Partly allowed

Chatur M Mathukiya and Ors. v. LIC Housing Finance Ltd.

DRAT24 Sept 2025IA/598/2025

Case brief

AI extract

What is this about?

The Tribunal calculated the pre-deposit for an appeal regarding recovery proceedings. It held that the deposit must be based on the current outstanding debt including interest, not just the initial demand notice. The appellants were ordered to deposit 25% of the dues, with partial payment to stay possession of the secured asset.

What did the court decide?

Appellants directed to deposit 25% of outstanding dues (Rs. 1,24,27,383/-) in two installments. Possession of asset stayed pending first installment.

Chatur M Mathukiya and Ors. versus LIC Housing Finance Ltd. — Banking and Recovery | DRAT (2025)

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DEBTS RECOVERY APPELLATE TRIBUNAL-MUMBAI

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IA 598/2025 (WOD) In Misc. Appeal Dy.No.1539/2025

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Dated: 24.9.2025

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Ld. Counsel for both sides are present in VC.

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waiver of pre-deposit under Section 18 of the SARFAESI Act for This application is filed in Misc. Appeal Dy.No.1539/2025 seeking entertaining the appeal.

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measures taken under SARFAESI Act starting from classification of loan pending, petitioners moved the Ld. Presiding Officer for interim protection from taking physical possession scheduled on 21.9.2025. the SARFAESI Act on 30.6.2025 and the notice issued by the Court notice and the order of Ld. ACJM, Kathor passed under Section 14 of account as a NPA, issuance of demand notice, symbolic possession Commissioner for taking physical possession. When the said SA was Ld. Presiding Officer rejected the contention of the Ld. Counsel for the Ld. Counsel for the petitioners/appellants submitted that petitioners petitioners raised with regard to the infirmity in the procedures filed SA No.36/2024 on the file of DRT-II, Ahmedabad, challenging the discrepancies as well. However, none of them was considered and the followed in filing the application under Section 14 of the SARFAESI Act, especially failure to refer about the reply to the objections submitted by the petitioners for the notice under Section 13(2). There are other interim application was dismissed. Therefore, this appeal is filed along with waiver application.

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serious flaw in the said affidavit and the Ld. Presiding Officer without Ld. Counsel further submitted that to the demand notice dated representation in reply of demand notice was not received. It is a replied by the respondent on 24.1.2022. However, in the affidavit filed 6.12.2021, petitioners filed their objections on 3.1.2022 and that was respondent is not mentioned rather it was stated that objections or in support of Section 14 application, the fact of sending reply by the

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considering the fact that the affidavit should contain true and correct particulars brushing aside the application. In the demand notice it is stated that the date of classification of the account as NPA as 10.10.2019. However, in the reply filed by the respondent to the SARFAESI application, the date of classification of the account as NPA was shown as 10.1.2020. Similarly, in the possession notice, it was claimed that symbolic possession was taken on 2.11.2023, but, in the reply it was claimed that possession was taken on 10.3.2025. Date of sale deed was mentioned as 3.2.2025 instead of 3.2.2015. There are several precedents of Hon'ble High Court of Mumbai in this regard that unless procedures for filing application under Section 14 are properly followed supported by an affidavit, order of the Ld. Presiding Officer based on the order of the Ld. Magistrate is liable to be set aside. Under the circumstances, it is prayed that petitioners are entitled for waiver of pre-deposit.

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Ld. Counsel for respondent bank submitted that possession scheduled on 21.9.2025 could not be taken for want of police aid. Now it is scheduled on 26.9.2025. The amount claimed in the demand notice dated 6.12.2021 was Rs.2,88,83,936.37p and subsequent interest has to be added for considering the waiver application. She further submitted that the amount due as on date is Rs.4,97,09,531/- and complete waiver of pre-deposit cannot be entertained.

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In reply, Ld. Counsel forthe petitioners submitted that the amount due as on date cannot be taken for considering the pre-deposit and only the amount demanded in the Section 13(2) notice has to be considered.

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I have considered the rival contentions and perused the records. On enquiry, Ld. Counsel for the petitioners fairly conceded that no repayment was made after the issuance of demand notice, which was issued on 6.12.2021 claiming a sum of Rs.2,88,83,936.37p. We are now in the year 2025, 4 years after the issuance of demand notice. Debt due is inclusive of subsequent interest as per the dictum laid down by the Hon'ble Supreme Court of India in re Sidha Neelkanth Paper Industries Pvt. Ltd. and another Vs. Prudent ARC Limited and others. L sumissin ments of the apbeal will be lendct on mamap

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Under the circumstances, this Tribunal is of the view that directing the petitioners to deposit 25% of Rs.4,97,09,531/- towards pre-deposit would meet the requirement of Section 18 of the SARFAESI Act, for entertaining this appeal..

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Accordingly, petitioners are directed to deposit 25% of Rs.4,97,09,531/- which comes to Rs.1,24,27,382.80p, rounded off to Rs.1,24,27,383/-, of which, Rs.50.00 lakhs shall be paid on or before 25.9.2025 and the balance amount of Rs.74,27,383/- within four weeks thereafter i.e., on or before 23.10.2025, failing which this appeal would stand rejected.

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In the event of the petitioners depositing a sum of Rs.50.00 lakhs on or before 25.9.2025, taking possession of secured asset scheduled on 26.9.2025 is stayed till the next date of hearing. In the event of failure on the part of the petitioners to deposit Rs.50.00 lakhs as indicated above, respondent is at liberty to proceed further in the manner as known to law.

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The pre-deposit should be made in the form of Demand Draft drawn in favour of the Registrar, DRAT, Mumbai payable at Mumbai. In case pre-deposit is made within the stipulated period as mentioned above, Registry, DRAT, Mumbai is directed to number the Appeal, if it is otherwise in order and Registrar, DRAT, Mumbai shall invest the same in a Nationalized Bank for a reasonable period and renew it periodically, till further orders are passed.

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Post the matter on 27.10.2025 for further proceedings.

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amm CHAIRPERSON, DRAT, CHENNAI (IN-CHARGE, DRAT, MUMBAI)

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Chatur M Mathukiya and Ors. v. LIC Housing Finance Ltd.

Case brief

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Chatur M Mathukiya and Ors. v. LIC Housing Finance Ltd.

Case brief

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