Disposed

M/s. Rim Polyplast LLP v. Bank of Baroda

DRAT23 Feb 2024IA/138/2024

Case brief

AI extract

What is this about?

In a summary order, the TRAT granted interim relief to the appellants against asset possession. The court directed a fixed pre-deposit with deferred payment terms, reduced based on demonstrated financial strain, pending the disposal of the main appeal.

What did the court decide?

Appellants directed to deposit ₹50 lakhs; possession of assets till next hearing date; fixed to pay ₹20 lakhs immediately and balance in two instalments.

M/s. Rim Polyplast LLP versus Bank of Baroda — Banking and Recovery | DRAT (2024)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson I.A. No. 138/2024 (WoD)

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In Appeal on Diary No. 364/2024 Between

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RIM Polyplast LLP & Anr. … Appellant/s

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V/s.

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…Respondent/s

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The Authorized Officer, Bank of Baroda …Respondent/s Ms. Neeta Pandit, i/b Mr. Aditya Bhatt, Advocate for Appellants. Mr. Prashant Shinde, i/b Mr. Anant Shinde, Advocate for Respondent.

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-: Order dated: 23/02/2024:-

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The matter is taken up for hearing by way of a praecipe filed by Appellants for seeking urgent relief.

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The Appellants are in appeal impugning the order dated 20.02.2024 in S.A. No. 691/2023 on the files of Debts Recovery Tribunal – II, Ahmadabad (D.R.T) whereby the Ld. Presiding Officer declined to grant any interim relief of protection to the Appellants against the action taken by the Respondent bank under the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (“SARFAESI Act”, for short) against the secured assets which are to be taken possession of on 24.02.2024.

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The Appellants have raised several contentions in the aforesaid S.A. challenging the Sarfaesi measures which state that there are two notices issued concerning the same loan to the borrowers and the guarantors on 02.05.2023. The notice to the borrowers mentions the

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outstanding demand amount as ₹ 1,33,34,694.40 while the guarantors have been issued a separate notice of even date demanding a sum of ₹ 1,21,89,236.34.

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According to the Appellants it is a discrepancy and the Appellants have also objected to that demand notice. The Respondent Bank has sent a reply u/s. 13(3A) which is not very satisfactory.

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It is further stated that the classification of the debt as NPA on 01.05.2023 is illegal. There is no default for 90 days continuously as there was a payment on 31.03.2023 as is borne out from the account statement supplied by the Respondent to the Appellants and therefore, the classification is not proper. The Ld. Counsel has also relied on a couple of judgments of the Hon’ble High Court of Allahabad in support of this view.

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The Ld. Counsel submits that the Appellants are under financial strain. The IT returns of the Appellants have been produced which indicate that they have income that is not sufficient to pay 50% of the debt due which complies with Sec. 18 (1) of the SARFAESI Act and therefore seeks indulgence of this Tribunal to reduce the mandatory pre-deposit to the minimum of 25%.

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The Ld. Counsel appearing for the Respondent submits that the papers were received only yesterday evening and therefore, the reply could not be filed, and they seek time to file a reply but it is submitted by the Ld. Counsel appearing for the Appellants that the possession of the secured assets is intended to be taken on

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24.02.2024 and hence, the urgency in hearing the application for waiver of deposit.

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The Ld. Counsels have submitted certain facts which would make an arguable case in favour of the Appellants. However, I am not entering into the merits of the case in detail because the contentions raised will have to be ultimately decided in the S.A. by the Ld. Presiding Officer. The Appellants have also to some extent produced documents to indicate that they have financial strain.

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The Ld. Counsel appearing for the Respondent has submitted that the income tax returns do not in detail give a true picture of the financial status of the Appellants therefore, it cannot be taken as substantial evidence towards proving their financial strain. Taking the entire facts and circumstances into consideration, I find that the amount mentioned in the 13(2) notice as ₹ 1,33,34,694.40 is to be taken as a threshold amount.

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The Appellants are directed to deposit a sum of ₹ 50 lakhs as pre-deposit. The Ld. Counsel appearing for the Appellants is producing a demand draft ₹ 20 lakhs today towards the pre-deposit, the balance of ₹ 30 lakhs shall be paid in two equal instalments within a gap of two weeks each.

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Numbers of Instalments	Payment on or before
1^stInstalment₹15,00,000/-	08.03.2024
2^ndInstalment₹15,00,000/-	22.03.2024

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Given the payment ₹ 20 lakhs today, the possession intended to be taken on 24.02.204 shall stand deferred till the next date of hearing. In default, the Appeal shall stand dismissed, 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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13 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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Post on 11.03.2024 for reporting compliance regarding the 1^st instalment.

rm-8

Sd/-

Chairperson

M/s. Rim Polyplast LLP v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

M/s. Rim Polyplast LLP v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

What the court decided

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