Partly allowed

Ms Unity Hospitals And Ors. v. Axis Bank Limited

DRAT9 May 2025IA/277/2025

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal, Chennai Bench, considered an application seeking waiver of the statutory pre-deposit under the SARFAESI Act. The Court directed payment of 40% of the claimed amount in two installments, deferring possession if the first installment is paid. Failure to comply results in rejection of the appeal.

What did the court decide?

Directed Petitioners/Appellants to deposit Rs. 2,76,39,356/- in two equal installments. If the first installment is paid, possession shall be deferred. If not, the Appeal shall stand rejected.

Ms Unity Hospitals And Ors. versus Axis Bank Limited — Banking and Recovery | DRAT (2025)

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’ - DEBT RECOVERY APPELLATE TRIBUNAMUMBAl (SITTING AT -CHENNAI) I.A. No. 277-/2025. (WoD) In Misc..Appeal .Dy No. 700/2025

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Dated: -09.05.2025

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' -The matter is taken up for hearing by way of. a Praecipe I r

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Tiled by the Petitioners/Appellants-for seeking urgeritrelief.This Application, is 'filed-.seeking waiver of ^statutory’.deposit required under Sfcctidn 18‘ (1)L of the= -SARFAESl, 2002, for ’entertaining the Appeal

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It is the ^submission of Learned Counsel for Petitioners/Appellants that the Petitioners/Appellahts Jjlied S.A. No,. 639/2024 challenging the-declaration of the account. •aSi: NPA ph 1-9.07.2024 without jurisdiction, illegal against the RBr guidelines; arid set aside the. Notice, dated'. 20.09..20.24 issued, under Section 13(2) of SARFAESI Act, .2002,, and .all « subsequent steps'taken by the Respondent Bank, such as; issuance: of Possession Notice dated 28.11.2024 and, further measures.

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When this Application was- pending; possession .xvas sought to be takemin view;of.order passed under Section. 14. of the .SARFAESJ Apt, 2002. Appropriate amendment. was.?made. Qn -a proceedings, initiated, by Respondent Bank, and on the Petitioners/Appellants -undertaking to pay. a sum Of Rs.L.20 Crore in a time-bound: manner- for deferring; possession scheduled on '27.04.2025, -Learned .Presiding Officer passed. bYddr ion 13.02.2025 directing- the Petitioners/Appellants to:

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deposit Rs.30 Lakhs on or before 16.02.2025, Rs. 40 Lakhs on or before 26.02.2025, and Rs.50 Lakhs on or before 04.03.2025. Further the Pctitioners/Appellants were directed to submit the OTS proposal with the Bank on 04.03.2025 and the Bank was directed to consider the OTS proposal. It was also made clear in the said order that, in case, any single default, on the part of the Petitioners/Appellants in paying the amount, the Respondent Bank was given liberty to proceed further in accordance with law.

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When the matter was taken up again on 07.03.2025, Learned Counsel for Respondent Bank appeared and informed about the non-compliance of the order of Learned Presiding Officer dated 13.02.2025, and on that basis, the Bank was directed to take seven days’ notice before proceeding to take physical possession. Thereafter, the Petitioners/Appellants insisted Learned Presiding Officer to hear the S.A., on merits as the Respondent Bank has scheduled to take possession of the secured asset on 27.04.2025. Learned Presiding Officer, after noting that the outstanding loan of Rs.7.30 Crore and odd, and earlier orders passed by Learned Presiding Officer on 13.02.2025 were not complied with by Petitioners/Appellants, and there was huge pendency of cases, and also of the fact that, on 24.04.2024 itself, there were 151 cases listed for hearing, held that S.A. 639/2024 cannot be heard.

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Petitioners/Appellants filed LA. No. 1150/2025 for granting interim relief in the main S.A. The said Application was, without allowing or dismissing, disposed of, by Learned Presiding Officer stating that, S.A. was posted for hearing on 16.06.2025 and Petitioners/Appellants have not complied with

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■ KV.

