Partly allowed

Mr Rajneesh Jinaaapa Awale v. Icici Bank Limited

DRAT19 Dec 2024IA/887/2024

Case brief

AI extract

What is this about?

DRAT Mumbai disposed of a pre-deposit application challenging SARFAESI measures. The Chairperson declined to decide on the validity of a demand notice issued by an advocate versus an authorized officer, finding an arguable case. The appellant was directed to deposit Rs. 13 lakhs in installments, and possession enforcement was deferred pending payment compliance.

What did the court decide?

The suit property possession was deferred until the next hearing subject to payment of the stipulated pre-deposit.

Mr Rajneesh Jinaaapa Awale versus Icici Bank Limited — 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. 887/2024 (WoD) In

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Misc. Appeal on Diary No. 2678/2024

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Between

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Rajneesh Jinaapa Awale … Appellant/s V/s.

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ICICI Bank Ltd. …Respondent/s

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Mr Puneet Gogad, Advocate for Appellant. Mr R.L. Motwani, Advocate for Respondent.

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

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The appellant is in appeal impugning the order dated 11.10.2024 dismissing I.A. No. 2569/2024 in Securitisation Application on Diary No. 2159/2024 (S.A.) on the files of Debts Recovery Tribunal, Pune (DRT) refusing to grant any protection to the appellant about the Sarfaesi measures initiated by the respondent under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short) for recovery of the debt allegedly due from the appellant.

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The appellant admits the transaction but challenges the correctness of the amount claimed. According to him, the entire debt has been repaid, and there is no amount payable. There is a challenge to the account statement maintained by the respondent bank. It is

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further contended that the demand notice u/s 13(2) of the SARFAESI Act dated 06.12.2018 was issued by an advocate under instructions of the bank, which according to the Ld. Counsel appearing for the appellant is not permissible, because the demand notice is to be issued by the authorized officer himself as per the statutory provisions. The symbolic possession was taken on 14.05.2019 u/s 13(4) and thereafter, an order was also obtained u/s 14 of the SARFAESI Act from the Chief Metropolitan Magistrate, Satara on 21.10.2023 for taking physical possession of the subject property.

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On receiving a notice from the commissioner informing the appellant about taking possession, he approached the DRT with this S.A. and an interlocutory application to protect him. The main challenge which was raised at this interlocutory stage was regarding the validity of the notice u/s 13(2) not being issued by the authorized officer himself. There are contradictory judgments of different High Courts on this point. The Andhra Pradesh High Court and the Madhya Pradesh High Court have found in favour of the appellant’s contention that the demand notice u/s 13(2) has to be issued by the authorized officer himself and cannot be delegated to an advocate. The views held by the Calcutta High Court (Single Bench) as well as the Karnataka High Court are however to the contrary. The Hon’ble Kerala High Court (Single Bench) has also followed the decisions of the Andhra Pradesh High Court and has disagreed with the findings of the Hon’ble Calcutta High Court (Single Bench) and found that there is no delegation possible for issuance of the notice u/s 13(2). If a demand notice u/s 13(2) is found faulty, the entire Sarfaesi measures

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will have to fail based on the principle of the Latin maxim sublato fundamento cadit opus .

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The Ld. Presiding Officer, DRT has not delved into the details and has not entered into a finding as to whether the demand notice is prima facie good. Based on other considerations, it was found that the appellant is not entitled to an injunction. The appellant also specifically denies the contention of the respondent bank that the debt was rescheduled/restructured. He has also sent an e-mail in 2024 stating that there is no restructuring of the debt and the EMI cannot be unilaterally enhanced by the bank. The Ld. Presiding Officer has however observed that the appellant had admitted the the re-scheduling of the loan which is a factual error. Hence, it is urged that the appeal may be entertained finding a good prima facie case in favour of the appellant and he be granted a waiver of 25% of the debt due as pre-deposit for entertaining this appeal.

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Per contra, the Ld. Counsel appearing for the respondent bank vehemently opposes the applcation and relies upon the decision of the Delhi High Court and the decision of the Calcutta High Court to argue that there is no infirmity in a demand being issued by an advocate under instructions of the bank. He has also pointed out the finding of this Tribunal in Appeal No. 207/2014 wherein the decision of the Delhi Court is followed to hold that an Advocate can issue the demand notice u/s 13(2) on instructions of the bank.

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Since there are contradictory decisions of the various High Courts, I am not at this stage inclined to enter into a finding regarding the validity of the demand notice u/s 13(2). It is also to be found whether

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there was a restructuring of the debt as is alleged by the respondent bank for which there should be sufficient evidence. It would suffice to say that the appellant has an arguable case which will have to be dealt with by the DRT while considering the S.A.

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The appellant has not produced any documents to prove his impecuniosity by producing the Income Tax Returns and therefore, it also cannot be found that he is under financial strain. The demand notice demands a sum of ₹ 44,03,137/-. The appellant is not entitled to get 25% of the debt waived but he is entitled to some concession since he has got an arguable case. Hence, the appellant is directed to deposit a sum of ₹ 13 lakhs as a pre-deposit for entertaining this appeal. The Ld. Counsel appearing for the appellant undertakes to pay a sum of ₹ 5 lakhs by 23.12.2024. The balance ₹ 8 lakhs shall be paid in two equal instalments within a gap of two weeks each as stated hereunder.

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Numbers of Instalments	Payment on or before
1^stInstalment of₹ 4,00,000	06.01.2025
2^ndInstalment of₹ 4,00,000	20.01.2025

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Subject to the payment of ₹ 5 lakhs on 23.12.2024 as agreed, the possession shall stand deferred till the next date of hearing.

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It is made clear that in case of any 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

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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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Post on 07.01.2025 for reporting compliance of 1^st instalment of payment of pre-deposit.

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Sd/Chairperson

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nrp- 06

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Mr Rajneesh Jinaaapa Awale v. Icici Bank Limited

Case brief

What is this about?

What did the court decide?

Mr Rajneesh Jinaaapa Awale v. Icici Bank Limited

Case brief

What is this about?

What did the court decide?

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