Disposed

rudrax creation and Ors. v. Hdfc Bank

DRAT5 Jun 2024IA/733/2023

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal addressed an interim application by appellants seeking to entertain appeals against DRAT-II Ahmedabad's dismissal of earlier appeals as withdrawn. The court directed the appellants to make a mandatory pre-deposit of ₹75 lakhs to entertain the appeals, subjecting the further SARFAESI action on the property to this compliance.

What did the court decide?

Directed appellants to deposit ₹75 lakhs as pre-deposit; SARFAESI action deferred subject to compliance; failure to comply attracts dismissal of appeals.

rudrax creation and Ors. versus Hdfc Bank — 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. 733/2023 (WoD)

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Appeal on Diary No. 1939/2023

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Between

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M/s Rudrax Creation & Ors.

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… Appellant/s

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V/s.

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The Authorised Officer, HDFC Bank Ltd.

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…Respondent/s

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And

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I.A. No. 734/2023 (WoD) In

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Appeal on Diary No. 1942/2023

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Between

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M/s Rudrax Creation & Ors. … Appellant/s V/s.

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The Authorised Officer, HDFC Bank Ltd. …Respondent/s Mr Gaurang Kinkhabwala, i/b Ms. Kanjani Trivedi , Advocate for Appellants.

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Mrs Uma Faida, Advocate for Respondent Bank.

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-: Order dated: 05/06/2024:-

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

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The appellants are in appeal impugning two orders of the Debts Recovery Tribunal–II, Ahmedabad (D.R.T) dated 17.10.2023 dismissing the S.A. at Diary No. 1730/2022, 1731/2022. Based on the pursis which was filed by the Ld. Counsel for the appellants stating that given the decision of the Madras High Court, the delay in filing the S.A. could not be condoned and that the SLP filed before the Hon’ble Supreme Court was also dismissed on the admission stage.

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The Ld. Counsel appearing for the appellants submits that S.As were dismissed erroneously for the reason that the pursis filed by the Ld. Counsel by the appellants does not indicate that the appeal is being withdrawn but it is only stated that given the Madras High Court judgment appropriate order to be passed by the D.R.T. However, in the impugned order passed in these two S.As. The Ld. Presiding Officer has recorded that there was a prayer for withdrawal of the S.As and consequently the S.As were disposed of as withdrawn.

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To entertain this appeal, the appellants will first have to comply with the mandatory provision of making a pre-deposit as contemplated under Sec. 18(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (“ the SARFAESI Act” for short).

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The Ld. Counsel appearing for the respondent bank submits that the appeal is not maintainable for a reason that the S.As were dismissed as withdrawn and that because the S.As were dismissed as withdrawn and not on merits, the appeal cannot be entertained. 5. The Ld. Counsel appearing for the appellants would contend that there are decisions of the Hon’ble Bombay High Court as also the decision of the Hon’ble High Court of Gujarat wherein it has been held that S.A. can be entertained after condoning the delay u/s. 5 of the Limitation Act. The impugned order would, therefore, go against those settled positions of the Hon’ble Gujarat High Court and the Hon’ble Bombay High Court.

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Under circumstances it is pointed out that the appellants have a good prima facie case. The appellants have produced documents to

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indicate that they are under financial strain and income tax returns have been submitted to indicate those facts.

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The two appeals arose out of two loan facilities granted to the appellants which were defaulted, as a result of which the accounts were classified as Non-Performing Assets (NPA) and two demand notices were issued u/s. 13(2) of the SARFAESI Act. The 1^st demand notice was issued in Appeal at Diary No.1939/2023 on 07.09.2021 demanding a sum of ₹ 1,44,31,554.92/- and the 2^nd demand notice was issued on 14.12.2021 in Appeal at Diary No. 1942/2023 demanding a sum of ₹ 27,79,710/-. The appellants did not respond favourably to the demand made as a consequence of which steps under 13(4) were initiated and the sale notice was issued on 07.09.2021 for both the loans together and therefore, the appellants apprehend that the property would be put up for sale.

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The appellants will first have to comply with the mandatory provision by making a pre-deposit. The amount mentioned in the sale notice is the same as mentioned in the demand notice but since it’s a common notice issue for the sale of the same property for two financial transactions the amount payable would be for both the loans together and the total amount would come to approximately ₹ 1.74 crores. The appellants appear to have an arguable case and the maintainability of the appeal also will have to be considered after the appeal is entertained for hearing.

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The appellants are therefore directed to deposit a sum of ₹ 75 lakhs as pre-deposit for entertaining these appeals. The Ld. Counsel appearing for the appellants undertakes to deposit a sum of ₹ 20

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lakhs by way of RTGS tomorrow i.e. on 06.06.2024 before 5.00 pm, and the balance of ₹ 55 lakhs shall be deposited within a gap of three weeks i.e. on or before 26.06.2024.

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Subject to payment of ₹ 20 lakhs as undertaken by the Ld. Counsel appearing for the respondent by tomorrow within the stipulated time, the further Sarfaesi action shall stand deferred till the next date of hearing. In default of instalment/deposit shall entail in dismissal of the appeal without any further reference to this Tribunal. 11. 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 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 27.06.2024 for reporting compliance concerning the payment.

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Sd/Chairperson

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rm-7-8

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rudrax creation and Ors. v. Hdfc Bank

Case brief

What is this about?

What did the court decide?

rudrax creation and Ors. v. Hdfc Bank

Case brief

What is this about?

What did the court decide?

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