Partly allowed

Messer Krishna Petrochemicals v. Punjab National Bank

DRAT24 Nov 2023IA/769/2023

Case brief

AI extract

What is this about?

The Tribunal granted partial interim relief by directing the appellant to deposit ₹1.20 Crores as pre-deposit under S. 18(1) of the SARFAESI Act to seek protection against the sale of their property, allowing possession taking to be deferred until the next hearing. Failure to comply would lead to dismissal.

What did the court decide?

Appellant directed to deposit ₹1.20 Crores in three instalments by specified dates; possession taking deferred till next hearing.

Messer Krishna Petrochemicals versus Punjab National Bank — Company and Corporate | DRAT (2023)

¶1

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr. Justice Ashok Menon, Chairperson

¶2

I.A. No. 769/2023 (WoD)

¶3

Appeal on Diary No. 2055/2023

¶4

Between

¶5

M/s. Krishna Petrochemicals & Ors. … Appellant/s V/s. The Authorized Officer, …Respondent/s

¶6

Punjab National Bank & Anr.

¶7

Mr. S. Panesar along with Mr. Puneet Gogad, Advocate for Appellants.

¶8

A. Bhuta, i/b M/s. Bhuta & Associates, Advocate for Respondent No.1

¶9

The Appellants are in appeal impugning the order dated 20.10.2023 in Securitization Application (S.A.) No. 81/2023 on the files of the Debts Recovery Tribunal-I, Ahmedabad (D.R.T.) where no interim relief of the protection was granted to the Appellants who are facing the Sarfaesi measures under the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short) initiated by the Respondent Punjab National Bank. One item of the property has already been sold and the Appellants faced dispossession of the second item of the property. They filed the S.A. challenging the sale stating that the property was for pretend.

¶10

¶11

It is pointed out that the value of the property as per the valuation produced by the Appellants would come to ₹ 2.40 Crores and that it was sold to the 2^nd Respondent for ₹ 1.24 Crores only. It is pointed out that the valuation produced by the bank indicates that an opened plot has been valued which considerably brought down the price of the property. The reserve price was fixed very low level and the auction sale was for consideration only slightly above the reserve price. There was only a single bidder to participate in the bid and in the very first auction, the property was sold and the bank did not wait for the price to come up. By way of which, the Appellants have suffered. It is further pointed out that the property has been described as an open plot though it was actually an industrial property.

¶12

The affidavit filed by the officer of the bank together with the sale deed indicates that there are no structures therein. But the valuation report contains a photograph of the structures which are situated in the property which would apparently belie the affidavit filed by the officer together with the sale deed and the valuation report of the bank though it shows the structure standing there in the property has been valued as an opened plot. The Appellants have produced the valuation report which values the structures at ₹ 69.34 lakhs and the value of the property is ₹ 1.75 crores which adds up to ₹ 2.40 crores. The Appellants would, therefore, contend that the sale is not sustainable and is liable to be set aside. The S.A. is filed for that.

¶13

¶14

The Ld. Counsel appearing for the Respondents has vehemently opposed the application stating that there is no prima facie case for the Appellants, and property has been properly valued and there is no irregularity in the sale. According to the Respondent the outstanding amount as of the date of ₹ 3.67 Crores and therefore, the Appellants ask for a deposit of 50% of that amount as per deposit contemplated u/s 18 (1) of the SARFAESI Act.

¶15

The Ld. Counsel appearing for the Appellants points out the Appellants are under financial strain. There is no business taking place. The 1^st Appellant proprietorship belongs to the 2^nd Appellant. The 3^rd Appellant is his wife with no source of income and the 4^th Appellant is his father who also has little means of livelihood. The income tax returns have been produced to indicate that the Appellants do not have sufficient income to deposit 50% of the debt due.

¶16

However, the balance sheet and the statement of account proprietorship have not been produced to indicate that the proprietorship was not providing sufficiently to the Appellants. The Appellants have pointed out certain facts that indicate the existence of the prima facie case and therefore, inclined to grant some concession to the Appellants. The threshold amount for payment of the pre-deposit is taken as ₹ 3.67 Crores. The Appellants are directed to deposit a sum of ₹ 1.20 Crores as pre-deposit. The Appellants have already produced the demand draft for ₹25 lakhs and the balance shall be deposited in three equal instalments within the gap of two weeks each, as stated hereunder.

¶17

¶18

Numbers of Instalments	Payment on or before
1^stInstalment of₹31,00,000/-	08.12.2023
2^ndInstalment of₹32,00,000/-	22.12.2023
3^ndInstalment of₹32,00,000/-	05.01.2024

¶19

The possession is intended to be taken shall stand deferred till the next date of hearing.

¶20

Default in payment of any of the instalments shall entail in dismissal of the appeal without any further reference to this Tribunal.

¶21

The amount shall be deposited in the form of a Demand Draft with the Registrar of this Tribunal.

¶22

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.

¶23

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.

¶24

Post on 11.12.2023 for reporting compliance regarding the payment of the 1^st instalment.

¶25

psa-07

¶26

Messer Krishna Petrochemicals v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Messer Krishna Petrochemicals v. Punjab National Bank

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

Similar cases

The Saraswat Co. Operative Bank Ltd. versus Kbc Bank N.V. and Ors.

Hdfc Bank Ltd. versus M/S Bhayyalal Gangadharji Jain & Anr.

M/s Anand Poultry Farm & Anr. versus Bank of India & Ors.

M/S Kashish Food versus Bank of Maharashtra

Gruh Suvidha Through Its Prop. Shri Shantilala Kunjulala Rathi versus Omkara Assets Reconstructions Private Limited

nanduba educational and medical trust and Ors. versus Bank of Baroda

What is this about?

What did the court decide?

What is this about?

What did the court decide?

What the court decided

A compact analysis

The Saraswat Co. Operative Bank Ltd. versus Kbc Bank N.V. and Ors.

Hdfc Bank Ltd. versus M/S Bhayyalal Gangadharji Jain &amp; Anr.

M/s Anand Poultry Farm & Anr. versus Bank of India & Ors.

M/S Kashish Food versus Bank of Maharashtra

Gruh Suvidha Through Its Prop. Shri Shantilala Kunjulala Rathi versus Omkara Assets Reconstructions Private Limited

nanduba educational and medical trust and Ors. versus Bank of Baroda

Hdfc Bank Ltd. versus M/S Bhayyalal Gangadharji Jain & Anr.