Disposed

Ms Satyam Industries v. Deustche Bank

DRAT20 Jun 2023MISC APPEAL/141/2023

Case brief

AI extract

What is this about?

The Tribunal in I.A. No. 399/2023 addressed an application by Appellants for waiver/reduction of pre-deposit in a SARFAESI appeal against a stayless order. Directing a fixed pre-deposit of ₹6 crores, the Tribunal granted an immediate stay on SARFAESI measures upon part-payment, allowing the appeal to proceed subject to instalment compliance.

What did the court decide?

Directed deposit of ₹6 crores as pre-deposit; ₹60,00,000 to be deposited together with a stay on SARFAESI measures; balance in three instalments.

Ms Satyam Industries versus Deustche Bank — Insolvency and Bankruptcy | DRAT (2023)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson I.A. No. 399/2023

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Appeal on Diary No. 989/2023 Between

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M/s. Satyam Industries & Ors. … Appellant/s

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V/s.

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Deutsche Bank …Respondent/s

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Mr. Rishabh Shah, along with Ms. Sarika Gawde, i/b Manmohan Rao, Advocate for Appellant.

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Mr. Rajesh Nagori, i/b Mr. R.L. Motwani, Advocate for Respondent.

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-: Order dated: 20/06/2023:-

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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 13.06.2023 in Securitisation Application (S.A.) No. 215/2023 on the files of Debts Recovery Tribunal – II, Mumbai (D.R.T). The Ld. Presiding Officer had declined to grant any stay of the Sarfaesi measures initiated by the Respondent Bank for the realisation of the amount due from the Appellant.

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The I.A. No. 399/2023 is an application for waiver of deposit filed u/s. 18 (1) of the Securitisation & Reconstruction of Financial Asset & Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’, for short) wherein the Appellant seeks indulgence of this Tribunal to reduce the amount of pre-deposit to the minimum of 25% as provided under the third proviso to Sec. 18 (1).

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The amount due according to the Respondent as of date is around ₹16 crores. The notice u/s. 13 (2) of the SARFAESI Act dated 02.09.2021 demanded an amount of ₹ 12.69 crores together with future interest. As of the date of sale, the amount was more than ₹ 13 crores. The property is allegedly sold for ₹ 9.5 crores and 25% of the sale consideration has already been deposited by the auction purchaser. The Appellants had made a proposal before the Debts Recovery Tribunal (D.R.T) to regularize the account by paying the amounts in instalments. They had already deposited ₹ 20,00,000/- and the balance amount was undertaken to be deposited in instalments.

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The Ld. Presiding Officer was not enthused by the said proposal in view of the fact that the outstanding amount even for regularisation of account is more than ₹ 3.5 crores. Therefore, the Appellants would have to pay more amount even towards the overdue. The meagre amount proposed would come to less than the amount that is required for regularising the account.

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The Appellants in order to entertain this appeal will have to first cross the hurdle of making a pre-deposit to entertain the appeal. The amount due according to the sale notice is around ₹ 13.5 crores. The Appellants have pleaded that they are under financial strain because three of the Appellants were suffering from various illnesses like cancer, black fungus and corona and therefore, their business had come to a standstill. The income tax returns have been filed which indicate that the income was meagre during the Covid period

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and subsequently, it has picked up but still, the firm is running at a loss and therefore, the income that is derived is negligible.

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The Appellants would contend that they are making earnest attempts to repay the amount due. Considering their bonafides to pay off the debt, indulgence may be shown to reduce the amount of pre-deposit, submit the Ld. Counsel for the Appellants.

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Taking the amount due as ₹ 16 crores as of date, the Appellants are directed to deposit a sum of ₹ 6 crores as pre-deposit. The Appellants are offering to deposit a sum of ₹ 60,00,000/towards the said pre-deposit amount today by way of a demand draft. The balance amount shall be paid in three equal instalments within a gap of two weeks each. The first instalment of ₹ 1,80,00,000/- shall be payable on or before 04.07.2023, the second instalment of ₹ 1,80,00,000/- shall be payable on or before 18.07.2023 and the third instalment of ₹ 1,80,00,000/- shall be payable on or before 01.08.2023.

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In view of the payment of ₹ 60,00,000/- today, the further Sarfaesi measures shall stand stayed. Failure on the part of the Appellants to pay the instalments on time shall entail in 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 in the name of 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,

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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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The Ld. Counsel appearing for the Appellants submits that he would like to implead the auction purchaser also in the proceedings pending before the Debts Recovery Tribunal, (D.R.T). He is at liberty to take appropriate steps.

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Post on 05.07.2023 for reporting compliance concerning the payment.

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Sd/Chairperson

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rm-7

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Ms Satyam Industries v. Deustche Bank

Case brief

What is this about?

What did the court decide?

Ms Satyam Industries v. Deustche Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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