Dismissed

Nitin Gupta and Ors. v. Reliance Commercial Finance Ltd. and Ors.

DRAT29 Aug 2022MISC APPEAL/197/2022

Case brief

AI extract

What is this about?

An appeal against a Debt Recovery Tribunal order permitting possession of agricultural land. The Appellate Tribunal dismissed the appeal for non-payment of the mandatory 50% pre-deposit required under Section 18 of the SARFAESI Act. The court granted directions that possession taken pending the stay can be reverted if the deposit is later made.

What did the court decide?

The appeal was dismissed for want of pre-deposit of 50% under Section 18 of the Act. Liberty was granted to revive the appeal if the pre-deposit is made.

Nitin Gupta and Ors. versus Reliance Commercial Finance… — Insolvency and Bankruptcy | DRAT (2022)

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DEBTS RECOVERY APPELLATE TRIBUNAL, DELHI

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Misc. Appeal No.197/2022 Arising out of S.A. No.127/2021 (DRT-III, Delhi)

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Nitin Gupta & Ors. Vs.

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Reliance Commercial Finance Ltd.

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29.08.2022 Hon’ble Mr. Justice Brijesh Sethi

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Present : Mr. Rajiv Bajaj, Ld.. counsel for the appellant

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Mr. Lalit Kumar Sharma, Ld. counsel for respondent FI

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This matter has taken up through Video Conferencing upon being mentioned by the learned counsel for the appellant in view of the urgency that the possession of the property is going to be taken over today.

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ORDER (ORAL)

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Vide this order, I shall dispose of this appeal filed under Section 18 of the SARFAESI Act against the order dated 26.08.2022 passed by the learned DRTIII, Delhi, which runs as under:-

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“Present : Mr. Rajiv Bajaj, Ld. counsel for S. Applicants.

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Mr. Arvind JKadon, Ld. counsel for respondent no.1 FI.

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1. Due to COVID 19, this matter is taken up by this Tribunal through Video Conferencing.

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2. Reply to IA No.1530/2022 has already been filed on behalf of respondent no.1 FI.

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3. Ld. counsel for respondent no.1 FI submitted that he has also filed copy of Land Status Report along with reply of IA no.1530/2022 wherein it is clearly stated that property-in question is not an agricultural land. He further submitted that S. Applicant has not given copy of SA to respondent no.1 FI.

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4. Record reveals that notice on this SA were issued vide order dated 23.07.2021, however, S. Applicants have not filed proof of service till date. In these circumstances, this tribunal is of the view that S. Applicants are not prosecuting the case diligently, hence, S. Applicants are not entitled for any interim passed by this Tribunal is hereby vacated. However, after examining the documentary evidence placed by both the parties, this Tribunal may pass order under Section 17(3) of SARFAESI Act, if any procedural latches is found during measures taken by the

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-: 2 :-

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respondent bank / FI under SARFAESI Acrt and Rules made thereunder.

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5. Now the matter stands adjourned to 19.09.2022 for hearing on this SA along with IA No.1530/2022 and the date already fixed i.e. 29.08.2022 is hereby cancelled. In the meantime, respondent no.1 FI is directed to file its reply enclosing all the documentary evidence required to prove the right and justified action taken by the Bank / FI in accordance with SARFAESI Act ie.

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(i) loan agreement,

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(ii) sanction letter,

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(iii) statement of account,

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(iv) proof of the NPA classification,

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(v) demand notice sent to applicant under Sectiion 13(2) of SARFAESI Act with proof of its service under Rule 3(1) or proviso to Rule 3(1) of Security Interest (Enforcement) Rules 2002,

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(vi) objections/ reply received from applicant under Section 13(3A) along with reply of bank / FI with proof of service, if any,

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(vii) notice u/s 13(4) Act read with Rule 8 of three modes in terms of Rule 8(1) & (2) of Security Interest (Enforcement) Rules 2002

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(vii) Order obtained u/s 14 of SARFAESI Act,

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(viii) notice issued by court receiver along with proof of service,

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in accordance with Bankers’ Books Evidence Act,, without fail before next date fixed.

