Partly allowed

Lalitkumar Somji Jain v. Svc Co. Operative Bank Limited

DRAT21 Dec 2023IA/809/2023

Case brief

AI extract

What is this about?

This appeal challenges an order declining stay on a secured asset sale notice. The tribunal held that the appellants must make a 50% pre-deposit of the sale notice amount under Section 18(1) to be allowed to file a reply in the appeal. Failure to pay results in dismissal.

What did the court decide?

Appeal entertained only upon payment of ₹2,40,000 deposit by 12.01.2024; failure to pay shall result in dismissal.

Lalitkumar Somji Jain versus Svc Co. Operative Bank Limited — 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. 809/2023 (WoD)

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Appeal on Diary No. 2212/2023

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Between

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Lalitkumar Somji Jain & Anr. … Appellant/s V/s. SVC Co-Operative Bank …Respondent/s

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Mr. Sachin Tiwari, Advocate for Appellants.

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Mr. Vinay Deshpande along with Mr. Rupak Swangikar, i/b M/s. V. Deshpande & Co., Advocate for Respondent.

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

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The Appellants are in appeal impugning the order dated 08.11.2023 in Interim Application (I.A.) No. 3548/2023 in Securitization Application (S.A.) No. 275/2023 on the files of the Debts Recovery Tribunal-III, Mumbai (D.R.T.) whereby the Ld. Presiding Officer declined to grant any protection to the Appellants concerning the sale notice that was issued about the secured assets by the Respondent bank under the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short). The Appellants had already filed S.A. No. 275/2023 and wanted to pay the entire amount in instalments. On 20.12.2022 an order was passed by the D.R.T. in compliance with which the Appellants paid a sum ₹2 lakhs, and a further sum of ₹1.5 lakhs was paid. The balance amount was

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undertaken to be paid in instalments of ₹20,000/- per month.

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It is contended that the Appellants defaulted on the payment of the further instalments but the said fact is disputed by the Appellants stating that there was no default in payment. However, it seems that on 27.06.2023 the matter was considered afresh by the Ld. Presiding Officer and it was observed that there is still an outstanding amount of ₹7 lakhs to be paid to the Respondent Bank and the Appellants undertook to pay the said amount in monthly instalments of ₹40,000/- each. The Appellants paid only three instalments during July, October, and November. Since only three instalments were paid, the Respondent issued a possession notice on 11.10.2023 and the possession was taken on 07.11.2023 and thereafter, a sale notice was issued on 20.11.2023. The Appellant filed I.A. No. 3548/2023 to stall the sale intended to be conducted. The Ld. Presiding Officer declined to grant any stay. The Appellants is aggrieved and hence, in appeal.

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The Ld. Counsel appearing for the Respondent Bank submits that the sale notice dated 20.11.2023 has not been fructified and therefore, a fresh sale notice has now been issued on 09.12.2023 scheduling the sale of the property by auction on 17.01.2024. The Appellants had challenged the sale notice dated 20.11.2023 in I.A. No. 3548/2023 which has been sold and therefore, to challenge the sale notice issued subsequently, the Appellants have to approach the D.R.T. afresh for relief, submits the Ld. Counsel.

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To entertain the appeal, the Appellants will have to comply with the mandatory provision u/s 18 (1) of the SARFAESI Act. As per the sale notice now issued the Respondent has demanded a sum of ₹4,82,582.50/-. The Appellants do not have a prima facie case nor are there any pleadings regarding the financial strain which are two

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ingredients necessary to invoke the indulgence of this Tribunal under the 3^rd provision to section 18 (1) of the SARFAESI Act.

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Under the circumstances, the Appellants will have to deposit 50% of the amount shown in the sale notice. The Appellants are, therefore, directed to deposit a sum of ₹2,40,000/- as pre-deposit under the provision of section 18 (1) on or before, 12.01.2024 to entertain the appeal.

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Default in payment of the amount shall entail dismissal of the appeal 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 payment is made, it 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 Respondents is at liberty to file a reply in the Appeal with an advance copy to the other side.

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Post 15.01.2024 for reporting compliance regarding the payment.

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Sd/Chairperson

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psa-03

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Lalitkumar Somji Jain v. Svc Co. Operative Bank Limited

Case brief

What is this about?

What did the court decide?

Lalitkumar Somji Jain v. Svc Co. Operative Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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