PRAVEEN TUBES CORPORATION REP BY ITS PARTNER RV BABU vs CITI BANK on 28 October 2026

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

IA 1515/2026 (Waiver) in A.IR:2810/2026

M/s Praveen Tubes Corporation & 3 ors V/S CITI Bank NA

28/10/2026

Learned Counsel for the Petitioner/Appellant and Respondent Bank are present.

This appeal is filed against the final order passed by the learned Presiding Officer, DRT-III, Chennai on 24.09.2026 in SA 7/2024.

This SA 7/2024 has been filed to set aside the order passed by the learned Chief Metropolitan Magistrate, Egmore, Chennai in Crl.M.P.No.22559/2023 on 26.07.2023.

Learned counsel for the petitioner submitted that demand notice under Section 13(2) of the SARFAESI Act was not served on the petitioners at all though Section 13(4) notice was served. Learned Presiding Officer in a challenge to the order passed under Section 14 of the SARFAESI Act, made an observation that the learned Chief Metropolitan Magistrate is not required to apply mind in deciding the application filed under Section 14 of the SARFAESI Act since the adjudication in an application filed under Section 14 is a ministerial and non adjudicatory nature. This finding of the learned Presiding Officer is not appropriate and legal in view of the fact that rendering judicial or quasi- judicial or ministerial act requires application of mind. It is further submitted that the petitioners had made payment of Rs.1 crore before the DRT. On these grounds, learned counsel for the petitioners seeks waiver of pre-deposit. No other ground is urged for waiver of pre-deposit.

Learned Counsel for the Respondent Bank submitted that the account has been classified as NPA in the year 2021. Still, the Petitioners have not made any efforts to settle the loan account. The property is not sold so far. He strongly opposes waiver of pre-deposit, as it is mandatory for entertaining this appeal, and for reducing the pre-deposit.

Considered the rival submissions and perused the records.

The issue as to whether Section 13(2) notice is served or not and the validity of the order passed by the Learned Presiding Officer, DRT-III, Chennai with regard to application of mind by Learned Chief Metropolitan Magistrate, Egmore, Chennai, will be considered in the main appeal. Pre- deposit is mandatory for entertaining this appeal under Section 18(1) of the SARFAESI Act, 2002.

On a query as to the current outstanding due as on the date of filing this appeal, Learned Counsel for Respondent Bank submitted that after giving credit to all the payments made, including Rs.1.00 crore paid before DRT, the outstanding due as of now is Rs.6,21,84,285.30p.

Learned Counsel for Petitioners submitted that as per the counter filed by the Respondent Bank, it is mentioned that as per Section 14 order, the amount due was Rs.4,45,58,980.81p, with principal and interest, and 50% of this amount is Rs.2,22,75,419.40p, and 25% is Rs.1,11,39,745.20. He requests that this amount may be determined as pre-deposit. Section 14 application was filed on 10.1.2023, and the amount mentioned in the Section 14 application was extracted in this Section 14 order. But now, we are in 2026. The property is not sold so far.

The debt due is inclusive of interest as per the definition of debt under Section 2(1)(ha) of the SARFAESI Act, 2002, read with Section 2(g) of the RDB Act 1993, which had been settled by the Hon’ble Supreme Court of India in re, M/s. Sidha Neelkanth Paper Industries Private Limited & Another Vs. Prudent ARC Limited & Others (Civil Appeal No. 8969 of 2022, decided on 05.01.2023) reported in 2023 SCC Online SC 12.

Therefore, with a view to give an opportunity to the Petitioners to pay the loan and save the property from being sold, this Tribunals directs the Petitioners to make a pre-deposit of 25% of Rs.6,24,81,285.30p in two equal instalments within a period of four weeks from today, failing which this appeal would stand rejected.

25% of Rs.6,24,81,285.30p comes to Rs.1,56,20,321.32p, rounded off to 1,56,20,320/-.

Learned Counsel for Petitioners submitted that the Respondent Bank, armed with the orders obtained under Section 14 of the SARFAESI Act, 2002, will take physical possession of the secured asset at any time. Learned Counsel for the Respondent Bank also concedes that the Respondent Bank is trying to take physical possession of the secured asset. Learned Counsel for Petitioners submitted that he is ready with a Demand Draft for Rs.18.00 lakhs towards part pre-deposit and seeks interim protection.

In view of the filing of the appeal and orders passed in the waiver application, and also in view of the part pre-deposit of Rs.18.00 lakhs committed by the Petitioners, this Tribunal directs the Respondent Bank not to proceed further with taking physical possession of the secured asset till next hearing.

Registry is directed to receive the Demand Draft for Rs.18.00 lakhs towards part pre-deposit and invest the same in a Nationalized Bank for a reasonable period and renew it periodically, till further orders are passed.

Petitioners are directed to comply with the deposit of the balance pre- deposit ordered in two equal instalments, within a period of four weeks from today, failing which this appeal would stand rejected.

After deducting the part pre-deposit of Rs.18.00 lakhs, the balance pre- deposit comes to Rs.1,38,20,320/-, out of which the first instalment of Rs.69,10,160/- is to be made on or before 11.11.2026 and the second instalment of Rs.69,10,160/- is to be made on or before 25.11.2026.

The said pre-deposit should be made in the form of Demand Draft in favour of Registrar, DRAT, Chennai, payable at Chennai. In case pre-deposit is made within the stipulated period, Registrar shall invest the same in a Nationalized Bank for a reasonable period and renew it periodically, till further orders are passed.

Post the matter on 27.11.2026 for compliance.

Sd/-

Chairperson