Disposed

M/s Balaji Mobile Shoppe v. Shriram Urban co-op Bank Limited

DRAT10 Nov 2022IA/553/2022

Case brief

AI extract

What is this about?

Appeal against dismissal of SARFAESI sale challenge denied. Tribunal directs appellant to deposit ₹35 lacs as pre-deposit to stay further proceedings against property sold in auction. Failure to deposit within three weeks results in dismissal of appeal.

What did the court decide?

Stay of proceedings against auction property upon deposit of ₹35 lacs; dismissal upon default.

M/s Balaji Mobile Shoppe versus Shriram Urban co-op Bank… — Company and Corporate | 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. 553/2022 (WoD) In Appeal on Diary No. 1066/2022

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Between

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M/s Balaji Mobile Shopee

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Through its Proprietor, Shri Pravin S/o Madanmohan Mishra

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… Appellant/s

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V/s.

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The Authorized officer, Shriram Urban Cooperative Bank Ltd. & Anr.

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…Respondent/s

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Mr R.H. Chandurkar, Advocate for the Appellant.

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-: Order dated: 10/11/2022:-

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The Appellant is in appeal impugning the judgment dated 06.10.2022 in S.A. No. 174/2019 on the files of the Debts Recovery Tribunal, Nagpur wherein the S.A. filed by the Appellant was dismissed. The Appellant had in the S.A. challenged the Sarfaesi measures starting from the notice issued under Sec. 13(2) and the subsequent measures also. That apart, the Appellant had also taken up a contention that there were three loan facilities taken by the Appellant and others consisting of a housing loan, a business term loan and a cash credit facility. The notice under Sec. 13(2) dated 22.05.2018 does not give a breakup of each of these loans and the principal amounts as well as interest due on those

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amounts. A total sum of ₹48,79,554 has been claimed as of 31.03.2018 together with interest.

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During the pendency of the S.A., the Appellant had filed an application for staying the Sarfaesi measures which have reached the stage of the sale. The Ld. Presiding Officer had on 14.11.2019 made an order to stay the Sarfaesi measures on condition of payment of ₹12 lacs to the first Respondent. The Appellant has complied with the said order. The property was by then already sold in an auction that took place on 13.11.2019 and purchased by the second Respondent. The sale certificate is yet to be issued, and nor was the sale confirmed. However, in the interregnum period, it appears that the sale certificate has been issued subsequent to confirmation of sale which tantamounts to contempt of the order of DRT granting a conditional stay in favour of the Appellant. The Appellant had also taken up the matter before the Hon’ble High Court of Judicature at Bombay before the Nagpur Bench, in which directions were given to dispose of the S.A. expeditiously. In consequence to that, the S.A. was disposed of on 06.10.2022. The Ld. Counsel for the Appellant submits that apart from the contentions raised and decisions relied upon by both sides, no discussion has been made by the Ld. Presiding Officer in the impugned Judgment. It is a cryptic judgment wherein, the only consideration appears in para 14 which states that considering the submissions on both sides and material placed on record, I do not find any merit in the present application. Accordingly, the same is hereby disposed of. The Ld. Counsel is aggrieved with the non-speaking order and that the contentions raised

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by the Appellant have not been addressed or answered. Hence, he is in appeal.

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Being an appeal is filed under Sec. 18 of the SARFAESI Act, the Appellant has to comply with the mandatory provisions under the second proviso to Sec. 18(1). The amount claimed as per the notice under Sec. 13(2) is ₹48,79,554/- as of 31.03.2018 and the reply filed by the Respondent to the S.A. on 04.12.219 states that the amount due as of date is ₹65 lacs. It is submitted that the sum of ₹12 lacs which has been deposited as a condition to obtain a stay has not been deducted from the amount due deducting that amount would bring the due to ₹53 lacs. Some interest also may be due.

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The Respondent did not appear despite being served with notice and hence no reply is also filed. Considering the rate of interest that the amount as of the date of filing the Appeal would be approximately ₹75 lacs The Appellant has not pleaded any financial strain. The Appellant is willing to deposit the amount ordered by this Tribunal. Taking the facts and circumstances of the case into consideration and the prima facie case that has been made out, I direct the Appellant to deposit a sum of ₹35 lacs within three weeks as pre-deposit. 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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On deposit of the amount, there shall be a stay of the further proceedings with regard to the property and the second Respondent who is the auction purchaser and in possession of the property shall not create any third-party interest.

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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 02.12.2022 for reporting compliance concerning the payment.

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Sd/Chairperson

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mks-05

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M/s Balaji Mobile Shoppe v. Shriram Urban co-op Bank Limited

Case brief

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M/s Balaji Mobile Shoppe v. Shriram Urban co-op Bank Limited

Case brief

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