Disposed

Rajarshi Cars Pvt. Ltd. v. Deustche Bank

DRAT20 Jun 2023IA/372/2023

Case brief

AI extract

What is this about?

In an interim appeal, the tribunal directed the appellant to deposit ₹6 crores as a pre-deposit under Section 18(1) of the SARFAESI Act. The court held that merits regarding redemption and sale propriety belong to the main appeal, but mandated the deposit to entertain the current request.

What did the court decide?

Appellant directed to deposit ₹6 crores in two instalments; status quo of property possession maintained pending payment.

Rajarshi Cars Pvt. Ltd. versus Deustche Bank — Banking and Recovery | DRAT (2023)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson I.A. No.372/2023(WoD)

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Appeal on Dairy No.933/2023

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Between

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M/s. Rajarshi Cars Pvt. Ltd & Anr. … Appellant/s V/s.

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Authorised Officer, Deutsche Bank

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…Respondent/s

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An Advocate for Appellant is present.

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Mr. Refeeq P., along with Mr. D. Baneerji, i/b Ms. Sapana R., Advocate for Respondent.

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-: Order dated: 20/06/2023:-

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The Appellant is in appeal impugning the order dated 05.06.2023 in S.A. No. 186/2023 on the files of Debts Recovery Tribunal - I, Ahmedabad (D.R.T) where undertaking cum affidavit filed by the Appellant expressing his willingness to deposit the entire outstanding amount was declined on the ground that the property has already been sold by the Respondent Bank for ₹ 12 crores and at that stage, an undertaking cum affidavit is not maintainable. The S.A. stands posted for hearing on 21.06.2023 before the Debts Recovery Tribunal, (D.R.T) as submitted by the Ld. Counsel appearing for the parties. In order to entertain the appeal, the Appellant will have to comply with the mandatory provisions u/s. 18 (1).

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The Ld. Counsel appearing for the Appellant submits that he has a prima facie case to sustain the appeal and therefore insists on

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indulgence being shown to reduce the amount to a minimum of 25% of the amount demanded. As per the 13 (2) notice dated 11.05.2021. The amount demanded is ₹ 13,52,23,284.28 and the sale notice indicates an amount of ₹ 13,52,23,284.28 as of 20.04.2023. The property is allegedly sold in pursuance to the sale notice for a sum of ₹ 12,01,00,000/-. It is submitted by the Respondent that the sale has been confirmed and the possession handed over to the auction purchaser.

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The Ld. Counsel appearing for the Respondent also points out Sec.13 (8) of the SARFAESI Act to indicate that the Appellant has not filed any application for redemption of the mortgage before the Debts Recovery Tribunal, (D.R.T) and the undertaking cum affidavit which he has filed is not an application for redemption but only an undertaking to pay the entire outstanding amount. U/s. 13 (8) the entire amount together with the charges, cost and expenses are to be tendered before the publication of notice for public auction. Only then can be borrower entertain an application for redemption. That stage is over and the Appellant cannot now seek a redemption on the mortgage.

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The question as to whether the Appellant is entitled to the redemption of the mortgage or whether there is any lacuna with regard to the Sarfaesi measures initiated by the Respondent Bank is to be decided in the S.A. which is still pending consideration before the Debts Recovery Tribunal, (D.R.T). At present, we are only

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concerned with the amount that is to be deposited as pre-deposit u/s. 18 (1).

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The Ld. Counsel appearing for the Respondent submits that the sale certificate indicates that the property has been sold for ₹ 12,01,00,000/- and therefore the Appellant is liable to pay 50 % of that amount by way of pre-deposit.

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The Ld. Counsel appearing for the Appellant submitted that he has paid several amounts in instalments subsequent to the receipt of the demand notice u/s. 13 (2) of the SARFAESI Act. The Respondent Bank has not produced an accounts statement indicating that those amounts which have been paid have been adjusted towards the debts and therefore the amount shown as due in the auction sale notice cannot be taken as correct. In view of the submission made by the Ld. Counsel for the Respondent that 50% of the amount shown in the sale certificate will have to be deposited in view of the fact that the sale is challenged, the amount that is payable by the Appellant would come to ₹ 6,00,50,000/-. The Appellant has expressed his willingness to pay the entire debt that is due. This is an indication that there is no financial strain for the Appellant. The correctness of the amount that is due and whether the Sarfaesi measures are proper or not is something to be decided in the S.A. by the Debts Recovery Tribunal, (D.R.T).

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Under the circumstances I direct the Appellant to deposit a sum of ₹ 6,00,00,000/- as pre-deposit. The Appellant has already

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produced a demand draft for ₹ 1,00,00,000/- towards the payment of pre-deposit the said amount shall be received by the Registry and the balance of ₹ 5,00,00,000/- shall be deposited in two equal instalments of ₹ 2.5 crores each. The 1^st instalment shall be payable within four weeks i.e. on or before 18.07.2023 and the second instalment shall be paid within three weeks on or before 08.08.2023 therefrom.

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The Ld. Counsel appearing for the Appellant is submitting that the possession has not yet been handed over to the auction purchaser as mentioned in the reply filed by the Respondent. The possession of the property shall not be handed over if not already handed over to the auction purchaser and status quo as on today shall be maintained till the next date of hearing.

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In default, 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 19.07.2023 for reporting compliance concerning the

payment.

Sd/-

Chairperson

rm-5

Rajarshi Cars Pvt. Ltd. v. Deustche Bank

Case brief

What is this about?

What did the court decide?

Rajarshi Cars Pvt. Ltd. v. Deustche Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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