Mohammad Haq Ali v. Bank of India and Anr.

Appeal Dy. No. 751/2022 Date: 16.01.2023

Mohammad Haq Ali Vs. Bank of India & Anr.

Present: Shri Nitesh Kumar Jauhari, Advocate holding brief of Shri Ashutosh Sharma, counsel for the appellant, Shri Supriy Mishra, counsel for the respondent-Bank, Shri Paritosh Malviya, counsel for the respondent no. 2- Auction Purchaser,

As per report of the Registrar dated 14.10.2022, no predeposit has been made by the appellant. It is further reported that the respondent-Bank has already realized a sum of Rs. 1.68 crores from auction sale of the property in question against the demand of Rs. 1.81 crores and odd raised by the Bank. Since the said sale is under challenge in the present appeal, therefore, the amount realized from the same cannot be taken into consideration towards pre-deposit. This view is fortified by the Hon’ble Apex Court in Civil Appeal No. 8969 of 2022- M/s Sidha Neelkanth Paper Industries Private Limited & Another Vs. Prudent ARC Limited & Others decided on 05.01.2023 relying upon a judgment passed by the Hon’ble Bombay High Court in case of Eskays Construction Pvt. Ltd. Vs. Soma Papers and Industries Ltd. & others, 2016 SCC OnLine Bom. 9827, wherein it is held that it will not be open for the borrower to pray to use the sale proceeds received from the sale of the secured properties to be adjusted/given credit in an application for waiver of predeposit.

Moreover, the third proviso of section 18 of the SARFAESI Act says that the Appellate Tribunal may, for the reasons to be recorded in writing, reduce the amount to not less than 25% of the debt referred to in the second proviso.

In the present case, the appellant has not deposited any amount towards minimum deposit of 25% of the amount due, which is mandatory in nature in view of the third proviso of section 18 of the SARFAESI Act, as the amount realized by the Bank from auction sale of the property of the appellant cannot be taken into consideration towards pre-deposit in view of the judgment passed by the Hon’ble Apex Court in the case referred above.