Baljit Singh Amrik Singh Sethi & Ors. v. Axis Bank Ltd.

Facts:

Arguments by the Parties:

The Appellants contended that the notice under Section 13(2) was not properly served on them. They argued that the third Appellant was incorrectly described as a co-borrower, whereas documents indicated that she was only a co-mortgagor. The Appellants claimed that the SARFAESI measures initiated by the Respondent Bank were defective and challenged them on these grounds. The Appellants stated that they were making an earnest attempt to clear the debt and requested an opportunity to save their residential premises by clearing the outstanding dues.

The Respondent Bank submitted that the Appellants were chronic defaulters, and as of 11.08.2023, the outstanding dues amounted to ₹7,22,85,059.50. The Respondent Bank argued that the Appellants had responded to the demand notice under Section 13(2), indicating that the allegation of non-receipt of the notice did not appear to be true. Regarding the incorrect description of the third Appellant as a co-borrower, the Respondent Bank stated that it was merely a typographical error and not of grave consequence. The Respondent Bank contended that no concession should be given to the Appellants in reducing the mandatory pre-deposit amount from 50% to 25% of the debt due.

Sections and Laws Referred:

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)

• • Section 13(2) (Demand Notice)
  • Section 13(4) (Taking possession of secured assets)
  • Section 14 (Application to District Magistrate/Chief Metropolitan Magistrate)

In conclusion, the Debts Recovery Appellate Tribunal, while considering the arguments of both parties and the financial strain claimed by the Appellants, did not find a strong prima facie case in favor of the Appellants. However, the Tribunal granted the Appellants an opportunity to deposit a pre-deposit amount of ₹2 crores in installments for entertaining the appeal. The Tribunal also provided guidelines for the investment of the deposited amounts and warned of dismissal of the appeal in case of default in payment of any installment. Additionally, the Tribunal granted interim relief to the Appellants by deferring the taking over of possession of the secured asset until the next date of hearing, subject to the payment of the first installment on time.