• Interim payment made as ordered by DRT- with deficiency

I want guidance SC order, which I am told is there that when you pay certain value as per orders of DRT, ( Chennai) with deficency - Stay vacated & case dismissed - Went on Appeal to DRAT Chennai, Ordered to Pay 50% of claim vlaue at Rs.11.50 laks wereas as per order of DRT I had already paid Rs.5.5 laks which is not taken into account while directing me by DRAT Chennai about part apyment alreadyt made for arriving at the 50% ordered as per SARFAESI ACT Under 17(1)(Against ordered Rs.In DRAT again 50% payment ordered without considering part of payment already made to the claimant.
The second thing is that the claimant had committed many illegal acts not considered by DRAT. Chennai.
1. Conveying more than what was advertised under 13(2)
2. Auctioning off property not on mortgage which was lying in adjacent plot.
3. Not submitting Copy of valuation report to the debtor for approval
4. No Notice under 50 (C) of IT ACT issued to debtor
5. Taking illegal possession of the property by breaking open the door.
6. Valuation report when obtained through RTI ACT evaluates what is located in adjacent property also. 

Please advise us. We are preferring our appeal to HC, Madras in a day or two.
Asked 7 years ago in Civil Law

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2 Answers

Any person aggrieved by the order of the DRT under

Section 17 of the SARFAESI Act, is entitled to prefer an appeal

along with the prescribed fee within the permitted period of 30

days. For ‘preferring’ an appeal, a fee is prescribed, whereas

for the Tribunal to ‘entertain’ the appeal, the aggrieved person

has to make a deposit of fifty per cent of the amount of debt

due from him as claimed by the secured creditors or

determined by the DRT, whichever is less. This amount can, at

the discretion of the Tribunal, in appropriate cases, for recorded

reasons, be reduced to twenty- five per cent of the debt

2) in Misc. Appl. No.100 of 2013 in SA No.132 of 2012 in the case titled M/s Shree Acids and Chemical Ltd. and Anr. vs. M/s. ASREC (India Ltd.) and Ors. requirement of pre-deposit cannot be waived. The said order may be reproduced hereunder for ready reference:-

"This Tribunal has already taken a considered view in Misc. Appeal No.100/2013 arising out of S.A. No.132/2012 (Delhi-I) M/s Shree Acid & Chemical Ltd. & Another vs. M/s ASREC (India) Ltd. & Ors. that when an appeal is filed under Section 18, requirement of pre- deposit cannot be wished away. Having known this view, the counsel for the appellant still insists on making submission to draw distinction between the judgment and the statutes and states that there will be some scope where requirement of pre deposit may not be there. Since this Tribunal has already taken a considered view, after hearing the counsel on all aspect, the Tribunal does not deem it proper to hear the counsel for the appellant afresh in this regard.

Since 25% of the amount determined is the minimum requirement of the pre-deposit, the appellant would be required to make the pre-deposit of the amount what is the minimum requirement. Let the appellant deposit 25% of the amount determined. Two months time is given to the appellant to make the pre-deposit. The Waiver Application (IA No.17 of 2013) is disposed off accordingly.

3) It was explained by the Supreme Court in Narayan Chandra Ghosh vs. UCO Bank and Ors. (supra) as under:-

"7. Section 18(1) of the Act confers a statutory right on a person aggrieved by any order made by the Debts Recovery Tribunal under Section 17 of the Act to prefer an appeal to the Appellate Tribunal. However, the right conferred under Section 18(1) is subject to the condition laid down in the second proviso thereto. The second proviso postulates that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less. However, under the third proviso to the sub-section, the Appellate Tribunal has the power to reduce the amount, for the reasons to be recorded in writing, to not less than twenty-five per cent of the debt, referred to in the second proviso. Thus, there is an absolute bar to entertainment of an appeal under Section 18 of the Act unless the condition precedent, as stipulated, is fulfilled. Unless the borrower makes, with the Appellate Tribunal, a pre- deposit of fifty per cent of the debt due from him or determined, an appeal under the said provision cannot be entertained by the Appellate Tribunal. The language of the said proviso is clear and admits of no ambiguity.

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

The irregularities or illegal activities done by the opposite party are to be highlighted in the writ petition you intend to file before high court.

But before that you should exhaust the remedy available before the DRAT without which any appeal before high court even in the form of writ may not be entertained properly, so dont waste time in approaching high court in a hurried manner.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

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