Disposed

M/S. Yours Ethnic Foods Pvt. Ltd. v. Icici Bank Limited

DRAT22 Nov 2022IA/557/2022

Case brief

AI extract

What is this about?

The DRTA allowed an interim application for waiver of the 50% statutory deposit required to admit an appeal against SARFAESI enforcement measures. The court fixed a fixed deposit of ₹2.50 crores in three installments, waiving the requirement to pay 50% of the alleged debt, to stay enforcement actions pending appeal.

What did the court decide?

Deposit of ₹2.50 crores in three equal installments to waive 50% security and stay SARFAESI measures pending appeal.

M/S. Yours Ethnic Foods Pvt. Ltd. versus Icici 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

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I.A. No. 557/2022 (WoD)

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In Appeal on Diary No. 1108/2022

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Between

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M/s. Yours Ethnic Foods Pvt. Ltd. … Appellant/s V/s. ICICI Bank Ltd. …Respondent/s

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Mr Rajesh Nagory, i/b Mr D. D. Chauhan, Advocate for Appellant. Mr J. Shah along with Mr Aditya Deolekar, Advocate for Respondent.

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-: Order dated: 22/11/2022:-

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This is an application for waiver of deposit filed under Sec. 18 of the SARFAESI Act. The Appeal impugns the order of the D.R.T.- I Ahmedabad in S.A. No. 289/2022 dated 14.10.2022 wherein the interlocutory prayer for stay of the Sarfaesi measures initiated by the first Respondent Bank against the Appellants was declined to be granted in their favour and hence, this Appeal.

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In the S.A., the Appellants have challenged the classification of debt as NPA and have also raised objections regarding certain facilities subsequently advanced to the Appellants as not being secured debt and hence, those facilities which were advanced as a special concession during the Covid period could not be added on the debt which was due from them on the secured assets. The Ld. Presiding Officer refused to accept the contention raised and hence, the prayer for stay was declined.

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The Respondent Bank opposed the application for waiver stating that the Appellants are not entitled to any indulgence and that for entertaining the Appeal, they need to pay 50% of the amount due. As per Sec. 13(2) notice, the Appellants were asked to pay a sum of ₹6,38,53,840.05 as of 31.05.2021. In the reply filed by the Respondent Bank, the amount due together with interest as of the date of filing the Appeal has not been detailed and hence, this Tribunal is at loss to get sufficient material to calculate the amount actually due from the Appellant as on the date of filing the Appeal. Making a rough estimate, the amount would definitely be closer to ₹7 crores

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The Appellants have not pleaded any financial strain but they have pleaded to have a good prima facie case. Since there is no financial strain pleaded and proved by the Appellants, they are not entitled to get the amount reduced to 25% by this Tribunal exercising its discretion under the third proviso to Sec. 18(1) of the SARFAESI Act. However, considering that they have an arguable prima facie case which has been submitted, I do not insist on payment of 50% of the amount, the Appellant are, therefore, directed to deposit a sum of ₹2.50 crores in three equal instalments. The Ld. Counsel appearing for the Appellants undertakes to pay ₹50 lacs by 25.11.2022 and the balance amount shall be deposited in three equal instalments. The first instalment of ₹66,66,667/- shall be paid on or before 13.12.2022, the second instalment of ₹66,66,667/shall be paid on or before 03.01.2023, and the third instalment of ₹66,66,666/- shall be paid on or before 24.01.2023. In default, the

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

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On deposit of the amount, the Appellants shall be entitled to get further Safreaesi measures stalled till the disposal of the Appeal.

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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 28.11.2022 for reporting compliance concerning the payment.

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Sd/Chairperson

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mks-05

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M/S. Yours Ethnic Foods Pvt. Ltd. v. Icici Bank Limited

Case brief

What is this about?

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M/S. Yours Ethnic Foods Pvt. Ltd. v. Icici Bank Limited

Case brief

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M/S. Yours Ethnic Foods Pvt. Ltd. versus Icici Bank Limited