Disposed

Mr. Hashmukhbhai Vashrambhai v. India Resurgence Arc Private Limited

DRAT30 May 2023IA/303/2023

Case brief

AI extract

What is this about?

Tribunal dismissed the application for waiver of deposit seeking stay of SARFAESI measures. It held appellants failed to make earnest settlement attempts despite previous stay conditions. A deposit of Rs 30,00,000 was directed within two weeks to secure a stay.

What did the court decide?

Directing the appellants to deposit a sum of Rs 30,00,000 as pre-deposit within two weeks to secure a stay on further SARFAESI measures.

Mr. Hashmukhbhai Vashrambhai versus India Resurgence Arc… — 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. 303/2023 (WoD)

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Appeal on Diary No. 701/2023

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Between

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Hashmukhbhai Vashrambhai & Ors.

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… Appellant/s

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V/s.

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India Resurgence ARC Pvt. Ltd.

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…Respondent/s

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Mr. Jamshed Ansari, Advocate for Appellants.

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Mr. Rajesh Nagory, along wih Mr. Vinay Deshpande and Mr. Nikhil Rajan and Mr. Rupak Sawangikar, i/b M/s. V. Deshpande & Co., Advocate for Respondent.

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-: Order dated: 30/05/2023:-

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The matter is taken up for hearing by way of a Praecipe filed by the Appellants seeking urgent relief. This is an application for waiver of deposit filed u/s. 18 (1) of the SARFAESI Act in the appeal challenging the order of Debts Recovery Appellate Tribunal-II, Ahmedabad (D.R.T.) dated 27.03.2023, were the Ld. Presiding Officer had declined to grant a stay of the Sarfaesi measures initiated by the 1^st Respondent. It is contended that on 14.10.2022 the D.R.T. had directed the Respondent to deposit a sum of ₹ 5,00,000/- with the Respondent Bank and on that condition the Respondents were prevented from taking possession of the secured assets. In the order, it is also stated that the Appellants are making earnest attempts to

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settle the debt while making an offer of OTS. When the S.A. was taken up for consideration again on 27.03.2023, the Ld. Presiding Officer found that the Appellants have not taken any steps to pay off the amount and subsequent to the payment of ₹ 5,00,000/- as per the order dated 14.10.2022 no further payments were made.

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Hence, the interim order stalling the Sarfaesi measures was removed as the Appellants were not attempting to settle the matter. It is contended that the impugned order is cryptic and does not go into the merits of the contentions raised by the Appellants in their application challenging the Sarfaesi measures u/s. 17 (1) of the SARFAESI Act.

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The Appellants have challenged the Sarfaesi measures starting from the taking over symbolic possession on 13.10.2021. It is stated that proper notice was not served and the order of the District Magistrate u/s 14 of the SARFAESI Act is also challenged. When the physical possession of the property was intended to be taken, the Appellants approached the D.R.T with the S.A. and the aforesaid orders of 14.10.2022 and 27.3.2023 were passed.

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The Respondent states that there is an outstanding amount of ₹ 69,48,973/- due from the Appellants as of 30.04.2023 and that apart from the payment made in the year 2022 of ₹ 5,00,000/consequence to the order passed by the Ld. Presiding Officer, no further payments have been made and no earnest attempt has been made to settle the debt by making an OTS proposal which is acceptable.

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The Ld. Counsel appearing for the Respondent also submits that the order dated 27.03.2023 is not a cryptic one as is contended by the Ld. Counsel appearing for the Appellants. It is stated that the only contention that was raised by the Appellants was regarding the settlement and that they are inclined to settle but the Ld. Presiding Officer found that no earnest attempt has been made by the Appellants to settle the debt.

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Apart from the contentions regarding the non-service of notice before taking symbolic possession and the challenge of the order u/s. 14 and there are no substantial points raised regarding whether those orders were defective.

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The Ld. Counsel appearing for the Appellants submits that in the account statement an amount of ₹ 22,71,135/- has been levied as LPP. There is no clarification by the Respondent regarding what that amounts to. The 13 (2 ) notice demanded a sum of ₹ 55,50,133/- on 5.07.2021 the breakup shows LPP charges which according to the Ld. Counsel appearing for the Respondent is the late payment charges. Interestingly, the Appellants have never sent any reply to the 13 (2) notice seeking clarification of what LPP charges mean and that it is illegally added to the account.

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Even in the S.A. there are no such contentions raised by the Appellants. Under the circumstances, they cannot now be heard about their challenge about the LPP charges. No prima facie case has been made out by the Appellants and even though there is a faint reference regarding their inability to pay 50% of the debt due and

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that they are facing financial strain, it is not supported by any documentary evidence like income tax returns.

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Hence, the Appellants are not entitled to claim any indulgence on the part of this Tribunal to get the amount reduced. Taking the entire facts and circumstances, I direct the Appellants to deposit a sum of ₹ 30,00,000/- as pre-deposit within a period of two weeks on or before 13.06.2023 failing with the application shall stand dismissed without any further reference to this Tribunal.

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On payment of the aforesaid amount, there shall be a stay to the further Sarfaesi measures intended to be taken by the Respondent.

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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 14.06.2023 for reporting compliance concerning the payment.

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rm-5

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Mr. Hashmukhbhai Vashrambhai v. India Resurgence Arc Private Limited

Case brief

What is this about?

What did the court decide?

Mr. Hashmukhbhai Vashrambhai v. India Resurgence Arc Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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