Allowed

Mukesh Gupta v. Indian Bank

DRAT13 Feb 2024IA/93/2024

Case brief

AI extract

What is this about?

The Appellant challenged orders refusing protection against SARFAESI enactment measures and sought exemption from pre-deposit on grounds of bankruptcy. The Tribunal held that pre-deposit is a mandatory condition precedent. It directed the Appellant to deposit 50% of the due debt within six weeks to stay further proceedings against the secured property.

What did the court decide?

Directed Appellant to deposit 50% of the amount demanded in the Section 13(2) notice as pre-deposit within six weeks to obtain stay of proceedings.

Mukesh Gupta versus Indian 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. 93/2024(WoD)

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In Appeal on Diary No. 240/2024

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Between

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Mukesh Gupta … Appellant/s V/s.

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Indian Bank & Ors.

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…Respondent/s

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Ms. Neeta Pandit, i/b M/s. A.R. Gupta & Associates, Advocate for Appellant.

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-: Order dated: 13/02/2024:-

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

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The Appellant is in appeal impugning the order in Interlocutory Applications (I.A.) Nos. 3394/2023 and 3562/2023 in S.A. No. 320/2021 on the files of Debts Recovery Tribunal-II, Ahmedabad (D.R.T) dated 17.01.2024. The Ld. Presiding Officer refuse to grant any protection to the Appellant against the Respondent Bank from proceeding under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (“ the SARFAESI Act” for short) concerning the secured assets. Hence this appeal.

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The Appellant has raised several contentions concerning the challenge to the Sarfaesi measures. It is stated that the demand notice u/s. 13(2) does not give a breakup of the amount that is demanded. It is also stated that the order passed u/s. 14 of the SARFAESI Act is not sustainable because the Respondent bank did not file a nine-

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pointer affidavit, as required to be filed. The possession of the property is intended to be taken on 14.02.2024 and the Appellant therefore, prays that there may be a complete waiver of the predeposit, and if at all there is an amount to be deposited, the Respondent No. 2 may be directed to deposit that amount. It is pointed out that the Respondent had moved the Singapore High Court to declare the Appellant bankrupt and accordingly, the Appellant has been declared bankrupt and a receiver/trustee has been appointed for this property. Therefore, the receiver/trustee may be directed to pay the amount of pre-deposit.

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The Respondents have been served but none appeared. The Ld. Counsel appearing for the Appellant submits that the Appellant may be granted an order of protection pending deposit of the predeposit amount by the receiver. 5. The argument of the Ld. Counsel regarding complete exemption from pre-deposit cannot be entertained. Since, it is well settled that an appeal u/s. 18 of the SARFAESI Act cannot be entertained unless the Appellant pays 50% of the debt due and demanded by the Respondent bank. The amount demanded as per Sec. 13 (2) notice is $ 33,707,074.85. The Appellant has prayed that since the Appellant has been declared insolvent and bankrupt by the High Court of Singapore, it may be assumed that he is under financial strain and unable to deposit the amount.

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The Appellant cannot get an exemption from payment of the pre-deposit amount, because such deposit is a condition precedent for entertaining the appeal. It is also not now possible to direct

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Respondent No. 3 to deposit because it is not sure, and there are no documents that indicate that the property situated in Gujarat is under the possession of the trustee/receiver.

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No prima facie case is made out. Under the circumstances, for entertaining the appeal, the Appellant is directed to deposit 50% of the amount, which is demanded in 13(2) notice.

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The amount mentioned in the 13(2) notice is in U.S. dollars and the Appellant shall deposit the equivalent of Indian Rupees as per the present rate of exchange within six weeks i.e. on or before 26.03.2024. In default, the Appeal shall stand dismissed, without any further reference to this Tribunal.

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On deposit of the amount, there shall be a stay of the further proceedings with regard to the property. 10. The amount shall be deposited in the form of a Demand Draft 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 is at liberty to file a reply in the Appeal with an advance copy to the other side.

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Post on 27.03.2024 for reporting compliance concerning the payment and Await the appearance of Respondents.

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rm-9

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Mukesh Gupta v. Indian Bank

Case brief

What is this about?

What did the court decide?

Mukesh Gupta v. Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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