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2020 DIGILAW 2232 (MAD)

K. Balaraman v. Shriram Housing Finance Limited

2020-11-24

M.SATHYANARAYANAN, R.HEMALATHA

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JUDGMENT : M. Sathyanarayanan, J. 1. This Civil Revision Petition has been filed against the order dated 26.10.2020 in A.I.R. (SA) No. 101 of 2020 on the file of the Debts Recovery Appellate Tribunal, Chennai. 2. The petitioners filed A.I.R. (SA) No. 101 of 2020 on the file of the Debts Recovery Appellate Tribunal at Chennai, challenging the order, dated 14.09.2020, in S.A. No. 523 of 2019, on the file of the Debts Recovery Tribunal-I, Karnataka at Bengaluru, and prayed for entertainment of the said appeal and also prayed for waiver of pre-deposit under Section 18(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act" for brevity). 3. A perusal of the materials would disclose among other things that the 1st petitioner is carrying on the business of construction of Apartments and for the purpose of his business, he was sanctioned a Term Loan of Rs. 10 Crores, and the disbursal of Rs. 9.5 Crores was also made, and the petitioner also executed necessary documents and created security in the form of immovable properties. 4. It appears that the petitioners, due to vagaries of business, were unable to fulfill their obligations, and therefore, their account was classified as 'Non-Performing Asset'. The respondent/financial institution invoked the provisions of the SARFAESI Act and issued notice under Section 13(2), followed by notice under Section 13(4) of the said Act. 5. The petitioners made a challenge to the possession notice, dated 31.08.2019, for recovery of Rs. 9,17,98,297/-, by filing S.A. No. 523 of 2019 before the Debts Recovery Tribunal-I, Karnataka at Bengaluru, and vide order dated 14.09.2020, it came to be dismissed, and challenging the legality of the same, they filed A.I.R. (SA) No. 101 of 2020 before the Debts Recovery Appellate Tribunal at Chennai, and for entertainment of the same, and also with a prayer for waiver of pre-deposit, filed an application under Section 18(1) of the SARFAESI Act. 6. The Tribunal has taken note of the arguments advanced on behalf of the applicants that, after the demand notice, dated 20.06.2019, issued for recovery of Rs. 9.22 Crores, the petitioner has paid a sum of Rs. 4.10 Crores, and also admitted that they are due and payable of only Rs. 3.05 Crores, and has directed the applicants to pay 40% of the said amount in the form of pre-deposit, i.e. Rs. 9.22 Crores, the petitioner has paid a sum of Rs. 4.10 Crores, and also admitted that they are due and payable of only Rs. 3.05 Crores, and has directed the applicants to pay 40% of the said amount in the form of pre-deposit, i.e. Rs. 1.40 Crores, by way of two installments, out of which, 1 installment of Rs. 70 Lakhs has to be deposited within four weeks from the date of the order and the 2 installment of Rs. 70 Lakhs to be deposited in the next four weeks. Challenging the legality of the same, the present Civil Revision Petition has been filed. 7. Mr. S. Sethuraman, learned counsel appearing for the petitioners, has drawn the attention of this Court to the common order dated 18.11.2008 in W.P. Nos. 3958, 3959, 5172 of 2008 and 17009 of 2007 and C.R.P. (PD) Nos. 1519 and 3301 of 2007 rendered by the Division Bench of this Court, and by specifically drawing the attention of this Court to Para No. 18 of the said judgment, would submit that, in the light of the ratio laid down in the said judgment, the impugned order of the Debts Recovery Appellate Tribunal warrants interference and the petitioners may be permitted to make a minimum deposit of Rs. 25,00,000/- (Rupees Twenty five lakhs only) as pre-deposit for entertainment of the appeal. 8. Mr. Ajmal Azzath, learned Standing Counsel appearing for the respondent/financial institution, would submit that the petitioner is a willful defaulter, and without the permission of the respondent, has also alienated some of the immovable Secured Assets, and the Tribunal has taken into consideration the fact as to the admitted claim of the petitioners and has accordingly, passed the impugned order, and since the Debts Recovery Appellate Tribunal has exercised its discretion in a fair and proper manner, interference may not be warranted, and prays for dismissal of the Civil Revision Petition with costs. 9. This Court has carefully considered the rival submissions and also perused the materials placed before it. 10. The Tribunal, in the impugned order, has taken note of the submission made by the learned counsel appearing for the applicants/revision petitioners herein, as to the demand of Rs. 9.22 Crores made by the respondent and that they paid a sum of Rs. 4.10 Crores and the admitted amount on their part is Rs. 10. The Tribunal, in the impugned order, has taken note of the submission made by the learned counsel appearing for the applicants/revision petitioners herein, as to the demand of Rs. 9.22 Crores made by the respondent and that they paid a sum of Rs. 4.10 Crores and the admitted amount on their part is Rs. 3.05 Crores, and has directed them to deposit 40% of the said amount in two installments. 11. The primordial submission made by the learned counsel appearing for the petitioners is that, despite the economic meltdown on account of Covid-19 pandemic, the petitioners have made a substantial amount as deposit and therefore, some leniency or sympathy may be shown to the petitioners in reducing the said amount in the light of the 3rd proviso to Section 18(1) of the SARFAESI Act. 12. Per contra, the learned Standing Counsel appearing for the respondent/financial institution would submit that, in the light of fact that the petitioner admitted the dues, a right discretion has been exercised by the Tribunal and there may not be any need for interference by this Court in exercise of its jurisdiction under Article 227 of the Constitution of India. 13. This Court, after taking into consideration the rival submissions, is of the view that, from the facts recorded in the impugned order, the petitioner had paid a sum of Rs. 4.10 Crores which is nearly half of the due amount, and taking into consideration the submission of the petitioner that he is due and payable of Rs. 3.05 Crores, is of the view that the 3rd proviso to Section 18(1) of the SARFAESI Act, in the facts and circumstances of the case, has application. 14. In the result, this Civil Revision Petition is partly allowed, and the impugned order, dated 26.10.2020, is modified to the effect that the petitioner shall make a pre-deposit of Rs. 75,00,000/- (Rupees Seventy Five Lakhs only) drawn in favour of the Registrar, Debts Recovery Appellate Tribunal at Chennai, as ordered in the impugned order, and out of the same, a sum of Rs. 25,00,000/- (Rupees Twenty Five Lakhs only) has to be deposited on 30.11.2020, and the balance amount of Rs. 50,00,000/- (Rupees Fifty Lakhs only) has to be deposited within three weeks thereafter, i.e. on or before 15.12.2020. 25,00,000/- (Rupees Twenty Five Lakhs only) has to be deposited on 30.11.2020, and the balance amount of Rs. 50,00,000/- (Rupees Fifty Lakhs only) has to be deposited within three weeks thereafter, i.e. on or before 15.12.2020. If the petitioner fails to comply with any of the installments as modified in this order, it will amount to noncompliance of the conditional order, and it will be open to the Tribunal to proceed further in accordance with law. No costs. Connected miscellaneous petitions are closed. Call on 17.12.2020 under the caption "For reporting compliance".