M/s Primus Realtors Private Limited v. Union Bank of India

DRAT4 Apr 2025IA/209/2025

Case brief

AI extract

What is this about?

In an IA under Section 18 of the SARFAESI Act, the Debt Recovery Appellate Tribunal rejected the petitioners' request for waiver of the pre-deposit despite non-compliance by the auction purchaser with security interest rules, directing a deposit of Rs. 2.51 crores to entertain the appeal. Interim protection against further encumbrances was also granted.

What did the court decide?

Direction to deposit Rs. 2.51 crores in two installments to entitle the appeal; interim restraint on respondents from creating further encumbrances.

M/s Primus Realtors Private Limited versus Union Bank of… — Insolvency and Bankruptcy | DRAT (2025)

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DEBT RECOVERY APPELLATE TRIBUNAL - MUMBAI

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IA No.209/2025 (WOP)

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In Appeal Dv.No;491/2025

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Dated : 4.4.2025

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td, iCpuhsel for petitioher/appeliantis present. Ld.;Cduhsel for R1 Bahk.is presehtin VC.

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This application is filed .seeking waiver under Section 18 of the; SARFAESI Act for entertaining the Appeal.

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Cd. Counsel for the petitioner submitted that-SA 115/2018 was filed before DRT,.Nagpur challenging.the sale of the security interest. It- is his further1 submission that when the ’sale happened. Auction Purchaser has not complied with the mandatory requirement of deposit ,of 25% of,sale consideration amount on'the date of-sale or by next working day, which is;a ’ violation'of Rule 9(3) of Security Interest (Enforcement) Rules,, 2002. this .was, recorded ;ih the proceedings of Ld., Presiding Officer, DRT, Nagpur on 2.8.2021. When the'matter-was heard,• LU- Counsel for. respondent bank prayed that bank .may be allowed to withdraw the action under. Sale Notice- dated 18.5.2018 with a liberty to initiate fresh sale exercise; In reply filed by the'respondent bank, it was very candidly admitted that Rule 9.(3) .of -SIE Rules was not complied with by the .auction purchaser; However, Auction Purchaser paid the entire sale consideration amount on 23.12.2019. Ultimately, first 'respondent bank prayed the Tribunal to;pass appropriate order that bank may be permitted to cancel the sale and forfeit Rs.39.00 lakhs EMD made by the auction purchaser. It is also .submitted, that OTS submitted by the; borrower Is pending for the outcome of Court decisidn; ;

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Despite all these developments, Ld. Presiding Officer at the time of passing final order misinterpreted the proceedings and allowed the SA on the mere ground that vacation of stay order passed by the Tribunal on 26.6.2018 by its order dated 17.12.2018 was not challenged. This is against the factual legal position. In the said circumstances, this appeal is filed along with waiver application.

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Id. Counsel further submitted that petitioner suffered loss and is hot in a position to pay pre-deposit and prayed for waiver of pre-deposit.

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Ld. Counsel for first respondent bank submitted that sale certificate was issued and registered and possession has already been taken and thuS proceedings under SARFAESI Act were already completed.

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Having heard the rival submissions of Ld. Counsel appearing for the parties and taking into consideration the blatant violation on non compliance of Rule 9(3) of SIE Rules, this Tribunal is of the view that directing the petitioner to deposit 25% of amount mentioned in the sale notice i.e., Rs.10,04,55,175/- would meet the requirement under Section 18 of the SARFAESI Act> for entertaining the appeal.

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Accordingly, petitioner is directed to deposit 25% of Rs.10,04,55,175/-, which comes to Rs.2,51,13,793.80p, rounded off to Rs.2,51,13,794/- in two equal instalments, within six weeks from today i.e. first instalment of Rs.1,25,56,897/- within three weeks from today i.e. on or before 25.4.2025 and the second instalment of Rs.1,25,56,897/- within three weeks thereafter i.e., on or before 16.5.2025, failing which, the appeal

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would stand rejected.

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At this juncture, Ld.,Counsel 'for petitioner submitted that that jietitionef is ready to deposit a Demand Draft for a sum of .Rs?L06 crore in the Registry today as part of the first instalment and balance as per the schedule ordered by this. Tribunal. Registry is.directed to receive the^same.

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In case pre-deposit is made within the stipulated period as mentioned above Registry is directed to number the Appeal if it . is -otherwise in order and Registrar shall invest the sa'm'£ irt a Nationalized Bank for a reasonable period and renew it periodically, tlll.fufther orders are passed. Post-’the matter on 20.-5.2025fqr further proceedings,. Ld. Counsel further Submitted that petitioner•apprehends that auction purchaser 'may create further interest over the property and sought for interim protection. As the apprehension of the petitioner cannot.be brushed aside^J^^7 respondents; are restrained from creating any further Encumbrance oyef the property till next datetoT hearing. CHAIRPERSOf^M^r^CHENNAI (IN-CHARGE, DRAT, MUMBAI) SN

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M/s Primus Realtors Private Limited v. Union Bank of India

Case brief

What is this about?

What did the court decide?

M/s Primus Realtors Private Limited v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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