Disposed

Shri Baburaoji Raibhanji Nighot v. Dr. Punjabrao Deshmukh Urban Co-Operative Bank Ltd.

DRAT25 Nov 2022IA/601/2022

Case brief

AI extract

What is this about?

During an appeal regarding an SARFAESI Act pre-deposit waiver, the Tribunal found a prima facie case of insufficient notice but rejected a total waiver. It directed a partial deposit, granted an interim stay against further measures, and mandated reporting of deposit compliance.

What did the court decide?

Directed to deposit ₹15,00,000/-; interim stay on further SARFAESI measures granted pending payment; appeal dismissed for default.

Shri Baburaoji Raibhanji Nighot versus Dr. Punjabrao Deshmukh… — 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. 601/2022 (WoD)

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In Appeal on Diary No. 1275/2022

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Between

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Shri Baburaoji D/o Raibhanji Nighot & Anr. … Appellant/s V/s.

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Dr. Punjabrao Deshmukh Urban Co-operative …Respondent/s Bank Ltd.

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Mr. Kulin N. Shah, Advocate for Appellants.

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Mr. R. K. Thakker, Advocate for Respondent No.1.

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-: Order dated: 25/11/2022:-

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Heard the Ld. Counsel for the Appellant and the Counsel for the Respondent in this application for the waiver of deposit u/s. 18 (1) of the SARFAESI Act. The Appellant has filed an S.A. u/s. 17 of the SARFAESI before the D.R.T., Nagpur with a delay of 135 days for which he filed M.A. 91/2022, and the delay was condoned. The S.A. is yet to be taken on file. He also had filed I.A. No. 2017/2022 for a stay preventing the taking over of the physical possession of the secured assets in compliance with the order u/s 14 of the SARFAESI Act. He had offered to pay ₹ 4,00,000/- immediately and thereafter amounts were agreed to be paid by him in instalments. However, vide the impugned order dated 22.11.2022 the Ld. Presiding Officer refused to grant a stay in favour of the Applicant. He is aggrieved and hence, the appeal.

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The Appellant has challenged the Sarfaesi measures on various grounds. It is stated that NPA was not classified properly because in the notice purportedly issued by the Respondent Bank u/s 13(2) of the SARFAESI Act demanding a sum of ₹ 31,56,317/- there is no date of classification of the NPA shown. It is essential that there must be a continuous default for 90 days for a loan to be declared as NPA. Since the date is not shown, it is not clear on which date the default was committed by the Appellant. Further, it is stated that the mandatory provisions u/s 13 (3) have not been complied with as the demand is for an aggregate amount, and there is no break up of the principal and interest that has been charged on the loan detailed in the demand notice.

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The Appellant states that in view of the judgment of the Hon’ble High Court of Gujarat in Punjab Nation Bank vs. Mithilanchal Industries Pvt. Ltd. 2020 SCC Online Guj 3441 the notice is bad in law. It is also stated referring to the loan agreement and the other documents produced that there is confusion regarding the rate of interest. The original sanctioned letter states that the rate of interest would be 13.5% subject to the RBI rate and in the account statement the interest is calculated @ 12.5% initially and towards the end, it is calculated @ 13.5%. With effect from which date the interest has been enhanced to 13.5 % is not detailed. Therefore, there is a whole lot of confusion regarding the amount that is claimed. The Respondent has claimed a total amount of ₹ 48,08,002/- as due on the date of filing of the appeal but that calculation is challenged by the Appellant.

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Moreover, it is also contended that the notice u/s. 13 (2) has not

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been properly served on the Appellants and therefore, they could not give a reply to or respond to it. Furthermore, the Appellant challenges the proceedings u/s. 14 of the SARFAESI Act before the District Magistrate. It is stated that the nine pointer Affidavit which is mandatory has not been complied with. Under these circumstances, the entire Sarfaesi measures are defective and cannot be proceeded with.

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

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The Counsel for the Respondent submits that the Appellant has himself given a statement of account with interest @ of 12.5% and 13.5% and therefore, there is no confusion regarding the amount or the interest that is due from him. It is also stated that the Appellant has received the notice and has not responded to it and therefore, he has waived the right to challenge the notice. It is submitted that the acknowledgement pertaining to the serving of notice u/s. 13(2) has been produced before the D.R.T. and it would be borne out that the allegations made are not true. The challenge to the proceeding before the District Magistrate is also not sustainable. 7. After having heard on both sides and on going through the material available, I find that the Appellant has made out the prima facie case regarding the notice being insufficient. However, the Respondent will have to prove that there was a waiver of statutory provisions, and that notice has been properly served, for which, materials will have to be produced before the D.R.T. and considered on merits.

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The first Appellant states that he is a senior citizen and his wife

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is also a senior citizen and the second Appellant is his son who is a Doctor by profession. The second Appellant is the son of the first Appellant and it is submitted that the Appellant is under financial strain because of the post-pandemic condition and being out of business. After having considered the entire facts and circumstances of this case, I find that the Appellant has made out the prima facie case even though the financial strain has not been proved to the satisfaction of this Tribunal. The amount that is due as of the date of filing of this appeal is little more than ₹ 48,00,000/- the correct amount cannot go into the now due to lack of material and that will also have to be considered by the D.R.T. while considering the S.A.

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The Appellant is, therefore, directed to deposit a sum of ₹ 15,00,000/- as pre-deposit u/s 18(1) of the SARFAESI Act. The Ld. Counsel appearing for the Appellant submits that he is producing a Demand Draft of ₹ 5,00,000/- today. The same shall be accepted. The balance amount of ₹ 10,00,000/- shall be deposited within four weeks. There shall be an interim stay of further Sarfaesi measures initiated against the Appellant. In default of payment, 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 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 26.12.2022 for reporting compliance.

Sd/-

Chairperson

rm-07

Shri Baburaoji Raibhanji Nighot v. Dr. Punjabrao Deshmukh Urban Co-Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

Shri Baburaoji Raibhanji Nighot v. Dr. Punjabrao Deshmukh Urban Co-Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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