Disposed

M/s.Ipsel Ventures v. Axis Bank

DRAT8 Sept 2023IA/375/2022

Case brief

AI extract

What is this about?

Appeal against refusal of interim relief under SARFAESI Act. Court acknowledges appellants' financial strain but refuses minimum 25% pre-deposit reduction. Mandates deposit of 24 lakhs in three installments for appeal entertainability.

What did the court decide?

Direct deposit of 24 lakhs in three equal instalments (8 lakhs each) by a specified date; stay of SARFAESI measures on payment of first instalment.

M/s.Ipsel Ventures versus Axis 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. 375/2022 (WoD)

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In Appeal on Diary No. 260/2022

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Between

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M/s. IPSEL Ventures & Realty Pvt. Ltd. & Ors. … Appellant/s V/s. Axis Bank Ltd. …Respondent/s

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Mr. Radhe Agrawal, Advocate for Appellants.

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Mr. Mishra along with Sejal Tambe, Advocate for Respondent Bank

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-: Order dated: 08/09/2023:-

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The Appellants have come up in an appeal impugning the order dated 30.03.2022 in Interim Application (I.A.) No. 792/2022 in Securitization Application (S.A.) No. 52/2022 on the files of the Debts Recovery Tribunal-II, Mumbai (D.R.T.) wherein the Ld. Presiding Officer refused to grant any interim relief against the Sarfaesi measures initiated by the 1^st Respondent Bank under the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short). The Appellants are aggrieved and hence, in appeal. 2. In order to entertain the appeal the Appellants will first have to cross the hurdle of making the mandatory pre-deposit u/s 18 (1) of the SARFAESI Act. The Appellants plead that they are under financial strain and that their business suffered during the pandemic and that attempts have been made by the Appellants to repay the debt in instalments, and ₹20 lakhs was also paid as the borne out

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from documents.

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The Appellants would contend that because of their financial strain the cheques issued by them to the various parties were dishonoured and auctions u/s 138 of the Negotiable Instrument Act have been initiated against them at various places including Kolkata and Nagpur. The Appellants would, therefore, contend that considering their financial strain and the good prima facie case that they have with regard to the challenge of the Sarfaesi measures, the amount may be directed to be reduced to 25% of the demand made u/s 13 (2).

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The Ld. Counsel appearing for Respondent Bank has vehemently opposed the application stating that the documents do not indicate any financial strain on the part of the Appellants. It is stated that the pendency of proceeding u/s 138 of the Negotiable Instrument Act would not by itself indicate that the Appellants are under financial strain. It is also stated that at the most it would only indicate that the Appellants have not paid the amount due to others as well.

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It is further contended that the settlement proposal made by the Appellants was accepted by the bank which they later defaulted and the ₹20 lakhs paid by them was not adjusted towards the present loan against which the Sarfaesi measures have been initiated. The reply sent by the Respondent would indicate that the amount of ₹20 lakhs was adjusted toward the present debt for which the Sarfaesi measures have been initiated.

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Though the Appellants do not have a very strong prima facie case with regard to challenging the Sarfaesi measures, they have to

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some extent succeeded and proving that they are under financial strain.

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Under the circumstances, though the Appellants are not entitled to get the pre-deposit amount reduced to the minimum of 25% of the debt due, they are entitled to some concession so that the appeal can be entertained on its merits. The Appellants are, therefore, directed to deposit a sum of ₹24 lakhs in three equal instalments of ₹8 lakhs each. The 1^st instalment of ₹8 lakhs shall be payable within a period of three weeks, i.e. on or before 29.09.2023. The 2^nd instalment of ₹8 lakhs shall be payable within a period of two weeks therefrom, i.e. on or before 13.10.2023 and the 3^rd instalment of ₹8 lakhs shall be payable within the period of two weeks therefrom, i.e. on or before 27.10.2023. On the payment of the first instalment, the further proceedings under the SARFAESI Act initiated shall stand stayed till the next date of hearing before the bench. Failure to pay the instalments shall entail in dismissal of the Appeal without 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 03.10.2023 for reporting compliance regarding the payment of the 1^st instalment.

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Sd/Chairperson

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psa-25

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M/s.Ipsel Ventures v. Axis Bank

Case brief

What is this about?

What did the court decide?

M/s.Ipsel Ventures v. Axis Bank

Case brief

What is this about?

What did the court decide?

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