Allowed

Ashwin Mankeshwar v. Kotak Mahindra Bank Limited

DRAT27 Oct 2022IA/547/2022

Case brief

AI extract

What is this about?

The appellate tribunal disposed of an appeal regarding the dismissal of an application for extension of time to pay pre-deposit under Section 18(1) SARFAESI Act. The court fixed a reduced deposit amount and details for installment payments to stay enforcement proceedings.

What did the court decide?

Deposit of Rs. 2 Crores in specified installments to stay further proceedings under the SARFAESI Act; default leads to dismissal of the appeal.

Ashwin Mankeshwar versus Kotak Mahindra Bank Limited — Banking and Recovery | DRAT (2022)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson I.A. No. 547/2022 (WoD)

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Appeal on Diary No. 1095/2022

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Between

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Mr Ashwin Ramesh Mankeshwar & Ors. … Appellant/s V/s.

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The Authorized Officer, … Respondent/s Kotak Mahindra Bank Ltd.

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Mr Atul Pande, Advocate for Appellant.

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Mr Raju Shinde along with Nishi Gandha and Ms Shweta Kamath (Authorized Officer- Chief Manager), Advocate for Respondent Bank.

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-: Order dated: 27/10/2022:-

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The matter is taken up for hearing by way of Praecipe filed by the Appellants seeking urgent relief.

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The Appellants are in the Appeal impugning the order dated 14.10.2022 in I.A. No. 1884/2022 in S.A. No. 223/2022 on the files of the D.R.T., Nagpur. The grounds raised in the S.A. are various starting from the classification of the debt as NPA when there was the order of the Hon’ble Supreme Court prohibiting the classification of debt during the Covid-19 Pandemic as NPA.

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The Appellant has also challenged three different applications filed by the first Respondent Bank before the District Magistrate and 1

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C.J.M- Nagpur u/s 14 of the SARFAESI Act for taking possession of the property without mentioning the pendency of the earlier application u/s 14 and has obtained the wrongful orders on those applications for taking possession.

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When the possession was scheduled to be taken on 13.10.2022 the Appellants approached the D.R.T. with I.A. No 1877/2022 for stalling the same. Undertaking to deposit a sum of ₹50 lakh forthwith. Accepting the proposal made by the Appellants, the learned Presiding Officer granted the interim stay from taking possession of the property subject to a deposit of ₹ 50 lakh on the following day. However, the Appellants could not deposit the said amount due to some technical reasons which delayed the transfer of the said amount from the U.S.A to the Appellant. Hence, the Appellant filed I.A. No. 1884/2022 on 14.10.2022 for an extension of time till 17.10.2022. In order to show the bonafide of the applicant the photocopy of the cheque for ₹ 25 lakh was also produced.

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However, the learned Presiding Officer was not enthused by the submission made by the Appellants and in consequence, dismissed the application for an extension of time. Aggrieved by that order the appellants are in Appeal.

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Heard the learned counsel for the Appellants and the counsel appearing for the Respondent Bank. The learned counsel appearing for the Respondent Bank submits that the classification of the debt

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as NPA and the consequent issuance of notice u/s 13 (2) are in consonance with the order of the Hon’ble Supreme Court. Moreover, it is also stated that in the subsequent application filed before the C.J.M u/s 14 the withdrawal of the earlier application before the District Magistrate has been specifically mentioned in the affidavit which was produced. It is submitted by the learned counsel appearing for the Respondent Bank that all those matters regarding the insufficiency of the Sarfaesi measures initiated by the Respondent Bank will have to be considered and decided in the S.A. which is still pending. It is submitted that the Appellants had themselves offered to deposit the sum of ₹ 50 lakh and failed to deposit the same. When outstanding amount at that point in time was ₹4.43 Crores. It was not the Presiding Officer who suggested the deposit of the amount. It was volunteered by the Appellant. Yet, they failed to pay the amount. Under the circumstance, the learned Presiding Officer had rightly rejected the prayer for an extension of time to deposit the amount.

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The learned counsel appearing for the Appellant would also contend that the application before the District Magistrate and the C.J.M were filed against a dead person name Jayant Mankeshwar. In the S.A. which was pending at the time of filing the third application u/s 14, there was already a pleading in the application to the effect that one of the debtors and owner of the property had died. In spite of that, the application is removed against the dead person. That is

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also a ground that has been taken for the setting aside of the Sarfaesi measures.

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After having heard the submission made on both sides. I find that a learned counsel appearing for the Respondent has now submitted a reply which indicates that the outstanding amount to be paid by the Appellants is ₹4.48 Crores and there is no reason for reduction of the amount exercising Jurisdiction of this Tribunal under the 3rd proviso section 18 (1) of the SARFAESI Act.

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The Appellants have taken up several inadequacies regarding the classification of the debt as NPA as also the notice u/s 13 (2) it is also pointed out that they had sent a reply to the notice received u/s 13 (2) in which they have not mentioned that the dead person who is one of the borrowers, is the brother of one of the Appellants. The learned counsel appearing for the Respondent in reply submits that if the Appellants had mentioned the death of one of the borrowers in their reply to notice under Sec. 13(2), he would not have been impleaded as a party in the application before the C.J.M.

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The pre-deposit u/s 18 (1) is mandatory. The Applicant has come up with several allegations which have to be decided in the S.A. before the D.R.T. I am not delving deep into those merits of the matter because this is an application for waiver and any decision taken on those aspects would have binding effects on the matter before D.R.T. Therefore I am leaving those questions to be decided by the learned Presiding Officer in the S.A. which is pending

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consideration. Nevertheless, the Appellants have made out the case though not well satisfactory to pursue the S.A. before the D.R.T. Considering the fact that the Appellants have not pleaded regarding their financial hardships to pay the amount, they cannot be granted any concession under the third proviso to Section 18 (1). 50% of the amount claimed would come to ₹ 2.24 Crores.

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I do not insist on the payment of the above-mentioned amount and direct the Appellant to pay the amount of ₹ 2 Crores. The learned counsel appearing for the Appellant offered to deposit the amount of ₹ 37 lakhs today by way of a Demand Draft. The balance amount shall be paid within a period of four weeks in two equal instalments. The first instalment shall be paid within three weeks, on or before 17.11.2022 and 2^nd instalment shall be paid within one week, on or before 24.11.2022. 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, with any nationalized bank, initially for 13 months, and thereafter to be renewed periodically.

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On deposit of the payment within the stipulated time, all further proceedings to be initiated by Respondent under the SARFAESI Act shall stand stayed.

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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 18.11.2022 for reporting compliance concerning the 1^st instalment.

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Sd/Chairperson

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psa-02

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Ashwin Mankeshwar v. Kotak Mahindra Bank Limited

Case brief

What is this about?

What did the court decide?

Ashwin Mankeshwar v. Kotak Mahindra Bank Limited

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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