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th.e. conditional order that,was passed-reaflierj and the Interim 1 relief Application is devoid of merit .and,rejected, therefore; this , Appeal is,-filed along with the Waiver Application. The Learned ■ .Counsel .'Retitioners/Appellants submitted that the possession. . ^S’SCheduled tomorrow, Le., 10;,05.2025. The Learned Counsel.for Respondent. Batik opposed ‘this: ■ Application on theaground.that the LA; No. 1450/2025 Was hot. ; Tiled’for scckihg'ih.terim.:reiierbut for modification of-the orders: 'dated 07:03.2025 and 24.04.2'025; .Learned. Counsel for ; ,Respdhderit Bank, submitted that as the order- passed on . 13.02.2025 is1 ah order' passed in a Pursis moved by .the: ,, Petitidners/Appenahts, and ,oh, their consent,, given 'for making; ; payments of Rs. 1.20 Grore, in three instalments; When ail order is passed on. consent, challenging order passed cannot be appreciated. Petitioners/Appellants offered OTS- which .is? .less' than. 50°/d of the dues, and therefore, the OTS. proposal was .not accepted by the Bank., There, is no. acceptable .reason ; ..given for waiver .of pre-deppsitv The amount due as of .now is Rs. .9 Crores and .'odd; Heard the riyal submissions and perused’ the records. It is -seen from, the record and the Securitisation Application that the amount demanded in Demand Notice and Possession Notice, was Rs.6,90,98,39.0. l-Sp. It is submitted by -Learned .Counsel for Respondent Bank that'the amount,-due-as; .of now.,- is Rs. 9 Crores and odd. The- Order dated 13.02.2025 was passed, on the ‘basis of Pursis moved by’ the .Pelitionefs/Appenants to pay Rs. 1.-20 Crore, in three .'instaiments, for deferring the possession scheduled- on

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16.02.2025. The order specially mentions that in the event of a single default on the part of the Petitioners/Appellants in paying the amount, the Respondent Bank was given liberty to proceed further in accordance with law. Only on undertaking to pay Rs. 1.20 Crores, the possession scheduled on 16.02.2025 was directed to be deferred. Admittedly, Petitioners/Appellants paid Rs.30 Lakhs and did not pay the remaining two instalmentes. Therefore, without complying with the condition, they prayed for an early hearing of S.A., and hence, Learned Presiding Officer rightly rejected the early hearing of S.A., for the reason that there were so many cases pending, and on that particular date, at least 151 cases were listed for hearing. IA 1150/2025 was filed for modification of order dated 07.03.2025 and 24.04.2024. Taking note of the fact that the Petitioners/Appellants have not complied with the consent order passed on 13.02.2025 and the S.A. was scheduled for final hearing on 16.06.2025, Learned Presiding Officer found that I.A. 1150/2025 was devoid of merit and rejected.

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Before considering the order impugned in the Appeal on merits, the Petitioners/Appellants have to comply with the pre deposit for entertaining the Appeal. As per the, Demand Notice dated 20.09.2024, the amount demanded is Rs.6,90,98,390.15p (rounded off to Rs. Rs. 6,90,98,390/-).

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In the said circumstances, this Tribunal is of the view that directing the Petitioners/Appellants to deposit 40% of Rs. 6,90,98,390/- would meet the requirement under Section 18 (1) of SARFAESI Act, 2002, for entertaining the Appeal.

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Admittedly,- 40% of ,Rs.6,9.0,98,390/comes •to ;Rs;2,76,39,356/-. Thus; thei Petitioners/Appellahts are directed to- deposit 4 .Rs.2,76,39,356/^, iri twO'equarihstalmehtsi.'The pf instalment, of RS. 1,38,19,67.8/- shall be paid .oh-nf before: 1,1.<00 A-M. tomorrow, i.e;, idip5.2025j and the ^^instaiment of Rs;l;,'3849i678/-;shairbe paid on or'before-'09.06.-2025. jf Petitipners/Appeiiants-comply with>.the 1* instalment by depositing -Rs. 1.,■38,.1-9,678/.- before 11 AM tomorrow, i.e., J; 40;05i20'25, taking possession-Shallbe. deferred till, the next date:ofhearing. If the Petitioners/Appellants failed to .comply ■with- Is’ instalment,, the Respondent Bank. J’s. iat liberty, to : pfpCeed/urther in accordance with law; it is rhade Clear that failure to deposit of either of theinstalments, the Appeal shall stand rejected-. On making .such-. ' deposit by-Pctitioners/Appellants, Registrar, BRAT, Mumbai?is. to. invest the same in a Nationalized Bank, from time''td time, . till further orders are .'passed. J4st the case'on 1^.06r2025j lor reporting compliance^ chai'rper^n^dr^t,:chennai (IN-CHAROErDRAT, PAM' V

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Ms Unity Hospitals And Ors. v. Axis Bank Limited

Case brief

What is this about?

What did the court decide?

Ms Unity Hospitals And Ors. v. Axis Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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