Disposed

Santosh Shridharrao Vyavahare v. Indian Overseas Bank

DRAT14 Jun 2022IA/190/2022

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal determined the appellant's pre-deposit liability under Section 18 of the SARFAESI Act at Rs. 34 Lakhs instead of the standard 25% after hearing on financial distress. The court allowed an installment plan for the balance and granted a stay on auction proceedings contingent on the first payment.

What did the court decide?

Stay on proceedings under SARFAESI Act granted subject to payment of Rs. 16,85,000 in two installments.

Santosh Shridharrao Vyavahare versus Indian Overseas Bank — Banking and Recovery | DRAT (2022)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT : MUMBAI Present : Mr. Justice Ashok Menon, Chairperson

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I.A. No. 190/2022 (WoD) in Appeal Dairy No. 501/2021

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Between

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Santosh s/o Shridharrao Vyavahare … Appellant/s V/s.

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Indian Overseas Bank & Ors.

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…Respondent/s

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Mr. Amol Ram Joshi, Advocate for Appellant.

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Ms. Khushabo Agarwal, i/b M/s. Thodur Law Associates, Advocate for Respondent No.1.

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-: Order dated : 14/06/2022 :-

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Heard learned counsel for the Appellant in this matter. Appellant has already deposited a sum of Rs.17.15 Lakhs towards pre-deposit u/s 18 the SARFAESI Act and considers it to be 25% of the amount that was claimed in the notice issued u/s 13 (2) of the SARFAESI Act by the Respondent Bank on 23.07.2012. In view of the decision of the Hon’ble High Court of Bombay in MRB Roadconst Pvt. Ltd. Vs. Rupee Co-op. Bank Ltd. AIR 2016 (NOC) 334 (BOM.) subsequent interest that has accrued consequent to the issuance of notice u/s, 13 (2) of the SARFAESI Act also will have to be added. In the reply that has been filed by the Bank, there is a schedule that indicates that subsequent interest is calculated @ 12.25% p.a., and the penal interest is also added along with other charges and the amount indicated in the Schedule as of 12.06.2022 is Rs.1,37,06,956/-. The Appeal is filed on 08.10.2021 and the amount is to be decided on principal with interest till that date and

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not till 12.06.2022 and as on the date of filing of Appeal definitely, the amount due will be less than what is shown in the Schedule.

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The learned counsel appearing for the Appellant submits that the secured assets have been auctioned and Rs.86 Lakhs have been realized by the Bank, but in view of the fact that the auction sale itself is challenged, the Appellant cannot get that amount adjusted towards the total amount due. However, there is no subsequent payment apart from the amount which has been deposited by taking resort under the decision dated 02.12.2021 of Hon’ble High Court of Judicature at Bombay in Bank of Bahrain & Kuwait B.S.C. Vs. Union of India & Ors. Writ Petition (L) No. 24293 of 2021 and MSTC Ltd. Vs. Standard Chartered Bank Writ Petition (L) No. 24630 of 2021.

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The learned counsel for the Appellant also submits that the Appellant is in financial distress because he has already lost his property which is the only farming land in hand and he has no other means of payment under these circumstances he seeks indulgence for reducing the maximum.

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Considering the facts and circumstances of the case, I find that there is no necessity to direct 50% amount and showing indulgence, the amount to be deposited by the Appellant is determined at Rs.34,00,000/-. Deducting Rs.17,15,000/- which has already been deposited on 11.02.2022, the balance of the amount of Rs.16,85,000/- shall be paid in two equal instalments of Rs.8,42,500/- each. The first instalment shall be deposited within three weeks i.e. on or before 07.07.2022 and the second installment shall be deposited within three weeks i.e. on or before 28.07.2022.

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On the payment of the first instalment within the time stipulated, there shall be a stay on all further proceeding with regards to the subject secured property under the SARFAESI Act.

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In case of default in any of the above-referred deposits, the Appeal stands dismissed automatically.

¶17

The above amount shall be deposited in the form of a Demand Draft with the Registrar of this Tribunal.

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As and when the said amounts are deposited, they shall be invested in term deposits in the name of Registrar, DRAT, Mumbai, with any nationalized bank, initially for 13 months, and thereafter it will be renewed periodically.

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Post on 08.07.2022 for reporting compliance with payment of the first instalment.

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Sd/Chairperson

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dpj-31

Santosh Shridharrao Vyavahare v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

Santosh Shridharrao Vyavahare v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

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