The Debt Recovery Appellate Tribunal examined an appeal challenging enforcement of security under the SARFAESI Act. It directed the appellants to deposit ₹1 crore as pre-deposit and deferred possession of the asset pending payment.
Directed deposit of ₹1 crore; possession of secured asset deferred pending payment of initial instalment.
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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present : Mr. Justice Ashok Menon, Chairperson I.A. No.418/2024 (WoD)
In Appeal on Diary No.572/2024
Between
Gajalee Coastal Food Pvt. Ltd. & Ors. … Appellant/s V/s. Karnataka Bank Ltd. & Ors. …Respondent/s
Mr Rishabh Shah i/b M/s. Raval-Shah & Co., Advocate for Appellants.
Mr Manoj Kumar, Advocate for Respondent nos.1 and 2.
Mr Ritesh Patadia (through video-conferencing), Advocate for auction purchaser.
The matter is taken up for hearing by way of a praecipe filed by the appellants for seeking urgent relief.
The appellants are in appeal impugning the order dated 19.01.2024 in I.A. No.95 of 2024 in S.A. No.10 of 2024 on the files of Debts Recovery Tribunal-II, Mumbai whereby the appellants were directed to deposit a total sum of 3.47 crores in instalments to clear off the entire debt by 31.03.2024. It was indicated that failure to pay the amount in instalments would entail the respondent bank proceeding with the Sarfaesi action of taking physical possession of the secured asset. The appellants were unable to pay the amount as directed by the D.R.T. and hence have approached this Tribunal in appeal.
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forthcoming regularly. It is stated that the appellants do not have any prima facie case and therefore, they may be directed to deposit 50% of the amount that is due. According to the respondent bank, the amount due after payment of ₹47 lakhs by the appellants would come to ₹3.75 crores and therefore, that should be taken as the threshold amount.
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within a gap of two weeks each. Subject to payment of ₹25 lakhs tomorrow by 5 p.m., the taking over of the possession on the 28th instant shall be deferred till the next date of hearing.
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.
Post on 09.07.2024 for reporting compliance regarding the payment.
Sd/Chairperson
Nidhi-08
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3 issues framed by the court
Whether the appellant is liable to make a pre-deposit under Section 18(1) of the SARFAESI Act to entertain an appeal.
Whether the amount of pre-deposit is ₹1 crore given the absence of a formal account statement from the respondent bank.
Whether the taking over of possession of the secured asset should be deferred pending compliance with the pre-deposit requirement.
3 provisions across 1 enactments
Gajalee Coastal Food Pvt. Ltd. & Ors.
Karnataka Bank Ltd. & Ors.
Ashok Menon
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
