Dr. Santosh Uttam Sawane & Ors. v. Indodstar Capital Finance Ltd. & Anr.

…Appellant

…Respondent

Case No: Appeal on Diary No. 1174/2023

Date of Judgement: 14/07/2023

Judges:

Mr. Justice Ashok Menon, Chairperson

For Appellant: Ms. Aarti Suvarna, Advocate.

For Respondent: None.

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Facts:

Arguments by All Parties:

The Appellants contend that the memorandum of deposit of title deed relied upon by the 1st Respondent is forged and fabricated, and therefore, the mortgage is not valid. The Appellants are under financial strain, with the 2nd Appellant suffering from cancer and unable to work as a doctor, placing the entire burden on the 1st Appellant as the sole earning member of the family. The Appellants have a strong prima facie case, as the memorandum of mortgage deposited as the title deed is forged, and they would be able to establish that there was no mortgage. The notice for taking possession of the secured assets, received on 08.07.2023, is defective, as possession is intended to be taken on 17.07.2023, which is less than the prescribed time period.

The Respondents, though served, have not appeared to date, and no specific arguments have been mentioned in the order.

The court finds that the Appellants had, despite challenging the validity of the mortgage, sold two flats admittedly with the consent of the 1st Respondent. If there was no mortgage, there was no need to obtain the consent of the 1st Respondent for the sale of those flats. The police had initially refused to register a criminal case despite the allegation of forgery, and the Learned Magistrate has also refused to proceed with the private complaint preferred by the Appellants. Under the circumstances, there is no prima facie evidence of any fabrication of documents pertaining to the mortgage. The Appellants have not produced any documents pertaining to their income to establish that they are under financial strain. Under the circumstances, the Appellants are not entitled to any indulgence on the part of the court to invoke the third proviso to Section 18(1) of the SARFAESI Act to get the amount reduced to a minimum of 25%. After having paid ₹40 lakhs towards the amount demanded under Section 13(2), the outstanding balance would approximately be ₹1,38,31,551/-. Subsequent interest would also become due. Since the Respondents have not appeared to contest the matter, the court fixes the threshold amount at around ₹1.40 crores. The Appellants are directed to deposit a sum of ₹60 lakhs toward the pre-deposit in two equal installments of ₹30 lakhs each for entertaining the appeal. The first installment of ₹30 lakhs shall be payable within two weeks, i.e., on or before 28.07.2023, and the second installment of ₹30 lakhs shall be payable within three weeks thereafter, i.e., on or before 18.08.2023. Failure to pay the amount within the stipulated time shall result in the dismissal of the appeal without any further reference to the court.

Cases Cited:

No specific cases have been cited in the order.

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 18(1) (Pre-deposit requirement for entertaining an appeal)

Code of Criminal Procedure, 1973 (CrPC)