M/s Ginning and Ginning & Ors Vs Bank of Maharashtra

Ashok Menon, Chairperson

1. The appellants are in appeal impugning the order dated 12.08.2024 dismissing I.A. No.1396/2024 in Securitisation Application(S.A.) No.232/2024 by the Debts Recovery Tribunal, Nagpur (D.R.T) declining to grant the protection sought by them from the Sarfaesi measures initiated by the respondent bank for recovery of debts from them under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short)

2. To entertain the appeal, the appellants will first have to comply with the mandatory provisions u/s 18(1) of the SARFAESI Act by making the pre-deposit of the debt due.

3. The appellants have raised several contentions in their challenge to the Sarfaesi action. It is pointed out that the factory premises belonging to the appellants have already been surrendered voluntarily and the appellants have no objections in the bank proceeding to sell that property which is worth more than ₹2 crores, according to them. The bank will have to get the factory premises valued before proceeding to sell it. It is their residential property which the appellants seek to protect now. The amount demanded as per the 13(2) notice is ₹2,38,82,964. The impugned order does not go into the merits of the challenges raised to the Sarfaesi action. The appellants are ready and willing to settle the entire debt. They want the factory premises to be sold before proceeding against the residential premises. The appellants have produced their income tax returns to indicate that they are under financial strain.

4. Considering all the facts and circumstances, I find that justice will be granted if the appellants are directed to deposit a sum of ₹70 lakhs as a pre-deposit for getting the appeal entertained. The Ld. Counsel appearing for the appellants submits that they are willing to deposit a sum of ₹10 lakhs by way of demand draft/RTGS within two days. Subject to the payment being made in two days, the Sarfaesi action as regards the residential premises shall stand stalled. The balance amount of ₹60 lakhs shall be paid in two instalments as stated hereunder.

5. Default in payment of any of the amount/instalment on time shall entail the dismissal of the appeal without any further reference to this Tribunal.

6. 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.

7. As and when the said amount is deposited, it 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.

8. 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.

Post on 18.09.2024 for reporting compliance.