Dismissed

Yerram Venkata Ramana v. Karur Vysya Bank

DRAT17 Apr 2023

Case brief

AI extract

What is this about?

The appellant sought a waiver from making the pre-deposit under Section 18 of the SARFAESI Act, arguing auction proceeds should be adjusted. The Tribunal dismissed the application, holding sale proceeds cannot offset the debt due for pre-deposit purposes unless the challenges to the auction itself are also before the court, and directed a fresh deposit.

What did the court decide?

Application dismissed; Appellant directed to deposit Rs.2,66,93,495/- with interest.

Yerram Venkata Ramana versus Karur Vysya Bank — Banking and Recovery | DRAT (2023)

¶12

“13. As per Section 2(ha) of the SARFAESI Act, “debt” shall have the same meaning assigned to it in clause (g) of Section 2 of the Act 1993. As per section 2(g) of the Act 1993, “debt” means any liability inclusive of interest which is claimed as due from any person….., by a bank or a 17 financial institution during the course of any business activity undertaken by the bank or the financial institution, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on the date of the application. That the “debt” means any liability inclusive of interest. As per Section 18 of the SARFAESI Act, any person aggrieved, by any order made by the DRT under section 17, may prefer an appeal within thirty days to an appellate Tribunal (DRAT) from the date of receipt of the order of DRT. Second proviso to section 18 provides that no appeal shall be entertained unless the “borrower” has deposited with the Appellate Tribunal fifty percent of the amount of “debt due” from him, as claimed by the secured creditors or determined by the DRT, whichever is less and only and only then, an appeal under Section 18 of the SARFAESI Act is permissible against the order passed by the DRT under Section 17 of the SARFAESI Act. Under Section 17, the scope of enquiry is limited to the steps taken under Section 13(4) against the secured assets. Therefore, whatever amount is mentioned in the notice under Section 13(2) of the SARFAESI Act, in case steps taken under Section 13(2)/13(4) against the secured assets are under challenge 18 before the DRT will be the ‘debt due’ within the meaning of proviso to Section 18 of the SARFAESI Act. In case of challenge to the sale of the secured assets, the amount mentioned in the sale certificate will have to be considered while determining the amount of pre-deposit under Section 18 of the SARFAESI Act. However, in a case where both are under challenge, namely, steps taken under Section 13(4) against the secured assets and also the auction sale of the secured assets, in that case, the “debt due” shall mean any liability (inclusive of interest) which is claimed as due from any person, whichever is higher.”

Yerram Venkata Ramana v. Karur Vysya Bank

Case brief

What is this about?

What did the court decide?

Issues for consideration

Cases cited

Parties & counsel

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Yerram Venkata Ramana v. Karur Vysya Bank

Case brief

What is this about?

What did the court decide?

Issues for consideration

Cases cited

Parties & counsel

Coram

Case details

All orders in this case

Similar cases

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Ms Tersus Disinfectant Solution Private Limited versus Union Bank of India and Anr.

Ms Sri Abhishek Steel and Power Ltd. versus Asset Reconstruction Company Indai Ltd.

Mr Kurmala Satyanarayana versus Andhra Bank

What the court decided

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