Disposed

Ms Ms Zeal Logistics India Pvt. Ltd. v. Rajkot Nagrik Sahakari Bank Limited

DRAT17 Nov 2023IA/764/2023

Case brief

AI extract

What is this about?

The DRAT disposed of an interim application by Zeal Logistics seeking stay of SARFAESI measures. The Tribunal directed Appellants to deposit 43 lakhs in two instalments within a week and a month to secure a stay of possession. Failure to comply would result in automatic dismissal of the appeal.

What did the court decide?

Stay of Sarfaesi measures granted conditioned upon deposit of 43,00,000/- in two instalments by 24.11.2023 and 15.12.2023.

Ms Ms Zeal Logistics India Pvt. Ltd. versus Rajkot Nagrik… — Banking and Recovery | DRAT (2023)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson I.A. No. 764/2023 (WoD)

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Appeal on Diary No. 2072/2023 Between

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Zeal Logistics (India) Pvt. Ltd & Ors. … Appellant/s

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V/s.

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Rajkot Nagarik Sahakari Bank Ltd. An Advocate for Appellants is present.

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…Respondent/s

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An Advocate for the Respondent is present.

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-: Order dated: 17/11/2023:-

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The matter is taken up for hearing by way of a praecipe filed by Appellants for seeking urgent relief.

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The Appellants are in appeal impugning the order dated 04.08.2023 in S.A. No. 88/2023 on the files of Debts Recovery Tribunal-I, Mumbai (D.R.T) whereby the Securitisation Application (S.A.)No. 88/2023 was dismissed and disposed of on an undertaking given by the Applicants who are the Appellants that the amount would be paid within the stipulated time. The Appellants could not comply with the undertaking of making the payment and as a consequence, the Respondent Bank has proceeded with the Sarfaesi measures and possession is intended to be taken tomorrow i.e. on 18.11.2023. The Appellants are aggrieved and hence, in appeal.

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The Appellants submit that they may be granted a stay of the Sarfaesi measures initiated against them. The Appellant will first have to comply with the mandatory provisions u/s. 18 (1) of making a pre-deposit. The Appellants had challenged the entire proceedings up to the action intended to be taken u/s. 13 (4) of the Securitisation

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& Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for Short). Hence, as per the latest decision of the Hon’ble Supreme Court of India Sidha Neelkanth Paper Industries Pvt. Ltd. & Ano. vs. Prudent ARC Ltd & Ors., 2023 OnLine SC 12 the amount mentioned in the demand notice shall be the threshold amount for calculation of the pre-deposit contemplated under the SARFAESI Act. The amount which is demanded in the notice issue u/s. 13 (2) of the SARFAESI Act. under three facilities of loan adds up to ₹ 86,78,593/-. The Appellants seek indulgence to get the pre-deposit reduced by exercising the jurisdiction of this Tribunal under the third proviso to Sec.18(1)

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The Ld. Counsel appearing for the Respondent has vehemently opposed the application in view of the fact that u/s. 20 (2) of the RDB Act an order passed by consent cannot be challenged in appeal. In the instant case, the S.A. was disposed of on consent by the parties. The Appellants had undertaken that they would be making payments which they failed to make. The Appellants may have so many other reasons for not complying with the undertaking but those arguments cannot be countenanced in support of the fact that they had agreed for a consented disposal of the S.A. The provisions of the RDB Act would be applicable to proceedings under the SARFAESI Act as well. Hence, it has to be concluded that the Appellants do not have any prima facie case. The Appellants have not established a case of financial strain.

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The Appellants are therefore directed to deposit a sum of

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₹43,00,000/- as pre-deposit which shall be paid in two instalments. The 1^st instalment of ₹ 20,00,000/- shall be payable within a week and the 2^nd instalment of ₹ 23,00,000/- shall be payable within three

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weeks, as stated hereunder.

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Numbers of Instalments	Payment on or before
1^stInstalment	24.11.2023
2^ndInstalment	15.12.2023

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On payment of the 1^st instalment the Appellants shall be entitled to a stay of further Sarfaesi measures intended to be taken by the Respondent Bank till the next date of hearing. In default of payment of any of the instalments, the Appeal shall stand dismissed, 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 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 28.11.2023 for reporting compliance regarding the 1^st instalments.

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rm-19

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Ms Ms Zeal Logistics India Pvt. Ltd. v. Rajkot Nagrik Sahakari Bank Limited

Case brief

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Ms Ms Zeal Logistics India Pvt. Ltd. v. Rajkot Nagrik Sahakari Bank Limited

Case brief

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