Partly allowed

Nitin Patilbua Ugale v. Canara Bank

DRAT11 Apr 2023IA/211/2023

Case brief

AI extract

What is this about?

The tribunal fixed a mandatory pre-deposit of ₹1 Crore with time-bound instalments. Consequently, an interim stay was granted on further SARFAESI measures concerning a specific plot, while possession of the already sold property remains unaffected.

What did the court decide?

Fixed mandatory pre-deposit of ₹1 Crore payable in instalments; interim stay granted on further SARFAESI measures regarding land in Gat No. 452.

Nitin Patilbua Ugale versus Canara Bank — Banking and Recovery | DRAT (2023)

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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. 211/2023 (WoD)

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In Appeal on Diary No. 524/2023

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Between

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Nitin Patilbua Ugale … Appellant/s V/s. Canara Bank Through its Authorized Officer & …Respondent/s Anr.

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Mr. V.N. Ajikumar along with B.D. Dange, Advocate for Appellant. An Advocate for the Respondent is present.

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This is an application for waiver of pre-deposit filed u/s 18 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short) challenging the order of the Debts Recovery Tribunal-III, Mumbai in Securitization Application (S.A.) No. 128/2023 dated 24.03.2023 declined to grant any relief with regard to handing over possession of the property which has already been sold to the auction purchaser and the proceedings against the remaining items of the property belonging to the Appellant.

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The Appellant had borrowed from the Respondent Bank a loan of ₹ 2.35 Crores under three different facilities for his proprietorships and he defaulted payment during the Covid Pandemic. It is submitted that he was not granted any relief which was granted by the Government of India and the RBI with regard to

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the restructuring of the loans during the Pandemic.

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It is further stated that the Appellant has been earnestly attempting to repay the loan and ₹ 1.39 Crores has already been repaid toward the loan. A sale notice was issued on 21.02.2023 which indicates that the outstanding due as of that date is ₹ 2, 16,13,436.79/-. The property comprised in Gat No. 47A/7 has already been sold for ₹ 1,40,19,000/- and a sale certificate has been issued on 28.02.2023.

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The Appellant has serious objections regarding the entire Safaesi measures initiated by Respondent Bank, apart from the fact that he was not granted the benefit declared by Government and RBI during the pandemic period. He also states the sale itself is invalid because the valuation is not proper. The property which was sold is worth more than ₹ 5 Crores but has been sold for only ₹ 1,40,19,000/-. It is further stated that the Appellant has been earnestly attempting to redeem the mortgage for which he requires time.

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The Ld. Presiding Officer refused to grant any stay regarding the handing over possession of the property which was already sold. The auction purchaser has not been made a party to the S.A. and the Appellant has sufficient opportunity to contest the sale by challenging it on the grounds mentioned.

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The Appellant also states that he is under financial strain and the income tax returns for the years 2020-21, 2021-2022, and 20222023 have been produced and its shows that he has a meagre income which may not be sufficient for him to deposit the 50% of the

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amount due.

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The findings of the Ld. Presiding Officer in the impugned order does not give room for establishing any prima face case in favour of the Appellant. However, it is established to some extent that he has been making an earnest attempt to repay the loans prior to the pandemic and that he is under financial strain. For that reason even though the amount cannot be reduced to the minimum of 25%. The Appellant is directed to deposit the sum of ₹ 1 Crore as a mandatory pre-deposit. The Appellant is depositing the sum of Rs. 25 lakhs by way of a demand draft today.

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The balance amount shall be paid in two equal instalments. The 1^st instalment of ₹ 37.5 lakhs shall be paid within three weeks, on or before 02.05.2023 and the 2^nd instalment of ₹ 37.5 lakhs shall be paid within three weeks therefrom, on or before 23.05.2023. Failure to pay any of the instalments would entail in dismissal of the Appeal without any further reference to this Tribunal.

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In view of the fact that the Appellant has paid the deposit of ₹ 25 lakhs by way of a demand draft, there shall be an interim stay with regards to further Sarfaesi measures pertaining to land in Gat No. 452. It is made clear that there is no injunction regard to handing over possession of the property in Gat No. 47A/7 to the auction purchaser in accordance with the sale certificate. Since the Appellant has the opportunity to challenge the sale of the property and get the property re-delivered in case the sale is set aside in the S.A.

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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 nationalized 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 Bank is at liberty to file a reply to the Appeal with an advance copy to the other side.

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Post on 03.05.2023 for compliance regarding the payment of 1^st instalment.

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Sd/Chairperson

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psa-08

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Nitin Patilbua Ugale v. Canara Bank

Case brief

What is this about?

What did the court decide?

Nitin Patilbua Ugale 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

Coram

Case details

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