Disposed

M/s. Geetanjali Kelavani Mandal and Ors. v. m/s. Religare finvest Ltd.

DRAT19 Jul 2023IA/278/2023

Case brief

AI extract

What is this about?

The Tribunal directed the appellants to deposit Rs. 1.35 crores as a mandatory pre-deposit (50%) under Section 18(1) of the SARFAESI Act to entertain their appeal, rejecting their plea for a waiver or reduction due to lack of pleaded financial strain, and dismissed the appeal if the deposit is not made within six weeks.

What did the court decide?

Appellants directed to deposit Rs. 1.35 crores within six weeks; appeal to be dismissed upon failure.

M/s. Geetanjali Kelavani Mandal and Ors. versus m/s… — Company and Corporate | 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. 278/2023 (WoD) In

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Appeal on Diary No. 571/2023

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Between

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M/s Geetanjali Mandal & Ors. … Appellant/s V/s.

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The Authorised Officer, M/s Religare Finvest Ltd.

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…Respondent/s

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Mr Sachin Kaikini, i/b Mr Sikandar M Pathan & Ms Sophia F Pathan, Advocate for Appellants.

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Ms Dimple Tejani, i/b M/s M & S Legal Ventures, Advocate for Respondent.

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The first Appellant is a charitable trust. The second Appellant is its secretary while the third Appellant is a trustee. The Appellants had borrowed a sum of ₹3.33 crores from the Respondent Financial Institution in 2016 to run the school and charitable institution situated in rural Vadodara. Repayments were defaulted which resulted in the account being classified as a non-performing asset (NPA) on 31.10.2018. The demand notice was issued to the Appellants demanding a sum of ₹2,76,19,647.91 as on 15.11.2018. The amount was not paid on time in consequence of which symbolic possession was taken on 29.08.2018 under Sec. 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security

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Interest Act, 2002 (“SARFAESI Act”, for short). Thereafter, orders were obtained under Sec. 14 from the District Magistrate on 13.11.2020 in consequence of which the Respondent Financial Institution took physical possession and it is submitted that an agency is now running the school.

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The Appellants filed I.A. No. 1727 of 2022 for amendment of the Securitisation Application (S.A.) No. 460 of 2020 on the files of the Debts Recovery Tribunal No. II, Ahmedabad (D.R.T.) by incorporating two more prayers in the application. The first prayer was to the effect that the loan granted was without the approval of the Charity Commissioner and the second was that the mortgage could not have been created since the property belongs to Gujarat Industrial Development Corporation (GIDC). The Ld. Presiding Officer dismissed the application for amendment vide order dated 13.02.2023 stating that there would be a total change of the pleadings taken up initially by the Appellants. Aggrieved by the dismissal of the amendment application, the Appellants are in appeal.

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In order to entertain the appeal, the Appellants will first have to cross the hurdle of making a pre-deposit as contemplated under Sec. 18 (1) of the SARFAESI Act. The amount claimed as per demand notice under Sec. 13(2) is ₹2,76,19,647.91. The notice under Sec. 13(2), the steps under Sec. 13(4) and also proceedings under Sec. 14 of the SARFAESI Act stand challenged. The Appellants would, therefore, have to make a pre-deposit based on the demand made under Sec. 13 (2) of the SARFAESI Act. In the application for waiver, the Appellants have pleaded a total waiver, which by any means is not

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permissible. The Appellants have not pleaded any financial strain in their application and therefore, it is not possible for this Tribunal to reduce the amount of deposit to the minimum of 25%, exercising its jurisdiction under the third proviso to Sec. 18(1) of the SARFAESI Act. The Appellants are, therefore, directed to deposit a sum of ₹1.35 crores as pre-deposit for entertaining the appeal. The said amount shall be deposited within six weeks i.e. on or before 30.08.2023. Failure to pay the said amount shall entail in dismissal of the appeal without any further reference to this Tribunal.

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On the payment of the said amount, the further proceeding under the SARFAESI Act shall stand stayed.

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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 amount is deposited, it 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 31.08.2023 for reporting compliance concerning the payment.

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mks-5

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M/s. Geetanjali Kelavani Mandal and Ors. v. m/s. Religare finvest Ltd.

Case brief

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M/s. Geetanjali Kelavani Mandal and Ors. v. m/s. Religare finvest Ltd.

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