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6. S. Applicant is also directed to file its documentary evidence, in accordance with Bankers’ Books Evidence Act, without fail before next date of hearing.

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7. It is expected from both the parties that they shall place on record their respective documents relied upon by them before next date fixed failing which adverse inference may be drawn by this Tribunal.”

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The learned counsel for the appellant has made an interim prayer as under:-

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“In view of the aforesaid, the Appellant prays for the following

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reliefs:-

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(a) That the operation of Order dated 28.08.2022 in S.A. 127/2021 titled as Nitin Gupta & Ors. vs. Reliance Commercial Finance Ltd” be stayed and operation of the

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-: 3 :-

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Order dated 17.08.2022 in S.A.. 127/2021 may be restored during the pendency of the accompanying Appeal.

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(b) Such other and further order(s) that this Hon’ble Appellate Tribunal may deem fit and proper in the facts and circumstances in the instant case and as warranted in the interest of justice.”

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The appellant has challenged the order on the ground that the respondent bank cannot take possession of the lands the same being agricultural. He has further submitted that the respondent has already initiated arbitration proceedings to recover the loan amount and, therefore, the possession of the property cannot be taken over now. Learned counsel for the appellant submits that the learned DRT had granted stay vide its order dated 17.08.2022, which runs as follows:-

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Present : Mr. Karan Prakash, Ld. counsel for S. Applicants

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1. Due to COVID 19, this matter is taken up by this Tribunal through Video Conferencing.

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2. In the present matter, IA bearing no.1530/2022 has been filed on behalf of S. Applicants praying therein for urgent hearing and to restrain the receiver Smt. Alka Arya and the respondent from taking actual physical possession of the property being Agricultural Land area measuring 1 bigha out of khasra no.50/18/2 Min (1-00), situated in the revenue estate of Village Mundka, New Delhi – 110041 till the pendency of this SA.

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3. Issue notice on IA No.1530/2022 to the other sides by all prescribed modes including the registered post as well as email/whatsapp etc. Due to Covid-19 circumstances, the Registry shall forward the notice to the Ld. counsel for applicant in IA for onward service to the other side. After service, the counsel for applicant in IA shall file affidavit of service in the Registry.

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4. Now the matter stands adjourned to 29.08.2022 for reply and hearing on IA No.1530/2022. In the meantime, respondent bank/FI is directed to adhere to the provisions of Section 17(4) of SARFAESI Act in its letter and spirit and hold its hands till the entitlement of taking recourse to one or more of the measures specified under section 13(4) of SARFAESI Act under SARFAESI Act till next date of hearing.”

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-: 4 :-

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Learned counsel further submits that when the impugned order was passed subsequent to the above order, he was not even present but his presence has been marked wrongly. He further states that he has filed his affidavit to this effect as well.

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Perusal of the affidavits in support of this appeal, however, shows that the same have not been attested/ authorised.

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Learned counsel for the respondent has appeared. He submits that the lands in question are not agricultural. The same already stands converted to commercial vide notification dated 07.09.2007. The loan facility in this case was extended sometime in the year 2017.

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In view of the above facts appearing on record, the appellant had to make pre-deposit. He has to make pre-deposit of 50% as per Section 18 of the Act. Since the appellant has not make any pre-deposit, the appeal is liable to be dismissed as not entertainable. Accordingly, the appeal is dismissed as such for want of pre-deposit. It is, however, made clear that the appeal will be revived in case the appellant makes pre-deposit of 50% per Section 18 of the Act and file suitable application for revival of the same.

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Learned counsel for the appellant states that the bank is going to take possession of the property today. This Tribunal is of the opinion that even if the bank takes possession of the property in question today, it can be reverted back in case appellant makes out a case after pre-deposit is made.

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( CHAIRPERSON )

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-pk

Nitin Gupta and Ors. v. Reliance Commercial Finance Ltd. and Ors.

Case brief

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What did the court decide?

Nitin Gupta and Ors. v. Reliance Commercial Finance Ltd. and Ors.

Case brief

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What the court decided

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