PRUDENT ARC LIMITED Vs. SIDHA NEELKANTH PAPER INDUSTRIES

JUDGEMENT

(1.) The judgment and order dated 11.03.2020, passed by the learned DRAT, Delhi in Appeal No.467/2019, filed by M/s Sidha Neelkanth Paper Industries Pvt. Ltd. (the respondent No.1 herein) has been challenged in the instant writ petition. By the impugned judgment, the learned DRAT has waived the requirement of 50% pre-deposit of the amount due to the Bank under the second proviso to Section 18 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short "the SARFAESI Act"). Aggrieved by the said order, the petitioner has filed the present petition. FACTS OF THE CASE

(2.) A glance at the relevant facts and sequence of events leading to passing of the impugned order, is necessary. The respondent No.1/principal borrower had approached the respondent No.5/Andhra Bank for sanction of credit facility and in the year 2008, it had approached Standard Chartered Bank for taking over the debt taken by it. In the year 2010, respondent No.5/Andhra Bank sanctioned Open Cash Credit (in short "OCC") limit for a sum of Rs.15.5 crores in favour of the respondent No.1. Immovable properties were mortgaged by the guarantors and by the respondent No.1 to secure this cash credit facility. After taking over the existing cash credit facility, a further ad-hoc OCC limit to the tune of Rs.3 crores, due to the Standard Chartered Bank, was cleared by the respondent No.5/Andhra Bank.

(3.) However, respondent No. 1, failed to make prompt re-payment to the respondent No.5/Andhra Bank and as a result, its account was declared as a Non Performing Asset (in short "NPA"). A notice dated 10.05.2013, was issued by the respondent No.5/Andhra Bank under Section 13(2) of the SARFAESI Act, calling upon the respondent No.1 to pay the outstanding amount of Rs.16,61,91,174.67/- (Rupees sixteen crores sixty one lakh ninety one thousand one hundred seventy four rupees and sixty seven paise only), payable as on 27.04.2013. The said payment was to be made within 60 days from the date of receipt of the notice. Objections thereto were raised by the respondents No.1 to 3 under Section 13(3A) of the Act, but we do not propose to go into the same as they are not relevant for the purposes of deciding the present petition.