Partly allowed

Reliable Polyesters Private Ltd. v. Bank of Baroda

DRAT21 Apr 2022MISC APPEAL/14/2022

Case brief

AI extract

What is this about?

The Tribunal disposed of an appeal challenging a refusal to stay SARFAESI proceedings for possession of secured property. The court directed the appellants to deposit Rs. 25 Lakhs in two tranches to obtain a stay, rejecting requests for a waiver of the pre-deposit provision.

What did the court decide?

Stay on further proceedings under the SARFAESI Act granted subject to deposit of Rs. 25 Lakhs in the Tribunal's registry in two tranches.

Reliable Polyesters Private Ltd. versus Bank of Baroda — 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. 82/2022 (WoD)

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Misc. Appeal No.24/2022

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Between

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M/s. S. K. Timber, Through its proprietor, … Appellant/s Shri. Ajay S/o Subhashchandra Mehta & Anr. V/s.

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Canara Bank, Through its Authorized Officer, …Respondent/s Nagpur.

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Mr. Radhe Agrawal, i/b M/s. Radlaw Associates, Advocate for Appellants.

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Mr. Vivek Sawant, Advocate for Respondent Bank.

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-: Order dated : 21/04/2022 :-

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This is an application for waiver of pre-deposit u/s 18 of the SARFAESI Act.

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Heard the learned counsels for Appellants and Respondent.

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The Appellants have come up with this Appeal challenging the order in I.A. No. 119/2022 in S.A. No.39 of 2022 on the file DRT, Nagpur, which was filed for stalling the proceeding pertaining to taking over the possession of the secured property belonging to the Appellants. The Appellants sought for stay, but vide impugned order the learned P.O., DRT, Nagpur, refused to grant stay, therefore, Appellants are in Appeal before this Tribunal.

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The learned counsel for the Appellants states that they have already paid a sum of Rs.25 Lakhs to the Bank directly and thereafter because of financial constraints they could not pay any further amount. The total amount, as demanded in notice dated

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28.04.2021 issued u/s 13 (2) of SARFAESI Act, is Rs.82.99 Lakhs which is rounded to Rs.83 Lakhs. Admittedly, the Appellants have paid Rs.25 Lakhs and, therefore, now the recoverable amount from the Appellants comes to Rs.58 Lakhs.

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Ld. Counsel appearing for the Respondent Bank submits that earlier the Appellants have issued two post dated cheques for Rs.35 Laksh each towards the settlement of the amount due from them, but the first cheque was dishonoured, hence the second cheque has not yet been presented. Hence, the amount which is shown u/s 13(2) notice, after deducting the Rs.25 Lakhs paid directly to the Bank, is still due from the Appellants. The Appellants state that they have been charged interest at higher rate and the Bank has been taken coercive steps in order to extract money from them and actually the amount due from them is much less.

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At this juncture, it is not possible to conclude as to what is the exact amount due from the Appellants and calculation will have to be made regarding the same, for which detailed calculations may be required to be carried out. There is no material available before this Tribunal as to know other circumstances and it has to be presumed that a sum of Rs.58 Lakhs along with interest thereon is due from the Appellants. Learned counsel for Appellants prays for indulgence of reducing the amount of pre-deposit to 25% of Rs.58 Lakhs.

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The learned counsel appearing for Respondent Bank submits that no indulgence may be shown as the Appellants are chronic defaulters and they have duped the Bank by issuing the cheques which have not been honoured.

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After hearing both sides, I find that Appellants are liable to deposit a sum of Rs.25 Lakhs in two tranches. The first tranche of Rs.12.50 Lakhs shall be deposited within a week i.e. on or before 28.04.2022 and the balance amount of Rs.12.50 Lakhs shall be deposited within further three weeks i.e. on or before 19.05.2022. Default in payment of the first tranche would result in the Appeal being dismissed.

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In case the first tranche is paid within the time stipulated, there shall be a stay on further proceedings with regard to the subject property under the SARFAESI Act.

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The above amount shall be deposited in the form of a Demand Draft with the Registrar of this Tribunal. Failure to deposit the above referred amount would result in an automatic dismissal of the Appeal.

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As and when the said amounts are deposited, it shall be invested in term deposits in the name of Registrar, DRAT, Mumbai, with any nationalized bank, initially for a period of 13 months and thereafter it will be renewed periodically.

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Post on 29.04.2022 for reporting compliance with regard to payment of the first tranche.

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Sd/Chairperson

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dpj/mks-8

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Reliable Polyesters Private Ltd. v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

Reliable Polyesters Private Ltd. v. Bank of Baroda

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

All orders in this case

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