DRAT allowed the appeal against SARFAESI measures with a reduced pre-deposit requirement and deferred the possession proceedings.
The Debts Recovery Appellate Tribunal (DRAT) Mumbai Bench headed by Justice Ashok Menon (Chairperson) reviewed an appeal and held that compliance with the mandatory pre-deposit requirement under the SARFAESI Act is essential for entertaining an appeal, but considering the appellant's arguable case and financial constraints, the pre-deposit amount was reduced, and possession proceedings were deferred subject to timely compliance with the payment schedule.
The Debts Recovery Appellate Tribunal (DRAT) adjudicated an appeal challenging the order dated August 13, 2024, passed by the DRT, Nagpur, which denied protection to the appellant against SARFAESI measures initiated by the respondent bank for recovery of debts. The appellant, a mortgagor, had contested the bank’s actions, including the sale of the secured property and the scheduled physical possession of the property by the auction purchaser on September 13, 2024. The appellant raised several objections, such as inconsistencies in the dates of NPA, demand notices, and possession proceedings, as well as procedural flaws in the execution of orders under Section 14 of the SARFAESI Act.
The DRAT observed that compliance with the mandatory pre-deposit requirement was necessary to entertain the appeal. The debt due was calculated as ₹39,40,309.73, inclusive of interest, after adjusting the auction sale proceeds. Acknowledging the appellant's arguable case and financial condition, the Tribunal reduced the pre-deposit amount to ₹18 lakhs. The appellant submitted ₹12,20,000 immediately and was directed to pay the balance in two instalments by October 8, 2024, with the condition that failure to comply would result in dismissal of the appeal.
The Tribunal deferred the scheduled possession of the property until the next hearing, subject to compliance with the pre-deposit schedule. It also directed that the deposited amount be invested in term deposits with a nationalized bank. The respondent was granted liberty to file a reply in the appeal with an advance copy to the appellant. The matter was posted for compliance reporting on September 25, 2024.
Mr. G.R. Kinkhabwala i/b Narendra L. Karamchandani, Advocate represented the Appelant.
Mr. K.B. Nair i/b M/s Intralegal, Advocate appeared for Respondent No. 1.
Mr. Radhe Agarwal and Ms Aarti Suvarna, Advocates appeared for Respondent No. 3.
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