Disposed

M/s. Raj Labdhi Infrastructures Pvt. Ltd. v. Union Bank of India (Corporation Bank)

DRAT29 Aug 2022IA/395/2022

Case brief

AI extract

What is this about?

The Tribunal admitted the application challenging the taking over of possession under Sec. 14 of the SARFAESI Act. A stay was granted subject to the mandatory direction of the Appellant to deposit 50% of the outstanding dues as a pre-condition.

What did the court decide?

Directing the Appellant to deposit Rs. 15 Crores in two equal installments to obtain a stay on further SARFAESI measures.

M/s. Raj Labdhi Infrastructures Pvt. Ltd. versus Union… — 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. 395/2022 (WoD) In Appeal on Diary No. 782/2022

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Between

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M/s. Raj Labdhi Infrastructures Pvt. Ltd.&Ors. … Appellant/s V/s.

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A.O., Union Bank of India …Respondent/s

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Mr Rajesh Nagori, i/b MsRajani Trivedi &MrChavhan, Advocate for Appellant.

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Mr A.S. Panesar, Advocate for Respondent.

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-: Order dated: 29/08/2022:-

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Heard the Ld. Counsel appearing for the Appellant and Ld. Counsel appearing for the Respondent Bank.

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The Appeal is filed under Sec. 18 of the SARFAESI Act challenging an Interlocutory Order dated 04.08.2022 of the Ld. P.O. passed in S.A. No. 18/2022 wherein the Appellant had sought the stay regarding the impending action of the Authority under Sec. 14 of the SARFAESI Act. The order of the District Magistrate directing the Mamlatdar to take over possession of the property was passed on 17.11.2017 and according to that, the entire property which has been mortgaged and forms part of secured assets except for seven flats specified in the order, regarding which NOC has been issued by the secured creditor and sold by the Appellant borrower are excluded. Subsequently, as admitted by the Respondent Bank, 21

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more flats were excluded and NOCs issued with respect to those flats, which too were sold, and need to be excluded. However, the Appellant is apprehensive that the entire property including the flats regarding which the NOCs were issued, is now intended to be taken possession of. That would cause much hardship to the persons who have purchased the flats for good value and are bona fide purchasers. According to the Appellant, 35 flats have been sold but the Respondent Bank admits the sale of only 28 flats including the seven flats which were expressly excluded in the order of the District Magistrate.

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It is also submitted by the Ld. Counsel by the Respondent Bank the Appellant has sold some of the flats without getting NOC, and therefore, he cannot get protection regarding those flats which have been sold without a proper NOC and the sale proceeds of which realised by the Appellant have not yet been deposited with Bank.

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The main dispute is regarding the taking over of possession of the entire property without excluding the sold-out flats. The Ld. P.O., D.R.T. had in the impugned order refused to grant any interim order with regard to taking over possession, stating that in view of the pursis which has been filed by the Respondent Bank, the property which they admit to having been sold consequently to the issuance of the NOCs would not be taken possession, and therefore, no hardship whatsoever is caused to the Appellant.

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The question that now arises for consideration before this Tribunal is the mandatory amount that has to be deposited under the second proviso to Sec. 18(1) of the SARFAESI Act. The total

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amount that is due from the Appellant as of date is �39,71,21,749.52 and therefore, the Ld. Counsel appearing for the Respondent Bank submits that the Appellant be directed to pay 50% of the aforesaid amount. And going by their conduct of defaulted payment of the amount which has been due since 2016, they are not entitled to any concession or indulgence from this Tribunal.

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I find that the Appellant has challenged the order of taking over possession under Sec. 14 of the SARFAESI Act. The argument of the Ld. Counsel appearing for the Appellant is that with the existing order of the District Magistrate which was passed in 2017 the possession cannot be taken over because it excludes only seven flats and not all the flats which were admittedly excluded..

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The Ld. Counsel appearing for the Respondent Bank submits that the Bank, does not intend to proceed against the flats regarding which NOCs has been admittedly issued, and therefore, no harm whatsoever would be caused. It is also submitted by the Ld. Counsel appearing for the Respondent Bank that it may not be feasible to approach the District Magistrate every time a flat is released on issuance of NOC and that it is for the D.R.T. as and when the S.A. is taken up hearing, to ultimately decide as to which are the flats that need to be excluded from the mortgage.

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After having heard both sides for some time, I find that the Appellant has an arguable case, though not a strong prima facie case, and therefore, I do not intend to deprive them of being given an opportunity to entertain the Appeal. The amount due is �39 Crores.

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The Appellant is, therefore, directed to pay a sum of �15 Crores as mandatory pre-deposit in two equal installments with a gap of three

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weeks each. The first instalment of � 7.50 Crores shall be paid on or before 19.09.2022 and the second instalment of �7.50 Crores shall be paid on or before 10.10.2022. In case of default in payment of any of the above-referred installments, the Appeal stands dismissed automatically.

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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, with any nationalized bank, initially for 13 months, and thereafter it will be renewed periodically.

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On deposit of the first installment within a stipulated time, the Appellants shall be entitled to stay of all further Sarfaesi measures initiated against them by the Respondent.

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With these observations, the I.A. is disposed of. The Respondent is at liberty to file a reply in the Appeals with an advance copy to the other side.

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Post on 20.09.2022 for reporting compliance concerning payment of the first instalment.

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Sd/Chairperson

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mks-8

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M/s. Raj Labdhi Infrastructures Pvt. Ltd. v. Union Bank of India (Corporation Bank)

Case brief

What is this about?

What did the court decide?

M/s. Raj Labdhi Infrastructures Pvt. Ltd. v. Union Bank of India (Corporation Bank)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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