Partly allowed

Palak Bipin Shah v. the Zoroastrian Cooperative Bank Limited

DRAT9 May 2025IA/259/2025

Case brief

AI extract

What is this about?

The appellate tribunal partially allowed the waiver application. It held that directing a 25% pre-deposit of Rs. 1.00 Crores satisfies the statutory requirement. The order mandates payment in two instalments, deferring possession only upon timely deposit of the first instalment, otherwise rejecting the appeal.

What did the court decide?

Directed the appellant to deposit Rs. 50,00,000/- as the first instalment by 14.05.2025 to defer possession; failure to do so would result in the appeal being rejected.

Palak Bipin Shah versus the Zoroastrian… — Contract and Commercial Disputes | DRAT (2025)

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DEBT/REGOVERYAP^ELLATE^TRIBONAL-MUMBAr (SITTINb1 AT -CHENNAI)

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IX Nd. 259/2025 (WoD) In Misc.,Appeal.DyrNo. 650/2025

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. Dated: O9..p5..2O25‘

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this Appljcatibh is filed Seeking waiver of, pte-dcpo;sit required under Section 18 (1) of the SARpAESl Act,. 2pp2, Tor * entertaining this Appeal.

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Learned Counsel forPctitioner/Appellantsubinitted that SA 137/202'3 was filed challenging Section .14 Applicatibnvand Notice dated '30.06/2023 issued by Court Commissioner. Petitioiicr/Appellant filed an interim Application In lA.'.No. '6.73/2025 seeking stay'. Learned Presiding. Officer, after recording the payments' already rnadc, directed the; Petitioner/Appellant to deposit Rs.60 Lakhs to the Batik, on' “die date of passing order i.e. on 24.04.2025 for deferring,lhe‘ pp^sessiOn. Agaihst the’said .order, this Appeal is. filed; along with. Waiver.Application.

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Learned Counsel for. petitioner/Appellant .further isubmitted that though the bprrowal by .Rcspondeni. No.2 ;frprn Respondent No. 1 Bank, is Rs.15 prores, Demand: Notice dated 16x09.2021 was issued for recovery pf a. sum of Rs. 1!7,83,88,SOl-.'iSp,, under ;Se‘ction 13(2) of SARFAESl Ati. !. 2002'.. Tlie liability of lthis Petitioner/Appellant, who-ls the ^guafiul.tpr, is;,restficted to only Rs,3.28 Crores, aS per Letter of Guarantee dated 06.11.2017. He submitted that cash credit loan facility was granted tb Respondent Nq.2, on' ;O6:02.2616.

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There was no guarantee offered by the Petitioner/Appellant then. Only when cash credit limit was enhanced from Rs. 10 Crores to Rs.15 Crores, the Petitioner/Appellant offered his property as security. He is one of the four guarantors. There is a specific mention in the loan sanction letter that the Petitioner/Appellant’s liability is restricted to the value of the property offered as security interest. As per valuation report dated 05.07.2023, the value of the property is Rs.2,19,84,000/-. Thereafter, the Petitioner/ Appellant paid Rs.70 Lakhs towards loan due, therefore, he cannot be asked to make pre deposit, taking the loan due, demanded as per Section 13(2) Notice. Learned Counsel for Petitioner/Appellant further submits that the 18‘ Respondent Bank has scheduled the date for taking possession on 15.05.2025.

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Learned Counsel for ls‘ Respondent Bank opposed this Waiver Application on the ground that though the guarantee letter has restricted the liability to Rs.3.28 Crore, the security interest was created towards the entire loan amount borrowed. The guarantee letter also reads that the guarantee offered was for Rs.3.28 Crores with interest and costs. With interest, after giving credit to Rs.70 Lakhs •already paid, still, Petitioner/Appellant’s dues, comes to Rs.4,13,73,351/-. Absolutely, there is no reason given in the Waiver Application for waiving the pre deposit. No income tax return is filed for the Petitioner/Appellant to show that he is incapable of making pre deposit. The CIBIL Score shows his rating score as 843. He also owns the additional flat. Therefore, no complete waiver can be given.

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records. Learned Counsel for Petitioner/.Appellant refuted to this' contention with.fegard to owning of one more flat. The narration pf the facts above- shows that,: for- the loan Considered' .the rival submissions and perused the.
borrowed by Respondent No.S from Respondent -No.% the
Taking note. -6f the fact that .PeLtidnef/Appcllant’s liability is-restricted: to Rs.3.'28 Crores 'with fnt'eresty and that a sum. of Rs.70 Lakhs was already paid; this1 Tribunal fc of the .View, that directing Petitioner/Appellant lo make1 pre deposit of 25% of Rs.4 Crores, would meet the requirement under . -Section 18,(1) of SARAFAES1 Act, 200^) for cntertalhing. Ole Appeal. Petitioner/Appellant. stood as guarantor by nfferifig hi8. property as security interest for' the loan. -As? pet guarantee letter,, his liability :is .restricted to Rsr3.28 Crores;, i.e; the value qf the' property On.Which, the Security interest wasicreated. .It Is :alsp stated th&t -he had -already paid .RS.7Q Lakhs- towards jhe loan amourit. Of1 course,, ‘the. guarantee letter reads, that- the. Petitioner’s liability is restricted to Rs.3.28 Groffes with interest.. It is not known how .and oh what basis Learned Counsel for I61 Respondcnt.-Sank calculated the interest -to: fix .the .due as .Rs.4,13,73;351 /-as of now.
Admittedly, 25%. .of Rs.4,00,00,000/- .comes-, to Rs .1,00,0Qf000/-;

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Therefore, Petitioner/Appellant shall deposit

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Rs.1,00,00,000/, in two equal instalments; the first instalment of Rs.50,00,000/- to be deposited on or before 14.05.2025 and second instalment of Rs.50,00,000/- to be deposited on or before 11.06.2025.

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If the Petitioner/Appellant deposits the 1st instalment amount of Rs.50,00,000/- on or before 14.05.2025, taking possession shall be deferred till next hearing date. On failing to deposit the first instalment, on 14.05.2025, the 1st Respondent Bank is at liberty to proceed further, in accordance with law.

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It is made clear that failure to deposit of either of the instalments, the Appeal shall stand rejected. On making such deposit by Petitioner/Appellant, Registrar, DRAT, Mumbai, is to invest the same in a Nationalized Bank, from time to time, till further orders are passed.

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Post the case on 16.06.2025, for compliance of payment.

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CHAlRPERSol^1CHENNAI (IN-CKAROE. DRAT, MUMBAI)

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PAM

Palak Bipin Shah v. the Zoroastrian Cooperative Bank Limited

Case brief

What is this about?

What did the court decide?

Palak Bipin Shah v. the Zoroastrian Cooperative Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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