M/s. M. B. Shah Jewellers & Ors. v. Deutsche Bank AG

…Appellant

Deutsche Bank AG

…Respondent

Case No: Appeal on Diary No. 1423/2022

Date of Judgement: 15/03/2023

Judges:

Mr Justice Ashok Menon, Chairperson

For Appellant: Ms Sonali Jain, i/b Ms Khushboo Agarwal, Advocate.

For Respondent: Mr R. L. Motwani, Advocate.

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Facts:

The Appellants have challenged the SARFAESI measures on various grounds, including:

  1. The demand notice issued under Section 13(2) of the SARFAESI Act on 07.09.2017, demanding a sum of ₹6,32,83,506.61, is not in accordance with the law, and the requirement under Section 13(3) to provide a break-up of the demanded amount has not been complied with.
  2. The demand notice was not issued by a proper Authorized Officer, who should be a Chief Manager of the Bank. The person who signed the notice, Mr. D.V. Satelkar, was not authorized on the date of issuance, and his authority came later.
  3. There is no CERSAI Registration of the mortgage, which is mandatory.
  4. Certain payments made by the Appellants have not been recorded in the statement of account.

Arguments by the Appellants:

Arguments by the Respondent Bank:

Order:

The Appellants have furnished a demand draft for ₹50 lacs (₹5 million) on the date of the order. The balance of ₹2.50 crores (₹25 million) shall be paid in two equal installments of ₹1.25 crores (₹12.5 million) each. The first installment shall be payable on or before 05.04.2023, and the second installment shall be payable on or before 26.04.2023. Since the Appellants have already deposited ₹50 lacs, there shall be a stay of further SARFAESI measures with regard to the secured assets. Breach of payment of the subsequent installments shall entail the dismissal of the appeal without further reference to the Tribunal. The amounts shall be deposited in the form of a Demand Draft with the Registrar of the Tribunal and invested in term deposits in the name of the Registrar, DRAT, Mumbai, with any nationalized bank, initially for 13 months, and thereafter to be renewed periodically. The Respondent Bank is at liberty to file a reply in the Appeal with an advance copy to the other side. The matter is posted on 06.04.2023 for reporting compliance concerning the payment of the first installment.

Sections and Laws Referred:

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

    • CERSAI Registration of mortgage (mentioned but not elaborated upon)

      Case Laws Referred:

      No case laws were referred in the order.