Allowed

jagdishbhai ghanshyambhai shah v. the authorized officer the bhagyadaya Co. op bank Ltd.

DRAT10 Oct 2023IA/670/2023

Case brief

AI extract

What is this about?

Appeal against an order rejecting condonation of delay in filing a Securitisation Application. Bench held pre-deposit of 50% due amount was mandatory. Granted concession allowing deposit of 1.20 crores in installments due to financial strain. Appeal admitted conditionally pending payment.

What did the court decide?

Appellant directed to deposit 1.20 crores as pre-deposit via Demand Draft, with balance paid in two instalments by 21.11.2023, failing which appeal to be dismissed.

jagdishbhai ghanshyambhai shah versus the authorized officer… — Company and Corporate | 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. 670/2023 (WoD) In

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Appeal on Diary No. 1707/2023

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Between

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Jagdishbhai Ghanshyambhai Shah … Appellant/s V/s.

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The Authorised Officer,

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The Bhagyodaya Co-operative Bank Ltd.

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Mr Gaurang Kinkhabwala, i/b Mr D. D. Chauhan, Advocate for Appellant.

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An advocate for Respondent Bank is present.

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The Appellant is in appeal impugning the order dated 13.09.2023 in Misc. Application (M.A.) No. 52 of 2023 in Securitisation Application (S.A.) at Diary No. 754 of 2023 on the files of the Debts Recovery Tribunal-I, Ahmedabad (D.R.T.) wherein the application for condonation of 25 days delay in filing S.A. was declined to be condoned by the D.R.T. relying on a judgment of the Hon’ble High Court of Judicature at Madras which has been allegedly affirmed by the Hon’ble Supreme Court in the SLP that was filed. It was observed that the provisions of Sec.5 of the Limitation Act cannot be invited to condone the delay of applications filed beyond the period of 45 days. 2. The Ld. Counsel for the Appellant submits that the Hon’ble Supreme Court has not laid down any law but at the admission stage the SLP was dismissed and therefore, it cannot be held that there is a

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precedent of the Hon’ble Supreme Court on this point. It is also submitted that the Judgment of the Hon’ble High Court of Bombay in UCO Bank, Mumbai vs. M/s Kanji Manji Kothari & Co., Mumbai & Ors. 2008(4) Mh.L.J. 424 would still prevail which has not been overruled and the same is binding on this Tribunal as well as D.R.T. and therefore, the delay should have been condoned and the Appellant has a strong prima facie case with regard to the challenge made to the impugned order.

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To entertain the appeal, the Appellant will first have to comply with the mandatory provisions under Sec. 18(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’, for short). The Appellant contends that he has a good prima facie case and also that he is under financial strain because his Income Tax Returns produced the last three years indicate that he has very little income and may not be in a financial position to deposit 50% of the amount i.e. due from him. As per the auction notice, the amount i.e. due from the Appellant on two facilities would be around ₹4.2 crores which calculates interest up to 31.05.2023. In view of the latest judgment of the Hon’ble Supreme Court in S idha Neelkanth Paper Industries Pvt. Ltd. & Ano. vs. Prudent ARC Ltd & Ors., 2023 SSC OnLine SC 12 . Since the Appellant is challenging the sale, the amount of debt due as of date will have to be taken as a threshold for calculating the pre-deposit. If that be so, the amount due from the Appellant would be approximately ₹4.21 crores. 4. The Ld. Counsel appearing for the Respondent Bank has vehemently opposed the application stating that the Appellant is not

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entitled to any concession and does have a prima facie case because the Hon’ble Supreme Court has refused to interfere with the decision of the Madras High Court is not granting a condonation of delay while filing the application under Sec. 17 of the SARFAESI Act. However, the judgment of the Hon’ble Supreme Court is not placed to indicate that there is a declaration of the legal position and that the decision of the Bombay High Court would prevail. Hence, I find that the Appellant has a prima facie case. Since he is under financial strain, he has to be granted some concession in the matter of the deposit of the amount. The Appellant is, therefore, directed to deposit a sum of ₹1.20 crores as pre-deposit. The Appellant is producing a demand draft for ₹35 lakhs today. The balance amount will be ₹85 lakhs shall be payable in two equal instalments within the gap of three weeks each as stated hereunder.

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Numbers of Instalments	Payment on or before
1^stInstalment of₹42.50 lakhs	31.10.2023
2^ndInstalment of₹42.50 lakhs	21.11.2023

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In default of the payment of the instalments in time, the appeal shall stand dismissed without any further reference to the Tribunal.

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The property has already been sold and the possession is intended to be handed over to the auction purchaser, the said action shall be deferred till the next date of hearing in view of the payment made.

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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 3

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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 Respondent is at liberty to file a reply in the Appeal with an advance copy to the other side.

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Post on 01.11.2023 for reporting compliance regarding the first instalment.

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Sd/Chairperson

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mks-05

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jagdishbhai ghanshyambhai shah v. the authorized officer the bhagyadaya Co. op bank Ltd.

Case brief

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jagdishbhai ghanshyambhai shah v. the authorized officer the bhagyadaya Co. op bank Ltd.

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