Allowed

Vimal Tyers and Anr. v. Bank of Baroda

DRAT8 Dec 2023MISC APPEAL/57/2024

Case brief

AI extract

What is this about?

The DRAT allowed the appeal by ordering the appellant to deposit ₹75 lakhs as pre-deposit. Upon payment, the taking over of possession was deferred. The court applied Sidha Neelkanth Paper Industries guidelines requiring infirmities to be balanced by pre-deposit.

What did the court decide?

Appellants directed to deposit ₹75 lakhs as pre-deposit; taking over of possession deferred on payment of the first instalment.

Vimal Tyers and Anr. versus Bank of Baroda — Company and Corporate | DRAT (2023)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr. Justice Ashok Menon, Chairperson I.A. No. 793/2023 (WoD)

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In Appeal on Diary No. 2219/2023

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Between

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M/s. Vimal Tyres & Anr. … Appellant/s V/s. Authorized Officer, …Respondent/s

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Authorized Officer, Bank of Baroda

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An Advocate for the Appellant is present. Ms. Mumtaz Khan, i/b B. Sharma, Advocate for Respondent.

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The Appellants have challenged the order dated 05.12.2023 in Securitization Application (S.A.) No. 307/2021 on the files of the Debts Recovery Tribunal-II, Ahmedabad (D.R.T.) wherein the urgency of the Appellants to stall the taking over the possession of the property scheduled to be taken on 10.12.2023 was not considered for early hearing of the matter. As a result, the Appellants are facing the threat of dispossession from the secured assets on the 10th instant. It seems that the earlier the Appellants have come up with the proposal to settle the matter and the D.R.T. has directed to deposit a sum of ₹45 lakhs as a condition precedent for granting protection to the Appellants and as per that order dated 21.10.2023 a sum of ₹45 lakhs was deposited by the Appellants. But it does not seem that the said order has been vacated subsequently. In case of default the payment of the said amount the order should have been

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vacated. The order is also not time-bound and therefore, from the reading of that order, it is indicative of the fact that the protection order continued. However, in the order dated 05.12.2023 the Ld. Presiding Officer did not stall the taking over possession of the property on 10.12.2023 and instead adjourned the matter to 08.12.2023 without hearing the Appellants. The Appellants, therefore, are under apprehension that they may be dispossessed of the property.

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The Appellants have challenged the Sarfaesi measures on various grounds starting from the demand notice u/s 13 (2) is does not give a bifurcation of the interest and principal amount. It also does not state correct the rate of interest that is calculated and it is also contended the symbolic possession u/s 13 (4) was taken without complying with the rule. It is further contended that the order u/s 14 for taking physical possession of the property for assigned to the court staff consisting of stenographers and a bench clerk which according to the Appellants is not proper, as they are not strictly officers subordinate to the Magistrate. The contentions will have to be heard in detail. The Appellants plead that they are under pecuniary strain. The income tax returns of the Appellants have been produced to indicate that their income is negligible and therefore, they are not in a position to pay 50% of the amount of debt due as pre-deposit contemplated under Sec. 18(1) of the SARFAESI Act.

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The Ld. Counsel appearing for the Respondent submits that after adjusting the amount of ₹45 lakhs paid by the Appellants, there

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is still a balance of ₹3,05,66,372/- due as of 31.10.2023 and therefore, the Appellants are to deposit 50% of that amount.

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Since, the Appellants are challenging the Sarfaesi measures up to measures taken u/s 14 of the SARFAESI Act as per the decision of the Hon’ble Supreme Court of India Sidha Neelkanth Paper Industries Pvt. Ltd. & Ano. vs. Prudent ARC Ltd & Ors., 2023 SCC OnLine SC 12, the Appellants are liable to pay the amount based on the amount mentioned in the demand notice u/s 13 (2) which in this case is ₹2,24,49,856/-. The Appellants to some extent pointed out the infirmity of the Sarfaesi measures which required consideration and hence, it is found that they have an arguable case. It is also convincing that they are under certain financial strain. Hence, the Appellants are directed to deposit a sum of ₹75 lakhs as pre-deposit. The Ld. Counsel appearing for the Appellants are producing a demand draft for ₹18 lakhs today. The balance amount shall be paid in two equal instalments within a gap of two weeks each, as stated

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hereunder.

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Numbers of Instalments	Payment on or before
1^stInstalment of₹28,50,000/-	22.12.2023
2^ndInstalment of₹28,50,000/-	05.01.2024

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Given the payment made today, the taking over possession of the subject property scheduled on 10.12.2023 (Sunday) shall stand deferred till the next date of hearing.

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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-12

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Vimal Tyers and Anr. v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

Vimal Tyers and Anr. v. Bank of Baroda

Case brief

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