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Judgment
Ashok Menon, Chairperson
The matter is taken up for hearing by way of a praecipe filed by the Appellants for seeking urgent relief.
The Appellants are in appeal impugning the order dated 13.02.2024 in Interim Application (I.A.) No. 190/2024 in Securitization Application (S.A.) No. 243/2022 on the files of the Debts Recovery Tribunal, Pune (D.R.T.) whereby the Ld. Presiding Officer declined to grant a stay to the auction sale that was to be held concerning the secured assets proceeded against by the Respondent Financial Institution for recovery of the debt due under the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act for short).
The Appellants contented that they were willing to redeem the property and had also submitted a demand draft for a sum of ₹48.50 lakhs before the date of the auction and that they have also expressed their willingness to pay the balance within a short time. However, the sale was not postponed or deferred and it was ultimately, the property was sold for a total sale consideration sum of ₹48 lakhs. The total outstanding amount as of 12.02.2024 was ₹77,84,353.67. The Appellants were willing to clear the entire debt but no opportunity was granted to them and for that reason, they did not redeem the property before the issuance of the sale notice. The Appellants would also contend that it is a collusive sale because three times the sale was adjourned and to facilitate the particular bidder the time was granted by adjournment of the sale voluntarily by the Authorized Officer.
The Appellants have raised certain contentions regarding the purported sale that has taken place which will have to be considered in detail in the S.A. which is still pending. I am therefore, not inclined to go into the merits of the sale but it appeared that the Appellants have a prima facie case though they have not established any financial strain and their inability to deposit the 50% of the debt due.
Considering the decision of the Honble Supreme Court in Sidha Neelkanth Paper Industries Pvt. Ltd. &Ano. vs. Prudent ARC Ltd &Ors., 2023 SCC OnLine SC 12, the Appellants will have to deposit 50% amount that is due inclusive of interest and therefore, a sum ₹77,84,353.67 is considered as threshold amount for making the pre-deposit. The Appellants are directed to deposit a sum of ₹38 lakhs toward the pre-deposit u/s 18 (1) of the SARFAESI Act. The said amount shall be paid in three instalments within the gap of two weeks each as stated hereunder.
Numbers of Instalments
Payment on or before
1st Instalment of ₹ 14,00,000/-
13.03.2024
2nd Instalment of ₹ 12,00,000/-
27.03.2024
3rd Instalment of ₹ 12,00,000/-
10.04.2024
On payment of the 1st instalment within the stipulated time, the confirmation of the sale and handing over the possession of the property to the auction purchaser shall stand deferred till the next date of hearing.
Default in payment of any of the instalments/amount 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 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 Respondents is at liberty to file a reply in the Appeal with an advance copy to the other side.
Post on 14.03.2024 for reporting compliance regarding the payment of the 1st instalment.