Disposed

Akar Creations Pvt. Ltd. v. Canara Bank

DRAT12 Jul 2024IA/237/2022

Case brief

AI extract

What is this about?

This order directs the appellant companies to deposit a sum of ₹20 crores as pre-deposit in two installments to entertain the appeal against SARFAESI measures. The tribunal noted non-compliance with financial disclosure requirements denied relief for reduced deposit.

What did the court decide?

Direction to deposit ₹20 crores in two installments by 02.08.2024 and 23.08.2024 to entertain the appeal.

Akar Creations Pvt. Ltd. versus Canara Bank — Company and Corporate | DRAT (2024)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present : Mr. Justice Ashok Menon, Chairperson

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I.A. No.237/2022 (WoD)

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Appeal on Diary No.467/2022

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Between

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Akar Creations Pvt. Ltd. & Ors. … Appellant/s V/s.

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Canara Bank …Respondent/s

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Ms Sanjana Ghogare, Advocate for Appellants.

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Mr Raju Shinde along with Ms Tamil Selvi Laxman, Advocates for Respondent.

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The appellants are in appeal impugning the order dated 27.05.2022 in I.A. No.568/2022 in S.A. No.37/2020 (T.S.A. No.106/2023) on the files of Debts Recovery Tribunal-I, Mumbai filed by them seeking an interim relief of protection against the Sarfaesi measures initiated by the Respondent Bank for recovery of debts due under the provisions of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short). The D.R.T. refused to grant any protection to the appellant and dismissed the application. Aggrieved by that, the appellants are in appeal.

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To entertain the appeal, the appellants will have to first comply with the mandatory provision of making the pre-deposit under Sec. 18(1) of the SARFAESI Act. The 13(2) notice was issued demanding

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the sum of ₹22,29,54,813.55. There was no response to that and

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consequently, symbolic possession was taken in 2019 under Sec. 13(4) and an order under Sec. 14 was also obtained from the Ld. District Magistrate, Goa.

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The appellants had filed the S.A. challenging the Sarfaesi measures on various grounds. It is contended that the classification of the account as NPA was not in accordance with the RBI guidelines. It is further contended that the demand notice under Sec. 13(2) does not give bifurcation of the principal and interest claimed as required under Section 13(3) of the SARFAESI Act. It is also contended that the nine-pointer affidavit is not considered by the Ld. District Magistrate, Goa in the order under Sec. 14 of the SARFAESI Act, and therefore, the entire SARFAESI measures need to be quashed.

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The Ld. Counsel appearing for the respondent bank submits that as of 01.02.2024, the outstanding dues is ₹56,46,72,144.20 and that the appellants have not paid any amount towards that. It seems that multiple attempts to sell the property had failed and the sale notice was issued on 31.03.2022. The outstanding debt was ₹41,36,31,107.65. The appellants have not produced any documents to indicate their financial strain. The 1^st and 2^nd appellants are companies. The balance sheets are not forthcoming. The Income Tax Returns of the directors of the companies who are the rest of the Appellants are also not forthcoming. Hence, the appellants have not complied with the requirements of getting the mandatory predeposit reduced to the minimum of 25% exercising jurisdiction under the 3^rd proviso to Section 18(1). The appellants are, therefore, directed to deposit the sum of ₹20 crores as pre-deposit for

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entertaining this appeal. The 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 Crore	02.08.2024
2^ndInstalment of₹10 Crore	23.08.2024

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Default in payment of any of the amount/instalment on time shall entail the 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/RTGS with the Registrar of this Tribunal. Payment by RTGS shall be communicated to the Registry for verification.

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As and when the said amount is deposited, it 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 respondent is at liberty to file a reply in the appeal with an advance copy to the other side.

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List on 05.08.2024 for reporting compliance regarding the payment of the 1^st instalment.

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Sd/Chairperson

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Nidhi-08

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Akar Creations Pvt. Ltd. v. Canara Bank

Case brief

What is this about?

What did the court decide?

Akar Creations Pvt. Ltd. v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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