Disposed

M/s. K K Associates v. State Bank of India

DRAT21 Nov 2022IA/304/2022

Case brief

AI extract

What is this about?

The Appellant challenged an order directing payment of a debt sum with 25% pre-deposit. The Tribunal disagreed with the request to further reduce the pre-deposit from 50% to 25%, finding lack of specific pleading on financial strain, but granted liberty to entertain the appeal on depositing Rs 1.5 Crores instead.

What did the court decide?

Liberty granted to entertain the appeal on depositing Rs 1.5 Crores as pre-deposit; request to reduce deposit to 25% rejected.

M/s. K K Associates versus State Bank of India — Execution and Attachment | 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. 304/2022 (WoD) In Appeal on Diary No. 568/2021

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Between

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M/s. K.K. Associates & Anr. … Appellant/s V/s.

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State Bank of India …Respondent/s

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Mr Sudhir Halli, i/b Ms Ruchira Halli, Advocate for Appellant. Mr Vivek Sawant, Advocate for Respondent.

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-: Order dated: 21/11/2022:-

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This is an application u/s 21 of the RDB Act challenging the order dated 05.01.2018 of the D.R.T., Pune in O.A. No. 103/2017 whereby, the O.A. was allowed and the Appellants were directed to pay to the applicants jointly and severally the sum of ₹ 3,92,85,268/together with interest of the rate of 12% p.a with effect from the date of filing of O.A. till the realization.

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The Appellant is aggrieved by that order and has come in appeal. There is also a huge delay in filing the Appeal. The delay of 1421 days of filing the Appeal for which he has filed a separate application for condonation. Since there is a mandatory pre-deposit required for the entertainment of the Appeal, the application for waiver of the deposit is taken up for hearing in the first instance. The Respondent bank has appeared and filed a reply controverting the allegation made in the Appeal and has stated that the sum of ₹5,30,56,857.40/- is due as of date from the Appellants.

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The Appellant had filed the Appeal relying upon the decision of the Hon’ble High Court of Judicature at Bombay in Writ Petition No. 24293 of 2021 and 24630/2021, and accordingly deposited the sum of ₹ 98, 21,500/- on the assumption that the amount would be 25% of the amount that is determined by the D.R.T. Therefore, the learned counsel appearing for the Appellants submits that the said amount may be considered as a 25% of the amount determined and no further payment may be directed to be made as mandatory predeposit invoking the proviso to Sec.21 of the RDB Act.

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In the reply of the learned counsel for the Respondent submits that even the valuation report on the basis of which the loan was advanced, the N.A. order is alleged to be forged. The same is contradicted by the Appellant and the learned counsel for the Appellant submits that it is not a subject matter which needs to be considered in this Appeal.

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The learned counsel for the Respondent indicates that there are no bonafides on the part of the Appellants. The amount which is due from the Appellant has already been determined. further interest has to be calculated at the rate of 12% p.a.

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In view of the decision of the Hon’ble High Court of Judicature at Bombay in MRP Road Construction Pvt. Ltd. V/s Rupee Co-operative Bank Ltd . 2016 (3) Mh.L.J. 589 the interest as of the date of filing the Appeal will also have to be calculated while determining the amount payable as pre-deposit. Under the circumstances, the Appellant is liable to pay a pre-deposit on the amount of ₹5,30,56,857.40.

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The two points that need to be considered for granting the indulgence of reducing the amount from 50% to 25% under the third proviso to Section 21 of the RDB Act, are, first that a prima facie case is to be proved, and second, the financial strain of the Appellant indicating his inability to pay the amount has to be established. For the purpose of the prima facie case, the learned counsel for the Appellant submits that the property was ₹4 Crores sold for a pittance of ₹1.28 Crores and that the Appellant has suffered because of that.

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It is also stated that the Appellant because of the recession Appellants undergoing a hard time but there is no specific pleading with regard to the financial strain in the application for waiver of predeposit.

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Under the circumstances, I find that the Appellant is not entitled to get the amount reduced to 25% but considering that the Appeal need not be dismissed as the threshold I grant liberty to the Appellant to entertain his appeal on depositing a sum of the ₹1.5 Crores as pre-deposit u/s 21 of the RDB Act. He has already

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deposited the amount of ₹98,00,000/- as stated above and the balance amount shall be deposited within four weeks. In default, the Appeal shall stand dismissed, without any further reference to this Tribunal.

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The 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,

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with any nationalised bank, initially for 13 months, and thereafter to be renewed periodically.

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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.

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Post on 20.12.2022 for reporting compliance concerning the payment of the 1^st instalment.

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Chairperson

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psa-05

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M/s. K K Associates v. State Bank of India

Case brief

What is this about?

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M/s. K K Associates v. State Bank of India

Case brief

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