Partly allowed

M/S. Madhuli Creations and Ors. v. Assets Care Recostruction Pvt. Ltd.

DRAT5 Oct 2023IA/430/2023

Case brief

AI extract

What is this about?

The Tribunal considered an interim application seeking protection from SARFAESI measures. Finding the demand notice technically defective but the appeal lacking a strong prima facie case without income tax returns, the Court ordered a limited pre-deposit as a condition to defer further enforcement action.

What did the court decide?

Further SARFAESI measures deferred until next date hearing upon Appellant payment of a specified pre-deposit amount.

M/S. Madhuli Creations and Ors. versus Assets Care… — 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. 430/2023 (WoD)

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Appeal on Diary No. 1055/2023

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Between

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M/s. Madhuli Creations & Ors. … Appellant/s V/s.

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The Authorized Officer, …Respondent/s

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Assets Care and Reconstructions Enterprise,

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Mr. Dhrumit Chauhan along with Ms. K. Trived, Advocate for Appellants.

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Asha Bhuta along with Mr. Mayank Samuel, i/b M/s. Sirius Legal, Advocate for Respondent.

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The Appellants are in appeal impugning the order dated 22.06.2023 in Securitization Application (S.A.) No. 219/2022 on the files of the Debts Recovery Tribunal-II, Ahmedabad (D.R.T.) wherein the Appellants were not granted any order of protection from the Sarfaesi measures initiated with regard to the secured assets. The Appellants had raised a number of contentions in their challenge to the Sarfaesi measures under 17 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short). It is contended that the demand notice u/s 13 (2) does not give a bifurcation of the amount that is claimed. The principal amount, interest, and charges are not separately mentioned and the total amount of ₹50,32,040/has been demanded due as of 14.11.2017 and therefore, the

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Appellants would contend that there is a violation of the mandate u/s 13 (3) of the SARFAESI Act. It is also contended that the steps taken u/s 14 have not been sufficiently complied for want of ninepointer of affidavit. The Appellants would also contend that the demand notice has not been served upon them and therefore, there is a violation of the Rules.

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The Ld. Counsel appearing for the Respondent has vehemently opposed this application and states that the Appellants do not have any prima facie case and that the contentions raised before the D.R.T. were considered on its merits by the Ld. Presiding Officer and has been overruled in the impugned order.

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The Respondent has already produced the copy of the courier receipt and the track report of the notice served by way of speed post on the Appellants which would indicate that the Appellants have been duly served. There is no dispute regarding the address mentioned in the notice and therefore, once the notice is proved to have been dispatched and the address mentioned is correct, the presumption of due service u/s 27 of the General Clauses Act would come into effect.

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The Appellants have not produced any documents to indicate that they are under financial strain and the income tax returns have not been produced. Hence, the Appellants have neither succeeded in establishing that they have a very strong prima facie case nor have they established that they are under financial strain. The amount demanded as per the 13 (2) notice is ₹50,32,040/- The Appellants are, therefore, directed to deposit a sum of ₹24 lakhs as pre-deposit. The Appellants are depositing a sum of ₹5 lakhs towards the pre-

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deposit today. The balance amount of ₹19 lakhs shall be payable in two equal instalments within a gap of two weeks each, as hereunder.

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Numbers of Instalments	Payment on or before
1^stInstalment of₹9,50,000/-	19.10.2023
2^ndInstalment of₹9,50,000/-	02.11.2023

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In view of the payment of ₹5 lakhs today, the further Sarfaesi measures shall stand deferred till the next date of hearing.

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In default of payment of any of the instalments shall entail in dismissal of the appeal 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 Respondents is at liberty to file a reply in the Appeal with an advance copy to the other side.

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Post on 20.10.2023 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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M/S. Madhuli Creations and Ors. v. Assets Care Recostruction Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

M/S. Madhuli Creations and Ors. v. Assets Care Recostruction Pvt. Ltd.

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

All orders in this case

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