Disposed

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

DRAT23 Nov 2023IA/774/2023

Case brief

AI extract

What is this about?

The Appellate Tribunal fixed a predeposit of ₹60 lakhs for the Appellants in an appeal against SARFAESI measures. While relieving the Defendants of possession pending full payment due to interim orders, it ordered payment in installments.

What did the court decide?

Predeposit of ₹60 lakhs directed in installments; possession taken under Sec. 13(2) deferred till next hearing.

nanduba educational and medical trust and Ors. versus Bank of… — Banking and Recovery | DRAT (2023)

¶1

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson IA. No. 774/2023 (WoD) In Appeal on Diary No. 2109/2023

¶2

Between

¶3

Nandubar Education Medical Trust & Ors. … Appellant/s

¶4

V/s.

¶5

Bank of Baroda …Respondent/s

¶6

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

¶7

Ms S. Thorat, i/b M/s S P Law PCPL, Advocate for Respondent. Bank.

¶8

-: Order dated: 23/11/2023:-

¶9

The matter is taken up for hearing by way of a praecipe filed on 20.11.2023 by the Appellants seeking urgent relief.

¶10

This is an application filed under Sec. 18(1) of the Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’, for short) by the Appellants seeking the indulgence of this Tribunal to reduce the mandatory predeposit contemplated under the 2^nd proviso to Sec. 18(1) to the minimum of 25% of the debt due.

¶11

The Appellants are in appeal impugning the order dated 07.11.2023 in Securitisation Application (S.A.) No. 259 of 2020 on the files of the Debts Recovery Tribunal-II, Ahmedabad (D.R.T.) refusing to grant any protection to the Appellants against the Sarfaesi measures initiated by the first Respondent bank concerning the

¶12

¶13

secured assets.

¶14

The Appellants are facing dispossession of the secured assets under Sec.14 of the SARFAESI Act. In the application filed by the Respondent Bank before the Chief Judicial Magistrate, it is mentioned that there is an outstanding dues of ₹1,08,24,467 as of 31.07.2023. This amount was arrived at after appropriation of amounts received consequent to the sale of certain items of the secured assets belonging to the Appellants. The demand notice dated 01.02.2020 under Sec. 13(2) had demanded a sum of ₹2,98,49,388.50. Symbolic possession was taken on 02.06.2020.

¶15

Sarfaesi measures are challenged by the Appellants in the S.A. on various grounds. It is stated that the demand notice does not give a breakup of the principal amount and interest as contemplated under Sec. 13(3) of the SARFAESI Act. It is also contended that in the application filed under Sec. 14 it refers to a restructuring of the debt on 16.09.2019 this fact is not mentioned in the demand notice.

¶16

The Appellants are not challenging the sale of the properties; therefore, they are entitled to get sale consideration adjusted towards the total debt due. The impugned order mentioned that the amount due from the Appellants is ₹1.20 crores and the Ld. Counsel appearing for the Respondent Bank submits that at present the amount has increased to ₹1.56 crores.

¶17

Even a prima facie finding regarding debt due made by the D.R.T. can be accepted as the threshold amount for the calculation of pre-deposit. The Appellants have not succeeded in establishing their financial strain. Under the circumstances, I direct the Appellants to

¶18

¶19

deposit a sum of ₹60 lakhs as pre-deposit. The Ld. Counsel appearing for the Appellants submits that the Appellants would be producing the demand draft of ₹10 lakhs on 24.11.2023. The balance amount of ₹.50 lakhs shall be deposited in two equal instalments of ₹25 lakhs each within a gap of two weeks each as mentioned hereunder.

¶20

Numbers of Instalments	Payment on or before
1^stInstalment₹25,00,000/-	7.12.2023
2^ndInstalment₹25,00,000/-	21.12.2023

¶21

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

¶22

Given the undertaking that ₹10 laksh would be deposited on 24.11.2023 towards pre-deposit, the intended taking over of possession of the secured assets on 26.11.2023 shall stand deferred till the next date of hearing and the Sarfaesi measures concerning the properties mentioned in the demand notice under Sec. 13(2) except the properties which have been sold, shall also stand stalled till the next date of hearing. Even though the entire amount directed to be deposited is not paid, the Appellants are entitled to interim relief of protection because of the decision of the Division Bench of Bombay High Court in Chandrika Dairy Industries Pvt. ltd. & Ors vs. Bank of Baroda & Ors. 2018 SCC OnLine Bom 17006 and the decision of the Hon’ble Supreme Court in Narayana Chandra Ghosh vs UCO Bank & Ors AIR 2011 SC 1913.

¶23

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

¶24

As and when the said amounts are deposited, they shall be

¶25

¶26

invested in term deposits in the name of Registrar, DRAT, Mumbai, with any nationalised bank, initially for 13 months, and after that to be renewed periodically.

¶27

11 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.

¶28

Post on 08.12.2023 for reporting compliance regarding the first instalment.

Sd/-

Chairperson

mks-28

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

Case brief

What is this about?

What did the court decide?

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

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

All orders in this case

Similar cases

Mr Baburao Tukaram Navsare versus State Bank of India and Ors.

Bank of Baroda versus Sparkle Foods Ltd. & Ors.

Abdul Rahim Abdul Karim and others versus Authorised Officer Sundaram Home Finance Limited and others

Hitesh Suresh Mehta versus Idfc First Bank Ltd.

Abhinav Education Society versus Bank of Baroda

Abdul Rahim Abdul Karim and others versus Authorised Officer Sundaram Home Finance Limited and others