SMALL INDUSTRIES DEVELOPMENT BANK OF Vs. ADITYA DIAMONDS

JUDGEMENT

(1.) The Petitioners by the present Petition is challenging order dated 26th May, 2010 passed by the Debt Recovery Appellate Tribunal, Mumbai ('DRAT'). The impugned order had set aside the order dated 5th February, 2009 passed by the Debt Recovery Tribunal, Mumbai ('DRT'). By the impugned order, the Respondents were permitted to comply with the One Time Settlement ('OTS') by depositing the amount payable under the OTS together with the component of interest which according to the Respondents came to Rs.29,79,658/-. Thus the DRT order dated 5th February, 2009 which had allowed the Original Application No.260 of 2004 filed by the Petitioners and the issue of recovery certificate was set aside.

(2.) The Petitioner No.1 had on 23rd February, 1999 sanctioned the pre-shipment credit in Foreign Currency and export bill facility to Respondent No.1. These facilities were renewed from time to time and Respondent No.1 in order to secure payment to Petitioner No.1 executed various security documents. The Respondent Nos. 2 and 3 executed agreements of guarantee in favour of Petitioner No.1. The collateral security was also created by Respondent No.3 by way of equitable mortgage by deposit of title deeds pertaining to Flat No.61, 6th Floor, A-Wing, Tahnee Heights, Napeansea Road admeasuring 2820 Sq.ft. along with parking admeasuring 1719 Sq.ft. ('mortgage property'). The Petitioner No.1 having been specified that the securities created pursuant to the facilities sanctioned, disbursed an aggregate sum of Rs.16,04,67,373/- (principal amount after crystallisation of dollar limits) to Respondent No.1.

(3.) The Respondent No.1 thereafter defaulted in payment of its dues under the above facilities and its account with the Petitioner No.1 became irregular. The Petitioner No.1 in turn issued notices dated 25th September, 2003 and 29th September, 2003 to the Respondents recalling the above facilities and calling upon the Respondents to make payment of the dues amounting to Rs.19,55,68,905/- together with interest. Further notice was issued by the Petitioner No.1 on 15th October, 2003 to Respondent Nos.2 and 3 calling upon them to make payment of dues together with future interest. The Petitioner No.1 issued demand notice dated 12th November, 2008 under Section 13(2) of the SARFAESI Act for an amount of Rs.19,85,80,509/- with further interest at contractual rate of 14.5% p.a. payable within 60 days from the date of notice. This Notice was challenged by Respondent No.3 by filing Writ Petition No.606 of 2004 in this Court. By an order dated 13th January, 2004, this Court permitted Petitioner No.1 to take symbolic possession of the mortgaged property provided that Petitioner No.1 will not sell or dispose of the same. The Petitioner No.1 accordingly took symbolic possession of the mortgaged property.