Partly allowed

Mohd Shamshad Mohdrahmat@ Anr. v. Piramal Capital and Housing Finance Ltd.

DRAT8 Dec 2023MISC APPEAL/192/2024

Case brief

AI extract

What is this about?

The Tribunal disposed of the interim application seeking relief against SARFAESI measures. Allowing a hearing only upon deposit of 30 lakhs, the court fixed a 25% pre-deposit schedule and ordered a stay of enforcement measures conditional on immediate payment.

What did the court decide?

Stay of SARFAESI measures upon payment of ₹30 lakhs pre-deposit in two instalments starting with ₹9.50 lakhs by 3:00 PM on the same date.

Mohd Shamshad Mohdrahmat@ Anr. versus Piramal Capital and… — 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. 795/2023 (WoD)

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Appeal on Diary No. 2209/2023

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Between

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Mod Shamshad Mahdrahmat & Anr. … Appellant/s V/s. Piramal Capital & Housing Finance Ltd. …Respondent/s Mr. K.C. Pandy, Advocate for Appellants. Mr. R.L. Motwani, 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 impugned the order dated 21.11.2023 in Interim Application (I.A.) No. 3736/2023 in Securitization Application (S.A.) No. 471/2023 on the files of the Debts Recovery Tribunal-III, Mumbai (D.R.T.) whereby the Ld. Presiding Officer declined to grant any Interlocutory relief to the Appellants against the Sarfaesi measures initiated by the Respondent Financial Institution for recovery of the debt due to them under the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short). It seems that the Appellants had come up with an OTS proposal and had agreed to pay a certain amount of the instalments. The Appellants paid the ₹35 lakhs in instalment towards the OTS but the payment of the balance was defaulted, as a result of which

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the Ld. Presiding Officer held the Appellants were not entitled to any interlocutory relief concerning the Sarfaesi measures and the I.A. was dismissed.

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The Appellants would contend that the Ld. Presiding Officer has not gone into the merits of the contentions raised in the S.A. in which various contentions challenging the Sarfaesi measures have been raised. It is contended that there is non-compliance of Subsection (3) to Section 13 of the SARFAESI Act as the bifurcation amount has not been given. It is also contended that the service of demand notice is not proper. The symbolic possession of the subject property was taken on 13.04.2022 without compliance with Rule 8 of the Security Interest(Enforcement) Rules, and therefore, contended that the Appellants have a very strong prima facie case. It is further contended that they are under financial strain. They have little income and the income tax has not been paid for the last couple of years because they don’t have taxable income. The 2^nd Appellant is suffering from the illness and the amounts are to be spent toward the medical. Hence, the Appellants seek the indulgence of this Tribunal to reduce the amount of mandatory pre-deposit u/s 18 (1) to the minimum of 25% invoking the jurisdiction of this Tribunal under the 3^rd proviso to section 18 (1) of the SARFAESI Act.

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The Ld. Counsel appearing for the Respondent Financial Institution vehemently opposes this application stating that the Appellants are not entitled to any indulgence that may be directed to deposit 50% of the debt due for entertaining the appeal. It is submitted that the Ld. Counsel appearing for the Respondent that the Appellants did not pursue the application before the D.R.T. on

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merits. They voluntarily came up with the OTS proposal agreeing to clear the debt but having failed to comply with the payment of the instalments they cannot claim to have the right to pursue the challenge to the Sarfaesi measure and it has to be considered to have been waived.

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The Ld. Counsel appearing for the Appellants submits that despite having failed to comply with the OTS proposal the Appellants are still entitled to maintain the challenge to the Sarfaesi measures raised by them in the S.A. and therefore, it was improper on the part of the Ld. Presiding Officer to have declined to protect the Appellants for not having complied with the OTS proposal without going into the merits of the challenges raised in this application. The Respondent had demanded a sum of ₹1,13,76,022/under section 13 (2) as of 27.04.2021. After that, there was a payment of ₹ 35 lakhs which is not disputed. As of date, there is an outstanding amount of around ₹85 lakhs payable by the Appellants submit the Ld. Counsel appearing for the Respondent on instruction. The statement of account is produced which indicates that the amount due from the Appellants after making the payment of ₹35 lakhs as of 08.11.2023 is ₹83,13,009.98/-.

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Taking the entire facts and circumstance of this case, I find that the Appellants will have to deposit a sum ₹30 lakhs as pre-deposit for entertaining the appeal. Toward that amount the Ld. Counsel appearing for the Appellants undertakes to produce the demand draft of ₹9.50 lakhs today by 3.00 PM. The balance amount shall be paid in two instalments, as stated hereunder.

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Numbers of Instalments	Payment on or before
1^stInstalment of₹10,00,000/-	22.12.2023
2^ndInstalment of₹10,50,000/-	12.01.2024

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Subject to payment of ₹9.50 lakhs today by 3:00 PM, there shall be a stay of the Sarfaesi measures till the next date of hearing. 7. Default in payment of any of the instalments/amount 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 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 Respondents is at liberty to file a reply in the Appeal with an advance copy to the other side.

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Post on 26.12.2023 for reporting compliance regarding the payment of the 1^st instalment.

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Sd/Chairperson

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psa-32

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Mohd Shamshad Mohdrahmat@ Anr. v. Piramal Capital and Housing Finance Ltd.

Case brief

What is this about?

What did the court decide?

Mohd Shamshad Mohdrahmat@ Anr. v. Piramal Capital and Housing Finance Ltd.

Case brief

What is this about?

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