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Judgment
Ashok Menon, Chairperson
The Appellants are in appeal impugning the order dated 04.01.2024 in Securitisation Application (S.A.) No. 393 of 2023 on the files of the Debts Recovery Tribunal, Aurangabad whereby no protection was granted to the Appellants concerning the secured asset in the measures taken by the Respondent HDFC Ltd. for recovery of debt under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, for short). The Appellants are aggrieved and hence in appeal.
The Appellants had availed a housing loan and created a security interest over the subject property. Because of the drought and adverse conditions, the Appellants could not repay the debt on time in consequence of which the account was classified as a non-performing asset (NPA) and the Respondent issued a demand notice under Sec. 13(2) of the SARFAESI Act. The Appellants contend that they have not received the notice. Thereafter, the Respondent obtained an order from the District Magistrate, Dhule on 11.06.2019 for taking physical possession of the secured asset under Sec. 14 of the SARFAESI Act. Notice was served on the Appellants by the Circle Officer on 19.08.2022 directing them to hand over physical possession of the property on 14.09.2022. The Appellants filed S.A. No. 370 of 2022. They had also submitted an OTS proposal to the bank. On 13.09.2022, the D.R.T. directed the Appellants to deposit ₹3 lakhs as a condition precedent for granting protection from dispossession and on depositing the said amount, on 13.09.2022, the S.A. No. 370 of 2022 was disposed of on 12.10.2023. On 14.12.2023, the Mandal Adhikari, Walwadi, issued a notice for taking physical possession of the property on 04.01.2024 and the Appellants filed the present S.A. No. 393 of 2023 before the D.R.T. Interim protection was sought which was declined, and hence, this appeal.
The Appellants will have to cross the hurdle of making a pre-deposit for the appeal to be entertained. Since the sale has not taken place, given the settled position in the decision of the Sidha Neelkanth Paper Industries Pvt. Ltd. & Anr. V/s Prudent ARC Ltd & Ors. 2023 SCC OnLine SC 12 by the Honble Supreme Court, the Appellants will have to deposit 50% of the amount shown in the demand notice. The amount shown in the demand notice is ₹11,09,034/-.
The Ld. Counsel appearing for the Respondent vehemently opposed the application stating that the Appellants have no sustainable case in challenging the Sarfaesi measures.
The Appellants filed earlier S.A. No. 370 of 2022 challenging all measures including the order under Sec. 14 and that S.A. was disposed of on the payment of some amount. Hence, the challenges raised to the Sarfaesi measures till that point have been withdrawn. The fresh challenge in the S.A. No. 393 of 2023 is only concerning the possession notice which has been issued subsequently by the Mandal Adhikari. There is no infirmity pointed out by the Appellants about that notice. Hence, there is no prima facie case for the Appellants against the Respondent. The Appellants have not pleaded anything about their financial strain apart from stating that they are agriculturists. The Appellants are, therefore, directed to deposit a sum of ₹5 lakhs as pre-deposit for entertaining the appeal. The Ld. Counsel appearing for the Appellants has undertaken to produce a demand draft of ₹1 lakh by 12.30 pm today. The balance amount of ₹4 lakhs in two equal instalments within a gap of two weeks each as mentioned hereunder.
Number of Instalments
Payment on or before
1st Instalment of ₹2.00 lakhs
07.03.2024
2ndInstalment of ₹2.00 lakhs
21.03.2024
Default in payment of any of the instalments entails dismissing the appeal without any further reference to this Tribunal.
On such undertaking to deposit ₹1lakh, the taking over of the possession shall stand deferred till the next date of hearing.
The amount shall be deposited as 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 after that 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 08.03.202 for reporting compliance regarding the first instalment.