AI Structured Summary
Not yet generated for this judgment
Judgment
Ashok Menon, Chairperson
The matter is taken up for hearing by way of a praecipe filed by the Appellant for seeking urgent relief.
The Appellant is in appeal impugning the order dated 20.12.2023 in Securitization Application (S.A.) No. 444/2023 on the files of the Debts Recovery Tribunal-I, Ahmedabad (D.R.T.) wherein the Ld. Presiding Officer refused to grant any protection to the Appellant against the Sarfaesi measures initiated by the Respondent bank concerning the secured assets mortgaged by the Appellant for the debt due to the Bank. The Appellant has raised several contentions in her application u/s 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short) which states that the Appellant is not liable for the entire amount because the subsequent facility was without her permission and sanction for which the principal borrower alone is liable and that only for the initial loan the Appellant is liable, and for which alone the property was mortgaged.
It is also submitted that the property mortgaged by the other third-party mortgagers has been released without receiving any payment which is also not appropriate and putting the entire burden on the Appellant’s property was not justified. The Ld. Counsel for the Appellant would contend that the Appellant has a strong prima facie case and that she is also under financial strain as proved by the income tax returns for the years 2021-2022 and 2022-2023 which indicate that she has an income of only ₹4,95,950/- and therefore, she is not in a financial position to comply the statutory mandate to deposit 50% of the debt due and demanded. The notice u/s 13 (2) demands the sum of ₹1,04,66,518.54/- and the Appellant seeks indulgence of this Tribunal to reduce the amount of pre-deposit to the minimum of 25% as complicated under 3rd proviso to section 18(1) of the SARFAESI Act.
The contentions raised in the S.A. are something to be decided in the S.A. Even though the Ld. Presiding Officer has arrived at prima facie findings that the challenges are not sustainable, it is made clear that it will not have any bearing on the merits of the contentions taken by the parties in the S.A. when the S.A. is finally heard. Hence, at this stage of deciding the payment of the pre-deposit, I am not entering a finding of the contentions raised by the Appellant. It would suffice to say that the Appellant has an arguable case that needs to be examined while disposing of the appeal finally. Given the decision of the Hon’ble Supreme Court of India in Sidha Neelkanth Paper Industries Pvt. Ltd. & Ano. vs. Prudent ARC Ltd & Ors., 2023 SCC OnLine SC 12, the threshold amount is the amount demanded in the demand notice u/s 13 (2). The Appellant has to some extent also indicated that she is under financial strain. Though the Ld. Counsel appearing for the Respondent submits that the income tax return alone may not be made the basis to find the financial strain of the Appellant as her husband is also employed, has a source of income which is coming to the family, and therefore, the Appellant is may not be granted any indulgence.
On considering the entire facts and circumstances, the Appellant is directed to deposit a sum of ₹30 lakhs as pre-deposit for entertaining the appeal. The Ld. Counsel appearing for the Appellant undertakes to deposit a sum of ₹10 lakhs by way of RTGS in the name of the Registrar DRAT, Mumbai, on or before 08.01.2024 and the balance of ₹20 lakhs shall be deposited in two equal instalments within the gap of two weeks each as stated hereunder.
Numbers of Instalments
Payment on or before
1st Instalment of ₹ 10,00,000/-
22.01.2024
2nd Instalment of ₹ 10,00,000/-
05.02.2024
Subject to the deposit of a sum of 10 lakhs, before 08.01.2024, the Appellant shall be entitled to a stay of the further Sarfaesi measures till the next date of hearing.
Default in payment of any of the instalments/amount shall entail in 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 are at liberty to file a reply to the Appeal with an advance copy to the other side.
List on 09.01.2024 for reporting compliance