Disposed

Ulhas S/O Keshavrao Joshi and Another v. Bank of India

DRAT21 Jul 2023IA/377/2023

Case brief

AI extract

What is this about?

The DRAT directed appellants to deposit Rs. 6 crores in two equal installments to entertain an appeal seeking a stay of SARFAESI measures, noting the adjustable amount due to the borrowers.

What did the court decide?

Directed appellants to deposit Rs. 6 crores in two instalments to secure stay of further SARFAESI measures and maintain status quo.

Ulhas S/O Keshavrao Joshi and Another versus Bank of India — 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. 377/2023 (WoD)

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In Appeal on Diary No. 947/2023

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Between

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Ulhas S/o Keshavrao Joshi & Anr. … Appellant/s V/s. Bank of India & Ors. …Respondent/s

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Mr. Radhe Agrawal, Advocate for Appellants.

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Mr. O.A. Das along with Ms. Pallavi Chari, Advocate for Respondents.

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-: Order dated: 21/07/2023:-

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The application is filed under Sec.18 (1) of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002, (‘SARFAESI Act”, for short) for waiver of the mandatory pre-deposit. The Appellants impugn the order dated 12.05.2023 dismissing Interlocutory Application (I.A.) No. 1065/2023 seeking a stay of the Sarfaesi measures including the sale of the secured assets in favour of the auction purchaser and the handing over possession of the property in Securitization Application (S.A.) No. 283/2023 on the files of Debts Recovery Tribunal, Nagpur (D.R.T.).

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The Appellants have challenged the Sarfaesi measures on various grounds. One of the grounds taken by the Appellants is that the property belonging to them was never mortgaged to the Respondent Bank for the purpose of creating the mortgaged.

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It is pointed out they are still in possession of the original title deed pertaining to the property. It is alleged that the 2^nd Respondent, the principal borrower had in collusion with the bank created certain documents creating a mortgage with respect to the property belonging to the Appellants. It states that the sale deed which is purportedly deposited with the bank is allegedly executed in 2007 whereas the property was actually purchased by the Appellants, in the year 1997, and that deed is still in possession of the Appellants.

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The Appellants had approached the Civil Court of Akola challenging the creation of mortgaged in favour of the 1^st Respondent Bank and had initially obtained an interlocutory order in their favour. Subsequently, that order was challenged by the bank before the District Court of Akola and it was vacated. The Appellants challenged the order of the District Court before the High Court of Bombay, Bench at Nagpur but that too was rejected, and even though they approached the Hon’ble Supreme Court of India, no favourable order was obtained.

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The Appellants would contend they have a strong prima facie case and that they may be granted relief with respect to the secure assets.

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The Ld. Counsel appearing for the Respondent Bank has opposed the application with vehemence stating that a sum of ₹12,88,72,122.40/- was due from the borrowers as of 12.05.2023 and that an original application was also filed as O.A. No. 62/2015 before the D.R.T. and an ex-parte judgment was obtained for a sum of ₹ 6.20 crores on 31.05.2016. The Appellants had allegedly filed M.A. No. 79/2016 for setting aside that ex-parte order but that 2

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application was dismissed and yet another application was filed as M.A. 11/2016 which is still pending consideration. However, the exparte order has not yet been set aside and the judgment for a decretal amount of ₹6.20 Crores still remains. Subsequent interest has also accrued and that is how the amount due as of now is nearly ₹13 Crores. The Ld. Counsel appearing for the Respondents submits that the Appellants have absolutely no case and that they may be directed to deposit 50% amount which is outstanding as of date for the purpose of entertaining the Appeal.

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The notice to take possession of the property in consequence of which I.A. No. 1065/2023 was filed not materialized because the scheduled possession could not be taken and that point in time. The Ld. Counsel appearing for the Appellants submits that a fresh notice has been received from the Tahsildar intending to take possession of the property on the 25th instant. It is further pointed out the Tahsildar intends to take possession of the property through the Circle Officer who has been sub-delegated. Prima facie, such action of sub-delegation is unsustainable because as per the judgment of the Hon’ble Bombay High Court in Petition No. 2876/2020 subdelegation by the Tahsildar is not possible. However, there can always be an order made to the Tahsildar not to further sub-delegate the action of taking possession.

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Considering the entire facts and circumstances, it is seen that the Appellants have not pleaded anything regarding their financial strain apart from the fact that the 1^st Appellant is very old and that the 2^nd Appellant has no source of income but there is no supportive evidence to that effect produced by the Appellants. I would,

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therefore, direct the Appellants to deposit the sum of ₹ 6 crores as pre-deposit. The said amount shall be paid in two equal instalments. The 1^st instalment of ₹ 3 Crores shall be payable within the period of four weeks, i.e. on or before 18.08.2023. The 2^nd instalment of ₹ 3 Crores shall be payable within four weeks, therefrom, i.e. on or before 15.09.2023. On payment of the 1^st instalment within the time stipulated, the Appellants shall be entitled to a stay of the further Sarfaesi measures and a status quo as of date shall be maintained. Failure to deposit the amount within the stipulated time shall entail dismissal of the Appeal.

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The amount shall be deposited in the form of a Demand Draft with the Registrar of this Tribunal. 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 Respondents are at liberty to file a reply in the Appeal with an advance copy to the other side.

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Post on 21.08.2023 for reporting compliance regarding the payment of the 1^st instalment.

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Sd/Chairperson

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psa-05

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Ulhas S/O Keshavrao Joshi and Another v. Bank of India

Case brief

What is this about?

What did the court decide?

Ulhas S/O Keshavrao Joshi and Another v. Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

Parties & counsel

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