Allowed

Ikf Technologies Ltd. and Ors. v. Uco Bank

DRAT21 Dec 2022MISC APPEAL/301/2022

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal allowed an application to waive 25% of the predeposit required under the SARFAESI Act due to appellants' financial hardship and frozen accounts. The Tribunal also reserved judgment on a separate appeal regarding denied interim relief while directing the bank to keep deposited amounts in an interest-bearing FDR.

What did the court decide?

Waiver of 25% of the remaining pre-deposit amount; direction to keep pre-deposit in an interest-bearing FDR.

Ikf Technologies Ltd. and Ors. versus Uco Bank — Arbitration | DRAT (2022)

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DEBTS RECOVERY APPELLATE TRIBUNAL, DELHI

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Misc. Appeal No.301/2022

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Arising out of TSA No.337/2022 (DRT-II, Delhi)

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M/s IKF Technologies Ltd & Anr. M/s Premium Linkers Ltd. M/s Green Open Technologies Pvt. Ltd. M/s Shree Assets Reconstructions Ltd. M/s GNG Consultants Pvt. Ltd Mr. Sunil Kuamr Goyal Ms. Anita Gupta

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....... Appellants VERSUS

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UCO Bank ....... Respondent

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Date : 21.12.2022

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CORAM : Hon’ble Mr. Justice Brijesh Sethi, Chairperson

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Appearance:

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Ms. Seema Gupta, Ld. Counsel for appellants.

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Mr. Brijesh Kumar Tamber, Ld. Counsel for respondent bank.

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Order (oral)

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I.A. No. 804/2022.

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Vide this order I shall dispose of an application filed by the appellant under Section 18(1) of SARAFAESI Act seeking waiver/reduction of predeposit to the extent of remaining 25% of the notice under section 13(2) of the Act.

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Ld. Counsel for appellant has submitted that appellants are facing severe financial hardship as there is no business activity of appellant no.1 company since

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16.04.2020 and that the office premises of the appellant no.1 company has also been trespassed by its exemployee Mr. Manoj Rungta and taken away all specific business data, office keys, financial records of the appellant no.1 company for which litigation is pending before the courts at Kolkata.

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Ld. Counsel for appellant further submits that the Securities and Exchange Board of India (SEBI) vide its order dated 10.08.2021 has attached the accounts of the appellants. The Ld. Counsel for appellant has further referred to the order of Hon’ble Supreme Court of India in Civil Appeal No.6371/2021, titled as Mukesh Kumar Goyal vs. Securities and Exchange Board of India in which the Hon’ble Supreme Court has stayed the execution, effect and implementation of the impugned orders passed by the Securities Appellate Tribunal, Mumbai. However, it is submitted that security amount is still lying with the bank and not remitted to the appellants.

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Ld. Counsel for the appellants has also relied upon Chartered Accountants’ certificate dated 21.11.2022 in which it is mentioned that no return has been filed for the financial year 2019-20 for the reason that appellant no.1 is not carrying out any major business since 16.04.2020. The CA certificate runs as follows:-

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“This is to certify that M/s IKF Technologies Ltd. Having CIN: L72200WB2000PLC111253 having Registered Office at 3^rd Floor, J-1/12, Block EP& GP, Sector-V, Salt Lake Kolkata, Parganas, West Bengal700091 was not carrying out any major operative business activities since 16.04.2020, except the transactions as

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Misc. Appeal 301/2022 – IKF Technologies Ltd vs. UCO bank 2 of 4

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against the old payables and receivables or loans and advances as outstanding as on that date, to be paid off or received in normal course of business.

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Further, The Company has not filed its Financials for the FY 2019-20 to till date and the above certification is based on the informations, facts and documents or explanations as provided to us by the management and true to our knowledge and belief.”

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Ld. Counsel for respondent bank on the other hand opposed the waiver of the 25% of pre-deposit on the ground that CA certificate cannot be relied upon because it shows only financial condition of the appellants and it has not filed return for the year 20192020. He has, thus submits that the said certificate does not help the appellant. He has further submitted that so far as orders of SEBI and order of Hon’ble Supreme Court are concerned, these documents, also do not come to the aid of the appellant.

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Ld. Counsel for the respondent bank has, thus, submitted that the present appeal is not maintainable unless the appellants make 50% pre-deposit of the amount mentioned in demand notice under Section 13(2) of the Act, since they are financially capable to make 50% of the pre-deposit.

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I have considered the rival submissions of the parties. Perusal of two letters/order (both dated 10.08.2021) written by SEBI, to State Bank of India and Union Bank of India reveals attachment of the accounts of appellants maintained with these banks. Though, the Hon’ble Supreme Court of India has stayed the order passed by Securities Appellate Tribunal, Mumbai, till the next date of hearing. However, there is no dispute

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Misc. Appeal 301/2022 – IKF Technologies Ltd vs. UCO bank 3 of 4

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regarding the fact that the amount has not been released to the appellant.

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Keeping in mind the financial condition of the appellants and the fact that appellants cannot utilize the amount lying in the accounts, this Tribunal is of the opinion that it will be in the interest of justice to waive 25% of the balance pre-deposit amount, the waiver application is, therefore, allowed. Consequently, the appeal is entertained without calling for making 25% of the remaining pre-deposit.

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Miscellaneous Appeal No. 301/2022

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This is an appeal filed by the appellant against the impugned interim order dated 15.11.2022 passed by Ld. DRT-II, Delhi in TSA No. 337/2022 whereby interim relief has been denied to the SA applicant.

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The arguments on the appeal have been heard in details for more than two hours. Judgment is reserved. It is, however, hereby clarified that confirmation of the auction proceedings to be held on 23.12.2022 will be subject to the outcome of the decision of this Tribunal in the appeal. The respondent bank is also directed to bring it to the knowledge of proposed bidders that confirmation of auction will be subject to outcome of the decision in the appeal.

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The 25% of the pre-deposit amount deposited by the appellant be kept in interest bearing FDR.

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(Justice Brijesh Sethi) CHAIRPERSON

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Misc. Appeal 301/2022 – IKF Technologies Ltd vs. UCO bank 4 of 4

Ikf Technologies Ltd. and Ors. v. Uco Bank

Case brief

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Ikf Technologies Ltd. and Ors. v. Uco Bank

Case brief

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