Allowed

Ms Universal Tradlink Corporation through Its Prop Mr Manoj Paliwal v. Canara Bank

DRAT28 Jan 2025IA/799/2024

Case brief

AI extract

What is this about?

The appellate tribunal allowed an interlocutory application requiring the appellants to deposit ₹70 lakhs as a pre-deposit to entertain their appeal against dismissed IA in a SARFAESI case. The court restrained the respondent bank from taking possession of the property pending hearing subject to partial payment.

What did the court decide?

The respondent is restrained from taking possession of the subject property pending payment of the initial ₹10 lakhs and compliance with the remaining pre-deposit schedule, subject to default leading

Ms Universal Tradlink Corporation through Its Prop Mr Manoj… — Banking and Recovery | DRAT (2025)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr. Justice Ashok Menon, Chairperson

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I.A. No. 799/2024 (WoD) In

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Misc. Appeal on Diary No. 2275/2024

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Between

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Universal Tradlink Corporation through its Prop. … Appellant/s Mr. Manoj Paliwal & Ors.

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V/s.

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Canara Bank & Anr. …Respondent/s

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An Advocate for the Appellants appeared through a Video Conference.

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An Advocate for the Respondents is present.

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-: Order dated: 28/01/2025:-

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The matter is taken up for hearing by way of a praecipe filed by the appellants for seeking urgent relief.

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The appellants are in appeal impugning the dismissal of the Interlocutory Application No. 1642/2024 (I.A.) vide order dated 25.09.2024 in Securitisation Application No. 265/2024 (S.A.) on the files of the Debt Recovery Tribunal, Nagpur (D.R.T.).

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The respondent had issued an E-Auction Sale notice and the appellants had filed the aforesaid I.A. for an interlocutory order to preclude the respondent from proceeding with the sale or taking over possession of the subject property. After mentioning the rival contentions, the Ld. Presiding Officer by a cryptic order stated that there was no sufficient reason for allowing the application and

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accordingly the application was dismissed and as a result, the auction sale concluded. However the auction purchaser subsequently did not deposit the entire sale consideration and as a result, the respondent has cancelled the sale. Therefore, at present no sale has taken place and the respondent seems to have issued a separate notice without mentioning the date on which the possession is intended to be taken. Hence, the appellants are in appeal.

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The appellants will first have to comply with the mandatory requisite of making a pre-deposit for entertaining this appeal u/s 18 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002 (“SARFAESI Act” for short). The amount claimed in the demand notice u/s 13 (2) is ₹1,99,51,126/-. But after that, the appellants paid a total sum of ₹26 lakhs (₹9.10 lakhs and ₹16.90 respectively on two dates) which has been appropriated towards the debt due. The amount that was mentioned as due on the date of the auction was ₹2.16 crores, and after giving credit to the payment made, the due as of today would be approximately ₹1.90 Crore.

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It is also contended that the classification of the debt as NonPerforming Assets (NPA) is not proper because there was no default of 90 days of the debt incurred by the 1^st appellant. The classification of this debt is based on the classification of another debt availed by the 2^nd appellant guarantor which was defaulted. He is only a guarantor in this particular transaction, and therefore, the classification of the debt incurred by the guarantor as NPA will not automatically classify the debt taken by the principal borrower in the instant case as NPA.

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There is an arguable case for the appellants on this ground which will have to be examined in detail by the D.R.T. The sale has now been set aside and therefore, the threat of the sale is not there. However, the D.R.T. did not enter any finding regarding the prayer concerning the taking over the possession of the subject property. There were no discussions on the merits of the case in the impugned order.

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Therefore, I find that the appellants have an arguable case. The income tax returns of the appellants have not been produced to indicate their financial strain. Hence, they are directed to deposit a sum of ₹70 lakhs as per deposit for entertaining this appeal. The Ld. Counsel appearing for the appellants undertakes to deposit a sum of ₹10 lakhs by tomorrow (29.01.2025) and a balance sum of ₹60 lakhs shall be deposited in two equal instalments a sum of ₹30 lakhs each within the gap of two and three weeks respectively as stated hereunder.

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Numbers of Instalments	Payment on or before
1^stInstalment₹30 lakhs	11.02.2025
2^ndInstalment₹30 lakhs	04.03.2025

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Subject to payment of a sum of ₹10 lakhs by tomorrow, the respondent shall restrain itself from taking physical possession of the subject property till the next date of hearing.

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In default in payment of any instalment on time shall entail the dismissal of the appeal without any further reference to this Tribunal. 7. 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 Nationalised 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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List the matter on 30.01.2025 for reporting compliance regarding the payment of pre-deposit.

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Sd/Chairperson

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psa-08

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Ms Universal Tradlink Corporation through Its Prop Mr Manoj Paliwal v. Canara Bank

Case brief

What is this about?

What did the court decide?

Ms Universal Tradlink Corporation through Its Prop Mr Manoj Paliwal v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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