Dismissed

Euphoriya Technologies Pvt. Ltd. and Ors. v. Omkara Assets Reconstruction Pvt. Ltd.

DRAT26 Apr 2023

Case brief

AI extract

What is this about?

DRAT rejected the Appellants request to waive the mandatory 50% pre-deposit under Section 18 of the SARFAESI Act. The Court found the claim of financial strain unsubstantiated due to lack of documents, ordering a deposit of ₹2.5 crores in two instalments with an eight-week deadline.

What did the court decide?

Appellants directed to deposit ₹2.5 crores in two instalments within eight weeks; stay on SARFAESI measures upon payment of first instalment.

Euphoriya Technologies Pvt. Ltd. and Ors. versus Omkara… — Execution and Attachment | DRAT (2023)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson I.A. No. 246/2023(WoD) In Appeal on Diary No. 439/2023

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Between

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Euphoria Techn o logies Pvt Ltd and Ors … Appellant/s V/s. M/s. Omkara As s ets Reconstruction Pvt Ltd. …Respondent/s Ms. Y.Y. Naik, Advocate for Appellant. Mr. Vinay Desh p ande, along with Mr. Rupak Saw a ngikar, i/b M/s. V. Deshpande & Co., Advocate for Respondent.

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-: Order dated: 26/04/2023:-

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The matter is ta k en up for hearing by way of a Praecipe filed by the Appellant for se e king urgent relief. This is an appl i cation for waiver or deposit filed by the borrowers/Appellants. On being aggrieved by the impugned o r der of the Ld. Presiding Officer, Debts Recovery Tribunal-II, Ah m edabad(D.R.T.) dated 10.02.2023 i n S.A. 706/2022 filed by the App e llants. The Appellants have chall e nged the Sarfaesi measures initiate d by the first Respondent financ i al institution on various grounds i ncluding a challenge to the dema n d notices issued u/s. 13 (2) and t h e action for possession under sec t ion 13 (4) as also the proceedings u/s. 14 before the District Mag i strate, under the provisions of the Securitisation & Reconstruction o f Financial Assets & Enforcement o f Security Interest Act, 2002( ‘S A RFAESI Act’ for short).

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The Appellants have filed pursis before the D.R.T. offering to settle the entire debts by making payments in instalments, even while challenging the Sarfaesi measures. Prima facie, it would amount to a waiver of all challenges that are raised with regard to the Sarfaesi measures. Even in the appeal, the Appellants state that they have made an offer to settle the entire debts and therefore, the challenge raised with regard to the Sarfaesi measures appears to have been given up.

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The 1^st Respondent Bank has filed a statement of accounts which indicates that a sum ₹ 5,58,39,441/- is due as of the date of filing of the appeal. The amount that has been paid by the Appellants consequent to the receipt of demand notice u/s. 13 (2) of the SARFAESI Act has been accounted for by the 1^st Respondent. The Appellants would contend that the business of the company has come to a standstill and that the Appellants do not have any source of income and are under a grave financial strain, and therefore, unable to pay the mandatory pre-deposit of 50% contemplated u/s. 18 (1) of the SARFAESI Act.

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There are absolutely no documents produced by the Appellants to indicate the financial strain which has been pleaded and argued. Under the circumstances, I find no reason to invoke the discretion of this Tribunal under the third proviso of Sec. 18 (1) and in favour of the Appellants.

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The Appellants are therefore directed to deposit a sum of ₹ 2.5 crores as mandatory pre-deposit within a period of eight weeks in two instalments. The first instalment shall be payable within four

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weeks on or before 24.05.2023 and the second instalment shall be

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payable within four weeks therefrom, on or before 21.06.2023. On payment of the first instalment, the Appellant shall be entitled to stay with regard to further Sarfaesi measures intended to be taken by the 1^st Respondent.

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In default of payment of the instalments, 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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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 25.05.2023 for reporting compliance concerning the payment.

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Sd/Chairperson

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rm-6

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Euphoriya Technologies Pvt. Ltd. and Ors. v. Omkara Assets Reconstruction Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Euphoriya Technologies Pvt. Ltd. and Ors. v. Omkara Assets Reconstruction Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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