Partly allowed

Mr Ram Uttamlal Ramdhani and Another v. Hdfc Bank

DRAT9 May 2024IA/320/2024

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal fixed a partial pre-deposit of Rs. 80 lakhs for the appellants in an appeal against SARFAESI measures, acknowledging their financial difficulty while rejecting a total waiver, and adjudicated pending reservation on constitutional rights under Section 18(1) of the SARFAESI Act. The appeal was entertained conditionally pending compliance.

What did the court decide?

Appellant directed to deposit Rs. 80 lakhs in three installments within two weeks to entertain appeal; sale subject to appeal decision.

Mr Ram Uttamlal Ramdhani and Another versus Hdfc Bank — Insolvency and Bankruptcy | DRAT (2024)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr. Justice Ashok Menon, Chairperson I.A. No. 320/2024 (WoD)

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In Appeal on Diary No. 982/2024

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Between

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Ram Uttamlal Ramdhani & Anr. … Appellant/s V/s. HDFC Bank Ltd. & Ors. …Respondent/s Mr. K. Mainkar along with R. Kulkarni, Advocate for Appellants. Shreesh Oak, i/b M/s. SC Legal, Advocate for Respondents.

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

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The Appellants are in appeal impugning the order dated 08.04.2024 dismissing the Securitization Application (S.A.) No. 91/2021 by the Debts Recovery Tribunal, Pune (D.R.T.) and the Appellants are borrowers/Mortgagors who had admittedly borrowed the money from the Respondent HDFC bank and defaulted in repayment which resulted in the account being classified as Non-Performing Assets (NPA). The issued u/s 13 (2) the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short) was issued on 14.08.2019 at multiple addresses of the Appellants including the address of the secured assets which is, Flat at Unit No. 102, first floor, Serenade Royal, Survey No. 110/11/2/P Baner, Mhalunge Road, Pune. The Appellants did not respond to the notice u/s 13 (2) and in

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consequence, the symbolic possession was taken on 13.11.2019 and thereafter, an order was obtained u/s 14 of the SARFAESI Act from the District Magistrate to take the physical possession of the property and accordingly, the physical possession of the secured asset was taken on 26.02.2021. Thereafter, the property was put up for sale and an auction notice was published. The Appellants came to know about the auction and immediately approached the D.R.T. and filed the S.A. on 09.07.2021.

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The Appellants contend that they have never been served any notice allegedly issued u/s 13 (2). Nor do they know about taking over the symbolic possession or physical possession in consequence of order u/s 14 of the SARFAESI Act. They came to know about the proceedings only when the auction notice was published and therefore, they seek to quash the entire Sarfaesi measures taken by the Respondent bank.

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In the impugned order the D.R.T. found that the notices were attempted to be served at the multiple addresses of the Appellants which were all found to be locked and returned unserved. A publication was made in two newspapers including a vernacular newspaper. The Appellants’ allegation that they were not aware of the Sarfaesi measures, and therefore, the demand notice is not served. The notices were attempted to be served at multiple addresses which, though admitted to be their addresses, were allegedly not occupying it. The Appellants are allegedly staying at a particular address which is mentioned in the sanction letter of the loan. The averment that the Appellant should have been served only that address where they were allegedly staying.

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It is submitted that the property has now been sold and the 25 % of the sale consideration has already been deposited by the auction purchaser and the balance payment is awaited.

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The Appellants have filed this appeal and also I.A. No. 320/2024 for waiver of the 25% mandatory of pre-deposit. The Ld. Counsel appearing for the Appellants submits that the Appellants have a good prima facie case and that they are under financial strain. The income tax returns that have been produced to substantiate their case of impecuniosity and hence, the Ld. Counsel for the Appellants urges that the discretionary power of this Tribunal under the 3^rd proviso to section 18 (1) may be exercised in their favour to keep mandatory pre-deposit at a minimum of 25% of the debt dues.

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The Respondent bank appeared and vehemently opposed this application for waiver, and opposed any concession to be granted to the Appellants. It is stated that the Appellants were attempted to be served at three different addresses which have been furnished by them to the bank and that now the Appellants claim that they are residents at a fourth address. Documents regarding attempted service have been produced and it seems that the premises were found to be locked and no one accepted the notice. The Respondents have also contended that the notices were pasted at the premises and despite that, no responses were forthcoming. Despite publication notices in multiple newspapers, the Appellants did not come forward to challenge the Sarfaesi action. The possession was taken on 26.02.2021 and the S.A. was filed on 09.07.2021. Hence, it is barred by the limitation, submits the Ld. Counsel appearing for the Respondents.

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The Ld. Presiding Officer however, did not agree with the contentions that the S.A. is barred by the limitations stating that the Appellants are entitled to benefit from the decision of the Hon’ble Supreme Court in Suo-Moto Writ Petition No. 03/2020 wherein, an extension of limitation was granted during the Covid-19 Pandemic.

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The Respondents would contend that the amount due as of date is approximately a sum of ₹1.97 crores and therefore, the Appellants be directed to 50% of that amount.

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Taking into consideration, the rival contentions raised by the parties, I find that prima facie service of notice appears to be good because the addresses are not disputed. The notices are attempted to be served on the address including the secured asset, all of which admittedly belong to the Appellants. Moreover, the notices were published in two newspapers which have wide circulation in Pune where the Appellants are admittedly residing. Under the circumstances, the prima facie, a presumption u/s 27 of the General Clauses Act will be attracted as regards the service of notice on the Appellants. They, do not have a strong prima facie case in their support. However, they have to some extent been successful in proving their impecuniosity. Hence, they are not entitled to get a waiver of 25% of the pre-deposit though they are entitled to some concession and I do not intend to throw the appeal overboard at the threshold. The Appellants are, therefore, directed to deposit a sum of ₹80 lakhs as pre-deposit for the appeal to get entertained. The said amount shall be deposited into three instalments within the gap of two weeks each as stated hereunder.

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Numbers of Instalments	Payment on or before
1^stInstalment of₹30 lakhs	24.05.2024
2^ndInstalment of₹30 lakhs	07.06.2024
3^rdInstalment of₹20 lakhs	21.06.2024

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The sale which has taken place shall be subject to the ultimate decision of this appeal.

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Default in payment of any of the instalments/amount 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.

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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 are at liberty to file a reply in the Appeal with an advance copy to the other side.

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Post on 27.05.2024 for reporting compliance regarding the payment of the 1^st instalment.

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Sd/Chairperson

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psa-13

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Mr Ram Uttamlal Ramdhani and Another v. Hdfc Bank

Case brief

What is this about?

What did the court decide?

Mr Ram Uttamlal Ramdhani and Another v. Hdfc Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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