Partly allowed

Pradeep Gordhandas Vora v. Housing Development Finance Corporation Limited

DRAT6 Apr 2022MISC APPEAL/15/2022

Case brief

AI extract

What is this about?

The Tribunal reduced the mandatory pre-deposit for misc. appeal to 25% of the due amount, up of the appellant's lack of willful default, but rejected treating High Court interim payment as a Section 18(1) deposit. A stay on SARFAESI proceedings is granted pending first installment.

What did the court decide?

Appellant directed to deposit Rs.4,78,10,369 in two installments; first installment lodged by 20.04.2022 attracts stay on SARFAESI proceedings.

Pradeep Gordhandas Vora versus Housing Development Finance… — 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. 49/2022 In Misc. Appeal No. 15/2022

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Between

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Shri. Pradeep Gordhandas Vora … Appellant/s V/s. Housing Development Finance Corporation …Respondent/s Ltd.

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This I.A. coming up for hearing before me in the presence of Ms. Ferzana Behramkamdin along with Ms. Aashi Sirohiwala, i/b M/s. FZB & Associates, Advocate for Appellant and Mr. Charles De Souza along with Ms. Mithila Damle, i/b M/s. Meraki Chambers, Advocate for Respondent.

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-: Order dated : 06/04/2022 :-

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This is an application filed for a waiver of pre-deposit u/s 18 (1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act) filed in Miscellaneous Appeal No. 15 of 2022 which challenges the impugned order of DRT-I, Mumbai, in I.A. No. 594/2021 in S.A. No. 52/2020 filed by the Appellant seeking a stay of the operation of handing over possession of his property by Tehsildar-Executive Collector, Pune, vide order dated 22.10.2021. After hearing both sides, the Ld. P.O., DRT-I, Mumbai, observed that Applicant Appellant is not entitled for interim relief and in consequence rejected it.

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Aggrieved by that order of the DRT, the Appellant instead of approaching this Tribunal by filing Appeal, approached the Hon’ble High Court of Judicature at Bombay by filing W.P. (L)

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No. 27942 of 2021, as this DRAT was not manned by a Chairperson.

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Vide order dated 02.12.2021 by way of interim relief, the Hon’ble High Court directed the Appellant to pay an amount of Rs.1 Crore to the Respondent by 04.12.2021 and on that condition deferred taking possession of Plot No. 202, Serial No. 349A, Boat Club Road, Pune, with the subject flat which was intended to be taken possession under the SARFAESI Act. The Hon’ble High Court further directed that the Respondent may hand over physical possession of Flat No. A/901/2, situated on 9^th Floor in the building named “Le Mirage”, Boat Club Road, Pune, and no further steps shall be taken by the Respondent to auction the said Flat until the next date. The Appellant herein was directed to inform the Court about his proposal to clear the outstanding dues of the Respondent. The aforesaid order was passed without prejudice to the rights and contentions of the parties. The Appellant deposited the aforesaid amount of Rs.1 Crore with the respondent and got a favourable further order of stalling further proceedings regarding his property and finally vide order dated 15.03.2022 the Hon’ble High Court disposed of the Writ Petition taking note of the fact that DRAT has started functioning. However, ad-interim relief granted on 02.12.2021 to the Appellant was extended for a period of two weeks from 15.03.2022.

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That is how the Appellant approached this Tribunal with the present Appeal. The Appellant seeks waiver of mandatory predeposit u/s 18 (1) of the SARFAESI Act and in the alternative seeks reduction of pre-deposit amount to minimum of 25% taking into account the sum of Rs.1 Crore already paid by the Appellant to the Respondent as directed by the Hon’ble High Court.

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The grounds stated by the Appellant in the Appeal and in this application are mainly that the total financial facility agreed upon by the first Respondent secured creditor was not disbursed to the Appellant who is involved in the business of constructing a project in Pune. Initially a sum of Rs.12 Crores was granted to the Appellant in two tranches and thereafter further loan of Rs.15 Crores was sanctioned but only Rs.5 Crores from out of that was

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paid till date. Remaining amount is yet to be disbursed. The Appellant states that the Respondent had without any basis declared the Account of the Appellant as Non Performing Asset (N.P.A.). The Appellant was not able to continue with the work for reason that the balance of the sanctioned debt was not forthcoming . Moreover, the pandemic also played spoilsport. The Appellant had sought for a moratorium in tune with the direction of the Reserve Bank of India, but even that was not paid any heed to by the Respondent. The Appellant, therefore, prays for indulgence of this Tribunal to take the Appeal on file by granting maximum concession possible in accordance with the statute and thereafter stall the further proceedings with regard to the secured assets. It is also submitted that the assets are more than sufficient to clear the outstanding dues.

