Partly allowed

Mr K Nagarajan v. Tamilnad Mercantile Bank Limited

DRAT17 Nov 2022REGULAR APPEAL/48/2022

Case brief

AI extract

What is this about?

The Tribunal allowed waiver applications, admitted the appeals, and fixed a reduced statutory deposit of 25% (Rs. 15,94,638/-) under Section 18(1) of the SARFAESI Act, 2002, considering the appellant had deposited a substantial sum under interim directions which remained unappropriated by the bank.

What did the court decide?

The appellant directed to deposit Rs. 15,94,638/- before the Registrar and register the appeals.

Mr K Nagarajan versus Tamilnad Mercantile Bank Limited — Company and Corporate | DRAT (2022)

¶1

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

¶2

IA 467/2022 In A.IR:391/2022

¶3

K.Nagarajan V/S A.O.,Tamilnad Mercantile Bank Ltd & Anr

¶4

17/11/2022

¶5

IA 467/2022 (Urgent) in AIR 391/2022: Mr. K. N. Chinnakrishnan, Advocate filed Vakalat for 1^st Respond Bank.

¶6

This Application is filed by Petitioner/Appellant for hearing of Waiver Application on an urgent basis.

¶7

Heard both sides.

¶8

Considering the reasons stated in the Affidavit filed in support of Petition, IA 467/2022 is allowed.

¶9

IA 466/2022 (Waiver) in AIR 391/2022:

¶10

Mr. K. N. Chinnakrishnan, Advocate filed Vakalat for 1^st Respond Bank.

¶11

This Application is filed by Petitioner/Appellant for hearing of Waiver Application on an urgent basis.

¶12

Heard both sides.

¶13

Considering the reasons stated in the Affidavit filed in support of Petition, IA 467/2022 is allowed.

¶14

IA 467/2022 (Urgent) in A.IR:391/2022 and IA 469/2022 (Urgent) in A.IR:393/2022 are allowed and Waiver Applications are taken up.

¶15

These two Appeals, viz., A.IR:391/2022 and A.IR:393/2022 are filed against Orders dated 13.10.2022 of DRT, Coimbatore in SA 432/2021 and SA 420/2021, respectively.

¶16

It is represented that SA 432/2021 is filed challenging Section 14 proceedings and SA 420/2021 is filed to set aside Sale Certificate.

¶17

IA 466/2022 in A.IR:391/2022 and IA 468/2022 in A.IR:393/2022, respectively are filed seeking waiver of statutory deposit required under Section 18 (1) of SARFAESI Act, 2002, for entertaining the Appeals.

¶18

Heard both sides.

¶19

Learned Advocate for Petitioner/Appellant submitted that Appellant deposited entire outstanding as per interim directions given by Tribunal below, and the same is lying with 1^st Respondent Bank. It is further submitted that as main SAs are dismissed, these two Appeals are filed. Further, Petitioner/Appellant would contend that as entire amount is deposited, there is no debt due, and therefore, Petitioner/Appellant need not deposit any amount.

¶20

On the other hand, Learned Advocate for 1^st Respondent Bank submitted that amount deposited is only as per interim directions of Tribunal below, and accounts are closed only by appropriating money deposited by Auction Purchaser, and not by appropriating money deposited by Petitioner-borrower, which money is still lying with 1^st Respondent Bank, and as money deposited by Petitioner-borrower is not appropriated towards loan accounts, Petitioner/Appellant has to deposit the amount claimed in Notices issued under Section 13 (2) of SARFAESI Act, 2002, for entertaining the Appeals.

¶21

As per Section 18(1) of SARFAESI Act, 2002, for entertaining the Appeal, Petitioner/Appellant, being borrower, has to deposit 50% of debt due or the amount claimed by Secured Creditor. Here, the claim of Secured Creditor is indicated in Section 13 (2) Notices dated 30.03.2019; for first loan account Rs.37,54,641.88 and for second loan account Rs.26,23,909.82p, thus, totaling to Rs.63,78,551.70p.

¶22

According to Section 18(1) of SARFAESI Act, 2002, Tribunal is vested with power to reduce the statutory deposit from 50% to 25%, by recording the reasons. Here in this case, as borrower appears to have deposited Rs.65 Lakhs and odd, as per the interim directions of Tribunal below, and that amount is still lying with 1^st Respondent Bank, which is not appropriated towards loan accounts, I deem it appropriate that statutory deposit can be reduced to 25%.

¶23

For the reasons stated above, Petitioner/Appellant shall deposit 25% of total amount of Rs.63,78,551.70p, which comes to Rs.15,94,638/-.

¶24

Learned Advocate for Petitioner/Appellant submitted that he is ready with Demand Draft for the said amount.

¶25

In view of the readiness of Petitioner/Appellant to deposit amount indicated above, he shall deposit the same before Registrar and Office to receive the same, and invest it in a Nationalized Bank for a reasonable period and renew it periodically, till further orders are passed.

¶26

As condition of Section 18(1) of SARFAESI Act, 2002, is complied, register the Appeals, if it is otherwise in order.

¶27

Sd/Chairperson

Mr K Nagarajan v. Tamilnad Mercantile Bank Limited

Case brief

What is this about?

What did the court decide?

Mr K Nagarajan v. Tamilnad Mercantile Bank Limited

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

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Case details

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