TaxTMI 
TaxTMI 
2024 (1) TMI 1474
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....to deposit a total sum of Rs.35 Crores as a condition precedent for entertaining their Appeal. The DRAT, in the impugned order, recorded that the Appellants undertake to deposit a sum of Rs.10.25 Crores on or before 19th January 2024 by 2:30 pm., and if the said deposit was made within the stipulated time, dispossession of the Appellants (the Petitioners herein) from the secured asset shall stand deferred till the next date. The DRAT further directed that the balance amount of Rs.24.75 Crores would be paid in two installments in the following manner : Numbers of Instalments Payment on or before 1^st Instalment Rs.10,00,00,000/- 02.02.2024 2^nd Instalment Rs.14,75,00,000/- 16.02.2024 The DRAT ordered that in default, the Appeal shall stand dismissed, without any further reference to the Court. 2. Mr. Khandeparkar, the Learned Counsel appearing on behalf of the Petitioners, assailed the aforesaid order of the DRAT on two basic grounds. The first ground was that the amount payable to the 1st Respondent-ARC, was not the amount of Rs. 84 Crores as recorded in the impugned order, but approximately a sum of Rs.49 Crores. He submitted that this figure has been arriv....
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.... the amount of pre-deposit as contemplated under Section 18 of the SARFAESI Act. In fact, since possession was to be taken on 19th January 2024, the Petitioners themselves undertook to the DRAT that they would deposit a sum of Rs.10.25 Crores or on before 19th January 2024 so that they would not be dispossessed from the secured assets. Once this is the case, we find that it is now too late in the day for the Petitioners to contend that the amount on which the pre-deposit ought to have been calculated should have been Rs.49 Crores and not Rs.84 Crores as mentioned in the impugned order. 5. This apart, we find that even in law the aforesaid argument is unsustainable. As rightly submitted by Mr. Thakkar, the Learned Senior Counsel appearing on behalf of the 1st Respondent-ARC, the 2nd proviso to Section 18(1), and which is really germane for our purposes, inter alia stipulates that no Appeal shall be entertained unless the borrower has deposited with the DRT 50% of the amount of "debt due" from him as claimed by the secured creditors, or determined by the DRT, whichever is less. He submitted that the 3rd proviso gives power to the DRAT to reduce the deposit amount from 50% to 25% p....
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....the Section 13(2) notice includes future interest (as in the present case), the same would certainly be included in the amount of "debt due" from the borrower to the secured creditor as contemplated under the 2nd proviso to Section 18(1) of the SARFAESI Act. We, therefore, find no justification in the statute to hold that it is only the figure that is mentioned in the 13(2) notice that is to be taken into consideration, and not the future interest accrued on the said sum, whilst determining the deposit amount under the 2nd proviso to Section 18(1) of the SARFAESI Act. The amount of deposit would have to be determined on the basis of the amount of the "debt due" by the borrower to the secured creditor on the date when the Appeal is filed in the DRAT. This would not only include the amount mentioned in the Section 13(2) notice but also interest accrued thereon till the date of filing of the Appeal under Section 18 of the SARFAESI Act. We find that this issue is no longer res integra and is covered by a decision of a Division Bench of this Court to which one of us was a party (B.P. Colabawalla, J.) in the case of MRB Roadconst.. Pvt. Ltd. vs. Rupee Co-Op. Bank (2016 (3) Mh.L.J. 589). ....
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....ng the plain language of the statute. To interpret the 2nd proviso to section 18(1) in this fashion, to our mind, would clearly violate the plain and unambiguous language of the said section. 19. We must mention here that after the issuance of the notice under section 13(2) and before the appeal is filed in the DRAT under section 18 of the SARFAESI Act, if the borrower has made any part payment of the debt due to the secured creditors, then credit for the same would have to be given to the borrower and for the purposes of deposit under the 2nd proviso to section 18(1), the reduced amount (after giving credit) would have to be taken into consideration for determining the amount required to be deposited by the borrower. This is simply because on the date of filing of the appeal, the debt due to the secured creditor would be reduced after giving credit for the amount already paid." 7. This now only leaves us to deal with the decision of the Hon'ble Supreme Court in the case of Sidha Neelkanth Papers Industries Private Limited (supra). Mr. Khandeparkar laid tremendous stress on paragraph 34 of the said decision to contend that only the amount mentioned in the 13(2) noti....
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....re, find that the reliance placed by Mr. Khandeparkar on the decision of the Hon'ble Supreme Court in Sidha Neelkanth Papers Industries Private Limited (supra) is wholly misplaced. The aforesaid judgment, when read as a whole does not mandate that where only the 13(2) notice and/or 13(4) measure is challenged without challenging the sale notice, only the amount mentioned in the 13(2) notice would be the figure which would be taken into consideration for determining the pre-deposit. In any event, in the facts of the present case, even otherwise, we find that in the Securitization Application filed by the Petitioners herein, they had in fact challenged the sale notice published by the 1st Respondent-ARC. Merely because by the time the Securitization Application came to be decided the sale did not fructify makes little difference. Once this is the case, we find that there is no merit in the aforesaid argument of Mr. Khandeparkar. 9. As far as his argument regarding the shortage of time to deposit the amount is concerned, we find that this argument cannot lie in the mouth of the Petitioners at all. As mentioned earlier, possession of the secured asset was to be taken on 19th Jan....