Disposed

Prabhatabhai Rice Mill and Ors. v. Icici Bank Limited

DRAT17 Sept 2024IA/398/2024

Case brief

AI extract

What is this about?

The DRAT directed appellants to deposit ₹20 lakh as pre-deposit within a week and balance ₹32 lakh within two weeks to entertain their appeal. The challenges to SARFAESI actions were deemed waived due to prior OTS acceptance. Possession until an appeal was deferred subject to payment.

What did the court decide?

Deferred taking of possession on possession date; directed deposit of ₹20 lakh by 19.09.2024 and remaining ₹32 lakh by 03.10.2024.

Prabhatabhai Rice Mill and Ors. versus Icici Bank… — Contract and Commercial Disputes | 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. 398/2024(WoD)

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Appeal on Diary No. 1246/2024

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Between

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Prabatabai Rice Mill & Anr. … Appellant/s V/s.

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ICICI Bank Ltd. …Respondent/s

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Mr S. B. Hemke, Advocate for the Appellants appeared through Video Conferencing.

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Mr Santosh Bhide, i/b M/s Bhide and Associates, Advocate for Respondent Bank.

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-: Order dated: 17/09/2024:-

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The appellants who are the borrowers impugn the order dated 10.05.2024 dismissing Interlocutory Application (I.A.) No. 751 of 2024 in Securitisation Application (S.A.) No. 159 of 2024 on the files of the Debts Recovery Tribunal, Nagpur (D.R.T.) wherein the appellants had sought protection from the Sarfaesi action initiated by the respondent bank for recovery of debt due from them under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act,” for short). The Ld. Presiding Officer in the impugned order has recorded that the appellants were willing to pay ₹10 lakhs on or before 13.05.2024 and had agreed to settle the debt within six months and an

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OTS proposal was also submitted which was accepted by the respondent bank on 27.09.2023. Thereafter, they failed to make the payment and hence, the Tribunal below declined to grant any

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protection to the appellants.

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The appellant will have to first comply with the mandatory provisions under Sec. 18(1) of the SARFAESI Act to get this appeal entertained. The appellants had challenged the demand notice under Sec. 13(2), order under Sec. 14 and also the steps taken for taking possession of the property.

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In view of the OTS proposal which was submitted and the acceptance of the proposal by the bank, it has to be observed that the challenges raised by the appellants would stand waived in view of the decision of the Hon’ble Supreme Court in Arce Polymers Private Limited vs. Alphine Pharmaceuticals Private Limited & Ors. (2022) 2 SCC 221 . The Ld. Presiding Officer, therefore, was justified in not granting any protection to the appellants. The appellants definitely do not have any prima facie case in challenging that order. In the application for waiver, they have also not specified regarding their financial strain, and therefore, on these two counts, the appellants are not entitled to any indulgence on the part of this Tribunal to get a waiver of 25% of the pre-deposit. Since the Sarfaesi measures are the stage of taking possession under Sec. 13(4), the amount mentioned in the demand notice issued under Sec.13(2), being ₹1,05,26,002.56 should be taken as the threshold amount as per the decision of the Hon’ble Supreme Court in Sidha Neelkanth Paper Industries Private Limited & Ano. vs. Prudent ARC Limited & Ors. 2023 SCC OnLine SC 12 and therefore, the appellants are directed to deposit a sum of ₹52 lakhs as pre-deposit for entertaining this appeal. The Ld. Counsel appearing for the appellants submits that the possession is scheduled on 19.09.2024 and

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therefore, the appellants are directed to deposit a sum of ₹20 lakhs towards pre-deposit by 3:00 pm on 19.09.2024 with intimation to the Registrar of this Tribunal, and the also to the Ld. Counsel appearing for the bank, and the balance amount of ₹32 lakhs shall be paid within two weeks thereafter on or before 03.10.2024.

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Failure to pay the instalment/amount within the time stipulated would entail in dismissal of the appeal without any reference to this Tribunal.

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Subject to the payment of the aforesaid amount within the stipulated time, the taking over of possession on the 19^th instant shall stand deferred till the next date of hearing.

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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 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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