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The Respondent would on the other hand contend that there are no bonafides on the part of the Appellant. After having received a total financial assistance of Rs.17 Crores, no sufficient progress was made by the Appellant in completing the construction of the project. The sanction of the loan was subject to the condition that substantial progress has to be made by using the amount already disbursed. It is also submitted that Appellant had defaulted payment of the amount long prior to the onset of the pandemic or the guidelines issued by the R.B.I. regarding moratorium. The Appellant, therefore, cannot take refuge under the circular of R.B.I. Demand notice was issued to the Appellant as early as on 13.03.2020. It is also submitted by the learned counsel for Respondent that the payment of Rs.1 Crores by Appellant in consequence of the order of the Hon’ble High Court is towards the outstanding amount due which has now accumulated to about Rs.20 Crores, and that the same is not towards the mandatory payment stipulated u/s 18 (1) of the SARFAESI Act and the same is explicit from the reading of the order of the Hon’ble High Court. Learned counsel appearing for Respondent, Mr. Charles De Souza also submits that the Appellant did not even take advantage of the orders of the Hon’ble High Court of Judicature at Bombay in Writ Petition (L) No. 24293 of 2021 wherein, considering the fact that the Appellant were not

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being entertained by this DRAT, the following order was made , and reads thus:-

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“11. We, accordingly, direct that if any party is desirous of challenging an order passed by any DRT situated in the State of Maharashtra before the DRAT(M), he/she/it shall be at liberty to present an appeal before the DRAT(M) together with the requisite fees irrespective of whether the period of limitation has expired or not; however, after the appeal is preferred (together with application for condonation of delay, if any, or any other application including an application for stay), the order under challenge would remain stayed from the time the appellant makes a pre-deposit of at least 25% of the debt due from him/her/it, as claimed by the secured creditors or determined by the DRT, whichever is less. Once such predeposit is made, any secured creditor or party in whose favour an order has been passed by the DRT for effecting recovery shall remain injuncted from taking any action adverse to the interest of the appellant. Such pre-deposit shall be without prejudice to the rights and contentions of the parties in the appeal before the DRAT(M). This arrangement shall continue till January 4, 2022 for the present. ”

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The learned counsel for Respondent submits that Appellant did not approach this Tribunal within the stipulated time and, therefore, the concession of getting a waiver of deposit of 25% amount due is also not available to the Appellant. He would, therefore, have to pay the mandatory amount of 50% of the amount due as per the notice u/s 13 (2) of the SARFAESI Act and deserves no indulgence.

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After having heard Ms. Ferzana Behramkamdin, Advocate for Appellant and Mr. Charles De Souza, Advocate for Respondent, and on an anxious consideration on perusal of the available records and the averments in the application, I find that it cannot be said that Appellant had wontenly defaulted payments of the dues. Partly because of the pandemic and also due to other constraints, the Appellant might have defaulted payments, but it was not deliberate default on the part of the Appellant so as to

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deprive him of the opportunity to get the Appeal admitted on minimum payment. this Tribunal, is therefore, inclined to show indulgence of reducing the amount of pre-deposit to 25% of the amount due i.e. Rs.19,12,41,477/- mentioned in the notice under S.13(2), and that 25% would come to Rs.4,78,10,369/-. The Appellant cannot insist on taking into consideration of Rs.1 Crore paid to the Respondent directly under the orders of the Hon’ble High Court because that is not a payment u/s 18 (1) of the SARFAESI Act which needs to be deposited before this Tribunal.

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In view of above, the Appellant is directed to deposit a sum of Rs.4,78,10,369/- in two equal installments of Rs.2,39,05,184/each. The first installment of Rs.2,39,05,184/- shall be deposited on or before 20.04.2022 and the second installment of Rs.2,39,05,184/- shall be deposited on or before 04.05.2022.

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On payment of the first instalment within the time stipulated, there shall be a stay of 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 21.04.2022 for reporting compliance with regard to payment of the first installment.

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Sd/Chairperson

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dpj-1

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Pradeep Gordhandas Vora v. Housing Development Finance Corporation Limited

Case brief

What is this about?

What did the court decide?

Pradeep Gordhandas Vora v. Housing Development Finance Corporation Limited

Case brief

What is this about?

What did the court decide?

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