Disposed

Prajakta Makarand Patil v. Encore Asset Reconstruction Company Pvt. Ltd.

DRAT29 Mar 2023MISC APPEAL/127/2023

Case brief

AI extract

What is this about?

In an interim appeal challenging SARFAESI proceedings, the Tribunal observed that the sale had not yet been challenged. It allowed waiver of the full security deposit, accepting a 25% payment today and the balance within two weeks to stall handing over possession to the auction purchaser.

What did the court decide?

The appeal is kept pending subject to deposit of Rs. 25,00,000/- immediately and the balance Rs. 5,00,000/- by 12.04.2023; possession to be stalled upon compliance.

Prajakta Makarand Patil versus Encore Asset Reconstruction… — 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. 192/2023 (WoD) In

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Appeal on Dairy No. 464/2023

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Between

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Prajakta Makara n d Patil & Anr. … Appellant/s V/s.

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Encore Asset Re c onstruction Company Pvt Ltd. …Respondent/s Advocate for Ap p ellant is present. Mr. Archit Virm a ni, along with Mr. Atul Gupta and Ms. Dhvani Jain, i/b M/s. Optim u s Legal, Advocate for Respondent.

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-: Order dated: 29/03/2023:-

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The matter is t a ken up for hearing by way of Praecipe filed by Appellant for s e eking urgent relief. The Appell a nt is in appeal impugning the o r der dated 16.03.2023 in I.A. No. 9 32/2023 in S.A. No. 119/2023 o n the files of D.R.T- III, Mumbai. Wherein, the Ld. PO refuses to gr a nt any stay handing over possessi o n of the property under provisions of the SARFAESI Act. 2. The Appell a nt has raised a number of objecti o ns to the Sarfaesi measures taken b y the Respondent Bank. Among them, it is stated that the notice u / s. 13 (2) is not in accordance with the law. 3. The details of the Authorised Officer is not shown. The break up of the principal amount in the interest is not d e tailed as required u/s. 13(3) and m oreover, the notice is not properly served. It is pointed out that the notice u/s. 13 (4) was also not properly served

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and the publication is made in two unknown newspapers in vernacular and English which are never heard of.

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It is also submitted that the Respondent is a second assigner of the debt which was originally sanctioned, by the IDBI and thereafter transferred first to Bajaj Finance and then to the Respondent. The assignment deed is not properly stamped and therefore not acceptable. The Appellants state that they are not defaulters. The demand as per 13 (2) notice dated 28.02.2020 was for a sum ₹ 91,80,710/- and the Appellants have subsequent to that paid a total sum of ₹ 23,00,000/-. The property was sold for ₹ 99,00,000/-. The Applicants state that they are under financial strain and the IT return has been filed to prove that they have little income.

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It is submitted that the Appellants have a good prima facie case and therefore the amount to be paid u/s. 18 (1) may be reduced to 25 % of the amount that is due. According to the Appellants, the amount due from them would be around ₹ 1 crores and the Appellant is producing a DD for ₹ 25,00,000/- today.

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Per-contra, the Ld. Counsel appearing for the Respondent seeks time to file a detailed reply but considering the urgency that the property is scheduled to be given possession to the auction purchaser on 31.03.2023, it is submitted that the Appellants do not have a good case to set aside the Sarfaesi measures. The contentions regarding notice u/s. 13 (2) and 13 (4) cannot be sustained for the simple reasons that subsequent to acceptance of the notice the Appellants have admittedly made payments. They have also sent a letter to the Respondent admitting the liability over ₹ 1 Crores and it

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is also stated that the objections ought to be considered to be waived in view of the subsequent act of the Appellants.

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Moreover, it is also stated that the Appellants cannot stall the handing over the possession to the auction purchaser because the sale is not yet challenged in the pending S.A. before the D.R.T. In answer to that Ld. Counsel for the Appellants submits that the Appellants intend to file an application for amendment incorporating the prayer for setting aside the sale as well.

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The present application is for waiver of deposit. The amount admittedly would come to around ₹ 1 crore. The Appellants plead that the exercising the jurisdiction of this Tribunal under third proviso u/s. 18 (1) it may be reduced to 25 %. 9. Considering the entire facts and circumstances of this case. this Tribunal agrees that the sale has not yet been challenged because the amendment is only intended to be filed before the D.R.T. But for entertaining this appeal, the Appellants will have to deposit ₹ 30,00,000/-. Since, the Appellants are producing a Demand Draft for ₹ 25,00,000/- today. The balance of ₹ 5,00,000/- shall be deposited within two weeks, on or before 12.04.2023. Since the Appellant is depositing a sum of ₹ 25,00,000/- the handing over possession to the auction purchaser can be stalled till the next date of hearing.

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The Respondent is at liberty to file a detailed reply to the appeal as well as this application.

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In default of payment, 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

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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 13.04.2023 for reporting compliance concerning the payment.

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Sd/Chairperson

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rm-7

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Prajakta Makarand Patil v. Encore Asset Reconstruction Company Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Prajakta Makarand Patil v. Encore Asset Reconstruction Company Pvt. Ltd.

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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Prajakta Makarand Patil versus Encore Asset Reconstruction Company Pvt. Ltd.