Disposed

Bhupesh Son of Bharatkumar Buddhadeo v. Union Bank of India

DRAT13 Feb 2025IA/103/2025

Case brief

AI extract

What is this about?

The Tribunal disposed of a miscellaneous appeal challenging SARFAESI actions. While noting a prima facie case reg. defective notices and collusive auction, the appellant failed to prove financial strain. The Tribunal directed payment of a sum of ₹25 lakhs as pre-deposit and deferred possession.

What did the court decide?

Appeal disposed of on direction to pay ₹25 lakhs as pre-deposit in instalments; taking of possession deferred.

Bhupesh Son of Bharatkumar Buddhadeo versus Union Bank of India — Banking and Recovery | DRAT (2025)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr. Justice Ashok Menon, Chairperson I.A. No. 103/2025(WoD)

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Misc. Appeal on Diary No. 37/2025 Between

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Bhupesh S/o Bharatkumar Buddhadeo … Appellant/s

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V/s.

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The Authorised Officer, Union Bank of India …Respondent/s Mr Rajesh K. Thakkar, Advocate for Appellant. Mr Anup Khaitan, Advocate for Respondent Bank.

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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 dismissal of Interlocutory Application (I.A.) No. 2298 of 2024 in Securitisation Application (S.A.) No. 282 of 2024 by the Debts Recovery Tribunal, Nagpur (DRT) vide order dated 03.01.2025 declining to grant any protection to the appellant against the Sarfaesi measures initiated by the respondent bank for recovery of the debt allegedly due from the appellant under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short).

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The appellant is the borrower who admits that the amounts are due and defaulted. In his challenge to the Sarfaesi action, the appellant has raised contentions regarding deficiency in the demand notice issued under Sec. 13(2) of the SARFAESI Act for the reason that the bifurcation of the principal and interest amounts are not shown in the

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demand notice as required under Sec. 13(3). The demand notice is produced for verification and indicates that the total amount a sum of ₹59,14,901/- demanded without giving a breakup of the principal amount and interest. Hence, prima facie, it appears to be defective. It is further contended that the symbolic possession under Sec. 13(4) of the SARFAESI Act was taken without publishing notice in two newspapers one of which should have been in the vernacular. The Ld. Counsel for the appellant further submits that the secured asset was subsequently sold in a collusive auction and hence, the auction sale is also challenged.

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The Ld. Counsel appearing for the respondent bank submits that none of the contentions raised in the S.A. are sustainable. The sale is valid, and the auction purchaser has deposited the initial 25% of the sale consideration and for the balance of 75% of the sale consideration, the auction purchaser was granted time till 28.02.2025. Therefore, there are no grounds for the appellant to successfully challenge the Sarfaesi measures.

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The impugned order does not delve into the allegations made in S.A. and has dismissed the application stating that the auction has already taken place and therefore, the challenge to the Sarfaesi action will not lie. The impugned order apparently, appears to be insufficient. 5. To entertain the appeal, the appellant will have to comply with the mandatory provisions under Sec. 18(1) of the SARFAESI Act by depositing 50% of the amount demanded. Since the sale has been conducted and the sale is also challenged by the appellant. The amount due together with interest should be the threshold amount of debt due

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for the calculation of the pre-deposit. According to the Ld. Counsel for the respondent bank, the outstanding due as of the date is ₹64,82,709/- and therefore, the said amount is taken as the threshold amount for calculation of the pre-deposit amount. The appellant has not produced any documents to indicate his financial strain though he has contended that his father is old and hospitalized and had incurred heavy expenditure for treatment of his father. The fact that the appellant has other expenses for the treatment. medical expenses involved is no reason to conclude that he is under financial strain. The income has to be independently proved. Though the appellant has a prima facie case concerning the challenge of the Sarfaesi action, he has not produced any document to indicate that he is under financial strain. He is, therefore, not entitled to get 25% of the pre-deposit amount waived exercising the jurisdiction under the third proviso to Sec. 18(1) of the SARFASESI Act.

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The appellant is, therefore, directed to deposit a sum of ₹25 lakhs as pre-deposit for entertaining this appeal. The possession of the subject property is scheduled to take place on the 15^th instant. The Ld. Counsel appearing for the appellant undertakes to pay a sum of ₹3 lakhs by way of RTGS by tomorrow i.e. 14.02.2025. The balance amount 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₹11 lakhs	27.02.2025
2^ndInstalment of₹11 lakhs	13.03.2025

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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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Subject to the payment of ₹3 lakhs by way of RTGS with intimation to the Ld. Counsel appearing for the respondent bank and the Registry, the possession intended to be taken on the 15^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 and intimated to the counsel for the respondents.

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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 Nationalized 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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For reporting compliance regarding the first instalment, call on 28.02.2025.

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Chairperson

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mks-04

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Bhupesh Son of Bharatkumar Buddhadeo v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Bhupesh Son of Bharatkumar Buddhadeo v. Union Bank of India

Case brief

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