Stayed proceedings and directed appellant to deposit balance ₹8.5 lakhs pre-deposit under section 18(1) of SARFAESI Act to be invested in term deposits.
Stayed further proceedings and directed deposit of balance ₹8.5 lakhs to be invested in term deposits sanctioned by Tribunal to maintain pending appeal.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr. Justice Ashok Menon, Chairperson I.A. No. 458/2023 (WoD)
In Appeal on Diary No. 957/2023
Between
M/s. Sukhdham Residency & Ors. … Appellant/s V/s. The Authorized Officer, …Respondent/s
The Authorized Officer, Asset Care and Reconstruction Enterprise Ltd. Mr Puneet Gogad, Advocate for Appellants. An Advocate for the Respondent is present.
The Appellants are the borrowers/guarantors/mortgagers who are aggrieved by the Interlocutory order of Debts Recovery Tribunal-II, Ahmedabad (D.R.T.) dated 12.05.2023 in Securitization Application (S.A.) No. 227/2023 filed u/s 17 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short) whereby the Ld. Presiding Officer declined to grant any interlocutory reliefs to the Appellants with respect to Sarfaesi measures initiated by the Respondent ARC with regard to the debt due from the Appellants. 2. The Appellants have filed the aforesaid S.A. challenging the impropriety in the demand notice issued u/s 13(2) of the SARFAESI Act dated 18.10.2018 demanding a sum of ₹56,54,450/- on the ground that the notice does not comply with the mandatory requirement of sub-section 3 to section 13 and that the breakup of
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the total amount that is demanded has not been given in the notice. That part it is also stated that the steps taken u/s 14 of the SARFAESI Act are also defective for the reason that the proceedings were initiated against a dead person since one of the debtors namely Hareshbhai Muljibhai Shah died on 18.12.2022 much before the filing of the application u/s 14 before the Chief Judicial Magistrate, Vadodara. Hence, the proceeding initiated u/s 14 is defective and cannot be proceeded with.
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going through the notice issued to the Appellants u/s 13(2) there is a demand made for ₹56,54,450/- as of 18.10.2018 but it does not give a breakup of the amount in the body of the notice. The notice runs in nine pages and nowhere is it mentioned regarding the breakup of the debt due. The notice also does not indicate that a detailed statement of account or a foreclosure notice has been enclosed or attached with the demand notice and therefore, prima facie, it cannot be believed that the separate addendum was attached to the demand notice giving the descriptions of the amount that is due from the Appellants. It is for Respondent Bank to prove that there were attachments to the notice issued under 13 (2) giving the breakup of the amount. Oral submission across the bar by the Ld. Counsel appearing for the Appellants is not evidence and prima facie it appears that the Ld. Presiding Officer faulted and accepted the oral submission made by the Ld. Counsel regarding the compliance of section 13 (3) of the SARFAESI Act. The notice would therefore be apparently defective in view of the settled positions as held by the Hon’ble High Court of Gujarat in Punjab National Bank V/s M/s. Mithilanchal Industries Pvt. Ltd. MANU/GJ/1069/2020. With regard to the inadequacy of the application u/s 14 of the SARFAESI Act, I do not intend to go into the details, since further inquiry into the said aspect will have to be gone into while determining the S.A.
Appellant is a widow, a housewife who is a senior citizen without any source of income. Under the circumstances, it is prayed that the Appellants are entitled to seek the indulgence of this Tribunal exercising jurisdiction under the 3rd proviso to section 18 (1) of the SARFAESI Act.
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taken for consideration, and the Appellants may be directed to deposit 50% of that amount.
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deposit a sum of ₹16 lakhs as pre-deposit u/s 18 (1) of the SARFAESI Act for the appeal to be entertained. The Appellants have already deposited a sum of ₹7.5 lakhs. The balance amount of ₹8.5 lakhs shall be deposited within a period of three weeks, i.e. on or before 29.08.2023, failing which the appeal shall stand dismissed without any further reference to this Tribunal. Since the Appellants have already deposited of ₹7.5 lakhs there shall be a stay of the further proceedings till the next date of hearing.
Post on 30.08.2023 for reporting compliance.
psa-02
Sd/Chairperson
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2 issues framed by the court
Whether the demand notice u/s 13(2) of the SARFAESI Act is defective due to absence of breakup of amount and attached foreclosure letter.
Whether the Tribunal can entertain the appeal on prima facie case and financial strangulation of appellants.
Colour shows how this judgement treated each authority
Punjab National Bank V/s M/s. Mithilanchal Industries Pvt. Ltd.Referred¶13
Punjab National Bank V/s M/s. Mithilanchal Industries Pvt. Ltd. MANU/GJ/1069/2020
Sidha Neelkanth Paper Industries Pvt. Ltd. & Anr V/s Prudent ARC Ltd & OrsExplained¶16
Sidha Neelkanth Paper Industries Pvt. Ltd. & Anr V/s Prudent ARC Ltd & Ors 2023 SSC OnLine SC 12
M/s. Shree Rajmoti Industries V/s The Authorized Officer, Union Bank of IndiaReferred¶16
M/s. Shree Rajmoti Industries V/s The Authorized Officer, Union Bank of India Special Civil Application No. 9564/2023
4 provisions across 1 enactments
M/s. Sukhdham Residency & Ors.
The Authorized Officer, Asset Care and Reconstruction Enterprise Ltd.
Ashok Menon
As recorded by the court registry
2 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
