Case Note & Summary
The petitioner, Ramkrushna Mahadev Bhumbar, a retired individual, filed a writ petition before the Bombay High Court, Nagpur Bench, challenging the action of the respondent bank (Dr. Punjabrao Deshmukh Urban Co-operative Bank Limited) in taking symbolic possession of his property under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The petitioner had availed a loan from the bank, and upon default, the bank initiated recovery proceedings. The petitioner sought to appeal against the symbolic possession before the Debt Recovery Tribunal (DRT) but was required to comply with the pre-deposit condition under Section 18 of the SARFAESI Act. The High Court, after hearing the parties, passed an order directing the petitioner to deposit a sum of Rs. 1,50,000 in two equal installments before the DRT. The first installment of Rs. 75,000 was to be deposited at the time of filing the appeal, and the second installment of Rs. 75,000 within two weeks thereafter. Upon such deposit, the DRT was directed to entertain the appeal and decide it in accordance with law. The Court further directed that if the appeal is decided in favor of the petitioner, he shall be entitled to withdraw the deposited amount. If the appeal is decided against the petitioner, the respondent bank shall be allowed to withdraw the amount without prejudice to its right to recover any further sum in accordance with law. The petition was disposed of with the rule made absolute in the above terms.
Headnote
A) Banking Law - Securitisation and Enforcement of Security Interest - Conditional Deposit for Appeal - Section 13(4), Section 17 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - The petitioner challenged the symbolic possession taken by the bank under Section 13(4) of the SARFAESI Act. The High Court directed the petitioner to deposit Rs. 1,50,000 in two installments before the Debt Recovery Tribunal as a condition for the Tribunal to entertain the appeal. The Court held that upon such deposit, the Tribunal shall decide the appeal in accordance with law, and the amount deposited shall be subject to the outcome of the appeal. (Paras 2-3)
Issue of Consideration
Whether the petitioner should be required to deposit a sum as a condition for the Debt Recovery Tribunal to entertain the appeal against symbolic possession under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Final Decision
The High Court directed the petitioner to deposit Rs. 1,50,000 in two equal installments before the Debt Recovery Tribunal. Upon deposit, the Tribunal shall entertain the appeal and decide it in accordance with law. The first installment of Rs. 75,000 to be deposited at the time of filing appeal, and the second installment of Rs. 75,000 within two weeks thereafter. If the appeal is decided in favor of the petitioner, he may withdraw the amount; if against, the bank may withdraw it without prejudice to further recovery. Petition disposed of with rule made absolute in above terms.
Law Points
- Conditional deposit for entertainment of appeal under SARFAESI Act
- Section 13(4) symbolic possession
- Debt Recovery Tribunal jurisdiction
