M/s. Oriana Diamonds & Ors. v. Dhani Loan & Services Ltd., & Ors

…Appellant

…Respondent

Case No: Appeal on Diary No. 1056/2023

Date of Judgement: 28/06/2023

Judges:

Mr. Justice Ashok Menon, Chairperson

For Appellant: Mr. Dhrumit Chauhan, Advocate.

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Facts:

Arguments by All Parties:

The counsel for the Respondent Bank vehemently opposed the application, stating that the Appellants do not require any indulgence for getting the amount of pre-deposit reduced. The amount due from the Appellants is approximately ₹4.66 crores, and all the contentions raised challenging the SARFAESI measures are totally untenable and unsustainable. The Appellants have not been successful in proving their financial strain because the balance sheets and income pertaining to the 1st Appellant firm have not been produced, and the income tax returns of the rest of the Appellants have also not been produced. As per the partnership deed, the 4th Appellant has major shares (90%) in the profit of the firm, and his financial status would definitely be relevant for determining the pre-deposit. Even going by the income tax returns filed, it seems that Appellants Nos. 2 and 3 have sufficient properties worth crores of rupees, and the fact that they do not have any income by itself would not indicate their financial status. They have properties that are not among the secured assets and could easily be liquidated for the purpose of payment of the debt or the pre-deposit. The counsel for the Respondent Bank argues that the amount should not be reduced to the minimum of 25% as sought by the Appellants.

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 13(3) (Breakup of the amount in the Demand Notice)
  • Section 14 (Enforcement of Security Interest)
  • Section 18(1) (Pre-deposit requirement for entertaining an appeal)

Security Interest (Enforcement) Rules

• • Rule 2(a) (Authorized Officer)