits that the Appellants are entitled to the benefit of getting the entire amount paid by them reduced from the demanded amount.
According to the Ld. Counsel appearing for the Respondent bank as of 31.10.2023 there is an outstanding balance of ₹ 1,54,89,203.35 and therefore, the Appellants should be directed to make payment on that amount. However, the amount paid towards the settlement by the Appellants is admitted by the Ld. Counsel appearing for the Respondent.
The statement of account has been filed by the Ld. Counsel appearing for the Respondent which also includes the legal charges and the unapplied interest which is challenged by the Ld. Counsel for the Appellants. Taking the entire facts and circumstances, I take the amount mentioned in the sale notice as the threshold amount for payment of pre-deposit.
The Appellants have produced the income tax returns which would indicate that the Appellants are not in a financial position to make the payment of 50% of the amount demanded. Under the circumstances, the Appellants are directed to deposit a sum of ₹ 30,00,000/- as pre-deposit towards which, the Appellants have already deposited a sum of ₹ 7,00,000/- as pre-deposit during the pendency of this appeal. The balance of ₹ 23,00,000/- shall be deposited in two instalments, as stated hereunder.
Numbers of Instalments
Payment on or before
1st Instalment ₹ 10,00,000/-
31.01.2024
2nd Instalment ₹ 13,00,000/-
14.02.2024
The Sarfaesi measures concerning the Sarfaesi action taken in pursuance to the demand notice which is the subject matter of this demand shall stand stayed. In default, the Appeal shall stand dismissed, without any 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 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 01.02.2024 for reporting compliance concerning the payment.