Partly allowed

Mr. Gajanan Prachakar Burghate v. Indian Bank

DRAT22 Jun 2023IA/404/2023

Case brief

AI extract

What is this about?

In an application for waiver of pre-deposit under the SARFAESI Act, the court declined to grant indulgence due to lack of clean hands following a criminal complaint by the bank. The appellants were directed to deposit ₹46 lakhs in instalments to stay the SFA proceedings.

What did the court decide?

Directed appellants to deposit ₹46 lakhs in instalments staying the SARFAESI measures upon payment; default leads to dismissal of appeal.

Mr. Gajanan Prachakar Burghate versus Indian Bank — Banking and Recovery | DRAT (2023)

¶1

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson

¶2

I.A. No. 215/2023 (WoD) In Appeal on Diary No. 52/2023

¶3

Between

¶4

Gajanan Prachakar Burghate & Anr. … Appellant/s V/s.

¶5

Indian Bank …Respondent/s

¶6

Mr Shadad, Advocate for Appellants. Mr V.N. Ajikumar, Advocate for Respondent No.1

¶7

This is an application for waiver of pre-deposit filed u/s 18 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short) by the Appellants who is aggrieved by the order of Debts Recovery Tribunal, Nagpur(D.R.T.) dated 23.09.2022 in Interim Application (I.A.) No. 1727/2022 declining to grant any interlocutory reliefs with regard to secured assets against which the Respondent Bank has initiated Sarfaesi measures.

¶8

The Appellants have challenged the Sarfaesi measures u/s 17 (2) of the SARFAESI Act on various grounds which include the allegation that the demand notice u/s 13 (2) has not been served on them. The symbolic possession of the property was also taken without any notice. It is further stated that the property was sold without the auction notice being served upon the Appellants and the

¶9

¶10

sale stands challenged. The Appellants have also taken steps before the D.R.T. to bring on record the auction purchaser as a party to proceedings which has been allowed by the D.R.T.

¶11

As per the demand notice u/s 13 (2) dated 18.10.2019 there was demand for ₹ 73,19,341/- together with the interest. The loan of ₹ 70 lakhs was availed on 29.03.2017 and because the Appellants defaulted re-payment, the account was classified as Non-Performing Assets (NPA) on 01.10.2019. Thereafter, the aforesaid demand notice u/s 13 (4) to take over symbolic possession was allegedly issued on 05.02.2020 and the sale was conducted on 24.09.2021. The application u/s 14 for taking physical possession of the secured assets was filed before the District Magistrate, Amravati on 06.05.2022 and it was allowed on 06.05.2022. The Tehsildar issued the notice for taking over the possession on 14.08.2022 and the Appellants filed the S.A. No. 349/2022 on 19.09.2022 with an application for condonation of delay. The delay was condoned but the D.R.T. declined to grant any interim relief regarding the Sarfaesi measures. The possession of the property was taken on 23.09.2022.

¶12

The Ld. Counsel appearing for Respondent Bank submits that as of date there is an amount of ₹ 97,83,351/- outstanding as due from the Appellants. The Ld. Counsel appearing for Respondent also submits that the Appellants have not come up with clean hands. In the Appeal memorandum, apart from the reliefs sought against the impugned order, it is also prayed that the property may be directed to be restored to the Appellants.

¶13

After having made such contentions in the Appeal which was

¶14

¶15

filed in December 2022, it is pertinent to note that the Appellants had allegedly broken open the lock of the delivered property on 04.10.2022 against which, a criminal complaint has been lodged by the Bank and F.I.R. No. 1219 has been registered on 13.10.2022. The Ld. Counsel appearing for Respondent, therefore, submits that the Appellants have not come up with clean hands and that they are not entitled to any equity or indulgence from this Tribunal.

¶16

In the Application for waiver of pre-deposit, the Appellants have reiterated their allegation made in the S.A. Prima facie, the allegations were not found to be sustainable and the facts whether the notice u/s 13 (2) and 13 (4) was actually served on the Appellants before taking steps is something which is to be proved at the time of trial before the D.R.T. and hence, those allegations cannot be now taken into consideration. Though the Appellants have pleaded that they are in financial difficulty, the plea is not supported by any material.

¶17

Under the circumstances, I am of the opinion that the Appellants are not entitled to any indulgence exercising the jurisdiction of this Tribunal under the 3^rd proviso to section 18 (1) of the SARFAESI Act. The outstanding amount being ₹ 97,83,351/the Appellants are directed to deposit a sum of ₹ 46 lakhs. The Ld. Counsel appearing for Appellants undertakes to deposit a demand draft of ₹ 25 lakhs by 30.06.2023. The balance amount shall be deposited within the period of four weeks, on or before 28.07.2023. In default, the Appeal shall stand dismissed without any further reference to this Tribunal.

¶18

¶19

On the payment of the first instalment, the further proceeding under the SARFAESI Act shall stand stayed.

¶20

The amount shall be deposited in the form of a Demand Draft with the Registrar of this Tribunal.

¶21

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.

¶22

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.

¶23

Post on 03.07.2023 for reporting compliance regarding the first instalment.

¶24

Sd/Chairperson

¶25

mks-26

¶26

Mr. Gajanan Prachakar Burghate v. Indian Bank

Case brief

What is this about?

What did the court decide?

Mr. Gajanan Prachakar Burghate v. Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Abhinav Education Society versus Bank of Baroda

Bandhan Bank Ltd. versus Smt Parul P Shah and Ors.

Deepak Harkishandas Mirchandani versus the D C B Bank Ltd.

M/s Nilkanth Cotton Fibers versus Bank of Baroda

The Board of Trustees of Chennai Port Trust versus Icici Bank Limited & Ors.

Ms. Ggt Kaypee Limited versus Invent Assets Secuirtization and Reconstruction Pvt. Ltd. and 6 Ors.