Disposed

Gadekar Ginning and Pressing Pvt. Ltd. v. Canara Bank

DRAT17 Oct 2022REGULAR APPEAL/78/2024

Case brief

AI extract

What is this about?

The Tribunal refused to reduce the deposit to 25% but allowed the appeal to proceed conditionally upon a deposit of Rs. 1 crore by installments.

What did the court decide?

Appeal stayed subject to deposit of Rs. 1 crore in two installments; failure to deposit leads to dismissal of the appeal.

What the court decided

Gadekar Ginning and Pressing Pvt. Ltd. versus Canara Bank — 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. 420/2022 (WoD) In Appeal on Diary No. 743/2022

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Between

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M/s. Gadekar Ginning and Pressing Pvt. Ltd. & … Appellant/s Anr.

V/s.

Canara Bank

…Respondent/s

Mr Ismail Nasikwala, Advocate for Appellant. Ms Vaishali Bhilare, Advocate for Respondent.

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-: Order dated: 17/10/2022:-

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The first Appellant is a Company and the second Appellant is one of the directors of the Company. The Appellants have approached this Tribunal under Sec. 18(1) of the SARFAESI Act impugning the order of the D.R.T., Aurangabad in I.A. No. 424/2020 in S.A. at Diary No. 453/2020 for entertaining the application under Sec. 17 of the SARFAESI Act after condoning the delay of 372 days. The Ld. Presiding Officer vide impugned order dated 05.07.2022 was pleased to dismiss the prayer for condoning the delay. The Appellants are aggrieved and hence before this Tribunal.

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The learned counsel appearing for the Appellants submits that the first Appellant is a Company and is not functioning and no income is derived from the Company. The second Respondent is a

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senior citizen and has no source of income. She is also a retired lecturer and her husband is also retired, leaving them with no source of income or livelihood, which constrains them to financially depend on their children. It is also submitted that the second Appellant’s son who is also a director has not been showing any interest in the functioning of the Company and therefore, he too will not be much help. Per contra the Ld. Counsel appearing for the Respondent Bank filed a reply stating that the secured asset was sold and the auction has become final and the sale certificate has also been registered. The delay of 372 days has not been properly explained and hence, the application for condoning delay was rightly dismissed.

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The learned counsel appearing for the Respondent Bank also relied on the account statement of the second Appellant to indicate that she is not depending on her children for livelihood as stated in the application. She is a pensioner and drawing a pension, and has a sum of ₹4,39,709.66 in her pension account. Hence, the impecunious situation urged by the Appellants is not acceptable. Moreover, it is also stated that since the sale is challenged, the proceed of the sale cannot be deducted from the amount that is due to be paid by the Appellants and excluding that, as on the date of filing the Appeal a sum of ₹2,48,46,152/- is due from the Appellants. There are no grounds for reducing the amount to 25% exercising the discretion of this Tribunal under the third proviso to section 18(1), and therefore, the Appellants may be asked to pay 50% of the amount as mandatory under the second proviso to Sec. 18(1) of the SARFAESI Act.

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After having heard the counsel appearing for both sides. I find that the Appellants have challenged the sale proceedings on the grounds that sufficient notice of the sale was not served and that the second Appellant came to know about the proceedings in the Sarfaesi measures taken by the Bank at a highly belated stage, and that is reason to why there is a delay in filing the S.A. The second Appellant’s son who was managing the affairs of the firm ignored the business as a result of which the property was put up for sale. The Appellants would want that the business to be revived and the property sold at a higher price so that the entire debt of the Bank could be wiped out.

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Considering the facts and circumstances of this case, I do not find anything grossly erroneous about the order of the learned Presiding Officer in dismissing the application for condonation of delay. However, the Appeal need not be thrown overboard at the threshold, and in the interest of justice, an opportunity is given to the Appellants to satisfy the court about the delay. The Appellants definitely are not entitled to get the amount reduced to the minimum of 25%. Considering the circumstances of this case, the Appellants are directed to deposit a sum of Rs.1 crore in two equal instalments. The 1^st instalment of Rs.50 Lakhs shall be paid within three weeks, on or before 14.11.2022 and the 2^nd instalment of Rs.50 Lakhs shall be paid in another three weeks, on or before 05.12.2022. Failing which, the Appeal shall stand dismissed, without any further reference to this Tribunal.

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The amount shall be deposited in the form of a Demand Draft with the Registrar of this Tribunal.

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As and when the said amounts are deposited, they shall be invested in term deposits in the name of Registrar, DRAT, Mumbai, with any nationalised bank, initially for 13 months, and thereafter to be renewed periodically.

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On deposit of the payment within the stipulated time, all further proceedings including the creation of third-party interest in the subject property shall stand stayed.

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With these observations, the I.A. is disposed of. The Respondent is at liberty to file a reply in the Appeal with an advance copy to the other side.

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Post on 15.11.2022 for reporting compliance concerning the 1^st installment.

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Sd/Chairperson

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mks-09

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Gadekar Ginning and Pressing Pvt. Ltd. v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

Gadekar Ginning and Pressing Pvt. Ltd. v. Canara Bank

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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