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Newton Engineering And Chemicals Ltd. & Others v/s Bank Of Baroda & Others

    I.A. No. 45 of 2021 in Appeal No. 7 of 2021

    Decided On, 30 July 2021

    At, Debts Recovery Appellate Tribunal At Mumbai

    By, THE HONOURABLE MR. JUSTICE S. RAVI KUMAR
    By, CHAIRPERSON

    For the Applicants: Pallav Sisodia, Sr. Advocate, Rajiv Kumar, Advocate. For the Respondent: R1, Rathina Maravarman, R2, Rishabh Shah, Gaurav Nanavati, Advocates.



Judgment Text

1. Heard Advocates for parties through Video Conference.

2. Heard both sides.

3. This application is filed seeking waiver of the statutory deposit under Section 18 of the SARFAESI Act.

4. Advocate for applicants submitted as per notice dated 30.10.2017 issued under Section 13(2) of the SARFAESI Act, amount claimed is Rs. 14,68,58,662/- and submitted that property was sold for Rs. 12,20,07,000/-. It is submitted that the sale is challenged here as it was sold at a lesser price. It is further submitted that borrower has submitted O.T.S. proposal but the Bank has not accepted O.T.S. and further action like taking of possession of other assets is scheduled to tomorrow, considering the same, interest of the borrower may be protected.

5. On the other hand, Advocate for Bank submitted that borrower has not pleaded any financial incapacity in waiver application, therefore, not entitled for any reduction of statutory deposit. It is also submitted that borrower is causing impediments at every stage and considering this the discretionary power may not be extended in favour of the borrower. It is further submitted that as per the statement of account, outstanding due from the borrower as on 19.6.2021 is Rs. 11,46,43,271.

6. In reply, Advocate for borrower submitted that calculation made by the Bank in the statement of account is not correct.

7. Advocate for auction purchaser submitted before passing any prohibitory order, an opportunity may be given to the auction purchaser to put forth their defence.

8. I have perused material papers. As per Section 18 of the SARFAESI Act, the amount of debt due from the borrower or amount claimed by the secured creditors or determined by the Debts Recovery Tribunal (DRT) whichever is less, has to be taken into consideration for the purpose of deposit.

9. Here notice amount is Rs. 14,68,58,662/- and amount claimed by the secured creditor as on 19.6.2021 is Rs. 11,46,43,271/-. Admittedly, there is no determination of debt as on today. So considering these aspects, without prejudice to the rights of both parties, the amount claimed by secured creditor as on 19.6.2021 which is lesser has to be taken into consideration for the purpose of deposit

10. Advocate for applicants submitted that borrower is willing to settle the matter and in fact submitted O.T.S. proposal, but Bank has not accepted. Now, considering submissions of both sides and considering the circumstances pointed out, particularly a huge amount of Rs. 12,20,07,000/- is already realized after 13(2) notice. I am of the view that reducing statutory the deposit to 25% is just and reasonable. Therefore, applicants shall deposit 25% of Rs. 11,46,43,271/- on or before 13.9.2021 for entertaining Appeal, in the form of Demand Draft with the Registrar of this Tribunal, failing which appeal stands dismissed automatically.

11. As per Section 18 Proviso 2 of SARFAESI Act, unless statutory deposit is made Appeal cannot be entertained. So the question of granting any interim order does not arise without making any deposit. However, to protect the interest of both parties, it is ordered that the moment deposit is made from that date i.e. from the date of deposit onwards parties shall maintain status-quo for a period of four weeks and parties are at liberty to move necessary interim applications after Appeal is entertained and

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get ready for adjudication of those interim applications. 12. As and when the said amount is deposited, it shall be invested in term deposit in the name of Registrar, DRAT, Mumbai, with respondent-Bank, initially for a period of 13 months and thereafter it will be renewed periodically. 13. Stand over to 14.9.2021 for reporting compliance of payment of deposit.
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