The Debts Recovery Appellate Tribunal rejected the appellants' appeal seeking a reduction in the pre-deposit requirement from 25% to an equitable amount under Section 18(1) of the SARFAESI Act. The court directed payment of ₹20 lakhs in two instalments
Appeal dismissed; directed to deposit ₹20 lakhs in two instalments for stay of SARFAESI measures.
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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson I.A. No. 600/2023 (WoD)
In
Appeal on Diary No. 895/2023
Between
Hitesh Suresh Mehta & Ors. … Appellant/s
V/s.
IDFC First Bank Ltd. …Respondent/s
Mr Alok D Mishra, Advocate for Appellants. Mr R. L. Motwani, Advocate for Respondent Bank.
-: Order dated: 23/11/2023:-
The Appellants are in appeal impugning the order dated 26.04.2023 in Securitisation Application (S.A.) No. 141 of 2023 on the files of the Debts Recovery Tribunal–III, Mumbai (D.R.T.) wherein the D.R.T. refused to grant any protection to the Appellants for the failure on the part of the Appellants to settle the debt due. ₹15 lakhs has been paid as directed by the D.R.T. Thereafter, the stay was vacated. The Appellants are aggrieved and hence, in appeal. Since the Appellants are challenging the Sarfaesi measures after taking over possession of the property under Sec. 13(4) of the Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’, for short). The amount mentioned in the demand notice under Sec. 13(2) is the threshold amount for determining the pre-deposit amount. The Appellants had subsequently, as per the directions of the D.R.T., paid ₹15 lakhs towards the amount
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demanded and consequent to the filing of this appeal further a sum of ₹10 lakhs was paid. Thus altogether a sum of ₹25 lakhs was paid by the Appellants towards the debt due. The balance would be ₹55,92,555/-. Some interest also would be due as a demand notice dated 03.02.2022. The first Appellant has produced Income Tax Returns to prove that he is under financial strain. The balance sheet of the second Appellant company which is a corporate guarantor and the Income Tax Returns of the third Appellant are not forthcoming. Therefore, the Appellants are not entitled to get the deposit amount reduced to 25% exercising the jurisdiction of this Tribunal under the third provision to Sec. 18(1) of the SARFAESI Act.
| Numbers of Instalments | Payment on or before |
|---|---|
| 1stInstalment₹10,00,000/- | 7.12.2023 |
| 2ndInstalment₹10,00,000/- | 21.12.2023 |
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with any nationalised bank, initially for 13 months, and after that to be renewed periodically.
7 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.
Post on 08.12.2023 for reporting compliance regarding the first instalment.
Sd/-
Chairperson
mks-03
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3 issues framed by the court
Whether the appellants are entitled to reduce the pre-deposit amount to 25% under Section 18(1) of the SARFAESI Act given their financial status.
Whether the direction for a reduced pre-deposit is justified when corporate guarantor documents are not forthcoming.
Whether a stay on enforcement measures can be granted conditionally upon payment of interim instalments.
2 provisions across 1 enactments
Hitesh Suresh Mehta & Ors.
IDFC First Bank Ltd.
Ashok Menon
As recorded by the court registry
7 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
