TaxTMI 
TaxTMI 
2018 (10) TMI 1825
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....d Iron and Steel Manufacturing and Trading company, incorporated under the Companies Act, 1956 and it has its factory at No.67/1, 2A & 2B, G.N.T Road, Chinnambedu Village, Ponneri Taluk, Tiruvallur District. The 2nd petitioner herein, is the Managing Director of the 1st petitioner company and the 3rd petitioner herein, is the director of the 1st petitioner company, and the 4th petitioner herein, is a separate company, incorporated under the Companies Act, 1956. Petitioners 2 to 4, are also the guarantors for the facilities availed by the 1st petitioner company. 3. The claim of the petitioners is that the 1st petitioner company availed finance facility from the Corporation Bank, the 4th respondent herein. A notice dated 14.07.2016 was issued to the petitioner company by the respondent bank, under Section 13(2) of the SARFAESI Act, 2002, contending that the 1st petitioner-s account had become NPA (Non Performing Asset) from 30.05.2016. The petitioners would contend that prior to 14.07.2016, at no point of time, the 4th respondent bank sent any notice to the 1st petitioner that his account has become NPA. That apart, the petitioners would contend that there had been seve....
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....he respective applicants. 7. The petitioners would also contend that since the 4th respondent had already issued notice on 14.07.2016 under Section 13(2) of the SARFEASI Act 2002, and thereafter, on 17.11.2016, filed O.A.No.105 of 2017, the subsequent notice on 17.12.2016 issued under Section 13(2) of the SARFAESI Act 2002, is invalid and unsustainable 8. The petitioners would further contend that the 2nd respondent Tribunal (DRT~I), after hearing the Securitisation Application.No.30 of 2017, granted an interim order on 07.04.2017. Thereafter, during the course of the hearing on 15.11.2017, the petitioner, relied on the Judgment of the Hon-ble Supreme Court in Transcore case reported in (2008) 1 SCC 125, and raised a preliminary issue that, once notice under SARFAESI Act 2002 is issued and then if any O.A. under the RDB Act is filed, then no measures under the SARFAESI Act 2002, can be initiated by the secured creditor. 9. Furthermore, the petitioners would contend that after hearing the matter on various dates, on 18.01.2018, DRT~I, passed an order regarding the maintainability of the relief sought for, as regards the challenge to the notice issued under....
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....action under SARFAESI Act 2002 and issued a notice dated 17.12.2016 under Section 13(2) of the SARFAESI Act 2002, calling upon the petitioners to pay a sum of Rs. 240,03,62,830.86. Since the petitioners failed to make the said due amount, the respondent bank has taken possession of the securities by issuing notice under Section 13(4), on 20.03.2017. 13. The respondents 3 and 4 would also submit that the petitioners challenged the notice issued under Section 13(2) and Section 13(4) of the SARFAESI Act 2002, before DRT~I in S.A.No.30 of 2017. When the question of maintainability was raised by the Registry with regard to the relief sought for against the notice under Section 13(2) of the SARFAESI Act 2002, by order dated 05.04.2017, DRT~I has directed the Registry to number SA.SR.No.1860/20, leaving the issue of maintainability open. Thereafter, when the hearing took place on 07.04.2017, the proceeding of DRT~I, as recorded is as follows: "I.A.No.222 of 2017" ~ it is a petition filed for grant of stay of the notices impugned in S.A.No.30 of 2017". 14. Before the Tribunal, the respondent bank have stated that they have no intention to take actual possession of the schedul....
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....rs. 20. On the other hand, learned counsel for the respondent bank vehemently argued that in respect of the mandatory pre deposit under Section 18 of the SARFAESI Act 2002, wherein, the Act provides for 50% of deposit, before DRAT, Chennai, proper reasons were not adduced by the petitioners for seeking waiver. DRAT, Chennai, has imposed a pre deposit only Rs. 70 crores, as against the amount due and payable is Rs. 120 crores, which is 50% of the total due amount of Rs. 240,03,62,830.86 crores. DRAT, Chennai, has already shown leniency on the petitioners which is sufficient. Hence, the order of the DRAT, Chennai, directing the petitioners to comply with the condition of pre deposit to entertain the appeal, has to be sustained. 21. The main issue to be decided by this Court, is only with regard to the order passed by DRAT, Chennai, imposing Rs. 70.00 crores, as pre~deposit, to entertain the appeal, filed under Section 18 of the SARFAESI Act 2002, whether sustainable or not?. Section 18 of the SARFAESI Act 2002, reads as under: "Any person aggrieved, by any order made by the Debts Recovery Tribunal under Section 17, may prefer an appeal along with such fee, as ma....
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.... to be decided by DRAT. Hence, at this point of time, it may not be appropriate for this Court to express anything on the merits of the appeal to be decided by DRAT. 24. While considering the issue in I.A. filed by the petitioners, seeking waiver of pre~deposit, under Section 18, especially the notice dated 14.07.2016 issued under Section 13(2) of the SARFAESI Act 2002, the total amount due to the bank, as on 14.07.2016 was Rs. 229,52,99,307.86. Bank has recovered only 15 crores from the petitioners, by way of sale of one of the properties of the petitioners. We have to consider as to whether, DRAT, Chennai, the Appellate forum, was right, in ordering pre deposit or not. Whether, DRAT, Chennai, is refined to go into merits of the appeal or not, while directing pre deposit. 25. On careful perusal of Section 18 of the SARFAESI Act 2005, it could be seen that the Act does not provide for a complete waiver and it only gives power to the Appellate Tribunal under the proviso to Section 18 to exercise its discretion to reduce the amount, not lesser than 25% of the amount due, as claimed by the secured creditors. As such, the amount claimed by the respondent bank is around Rs....