M/S. SUNSHINE BUILDERS AND DEVELOPERSversusHDFC BANK LIMITED AND ORS.

                                                                              67 wp 3929-24.doc



                                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                          CIVIL APPELLATE JURISDICTION


                                          WRIT PETITION NO. 3929 OF 2024

LAXMI                 M/s. Sunshine Builders and Developers                      .. Petitioner
SUBHASH
SONTAKKE
Digitally signed by
LAXMI SUBHASH
                               Versus
SONTAKKE
Date: 2024.03.20
14:20:26 +0530
                      HDFC Bank Ltd. & Ors.                                      .. Respondents

                           Senior Advocate Mr. Gaurav Joshi a/w S. Purohit a/w Rutwij
                           Bapat a/w Shashank Fadia i/b. Priyanka Fadia for the Petitioner.

                           Senior Advocate Mr. Prateek Seksaria a/w Ishwar Nankani a/w
                           Huzefa Khokawala a/w Bhakti Jain i/b. Nankani & Associates for
                           Respondent Nos. 1 and 2.

                           Adv. Nimay Dave a/w Saloni Sulakhe a/w Punit Agarwal i/b.
                           Dhaval Vussonji and Associates for Respondent No.5.

                           Senior Advocate Mr. Venkatesh Dhond a/w Neveille Mukerji a/w
                           Asim Tirmizi i/b. Veritas Legal for Respondent No.6.

                           Mr. Mutahhar Khan for Official Liquidator.

                           Mr. Anil Bhagure, Assistant Official Liquidator.

                                           CORAM:       B. P. COLABAWALLA &
                                                        SOMASEKHAR SUNDARESAN, JJ.
                                           DATE:        MARCH 19, 2024

                      P. C.


                      1.             Mentioned. At the request of the Petitioner taken out of

                      turn.
                                                       Page 1 of 5
                                                     MARCH 19, 2024
                      Laxmi
                                                         67 wp 3929-24.doc



2.           The above Writ Petition has been filed challenging the

order dated 29th February, 2024 passed by the DRAT in Interim

Application No. 614 of 2022 in Appeal (Diary) No. 1208 of 2022. By the

impugned order, the DRAT directed the Petitioner to deposit a sum of

Rs. 125 crores as a pre-deposit under Section 18(1) of the SARFAESI

Act, 2002. The said amount was to be deposited in three instalments set

out hereunder:

            Instalments                        Payment date
            1st Instalment of Rs. 25 Crores    21st March, 2024
            2nd Instalment of Rs. 50 Crores 12th April, 2024
            3rd Instalment of Rs. 50 Crores 3rd May, 2024


It is being aggrieved by this pre-deposit order that the present Petition

is filed.



3.           Mr. Joshi, the learned Senior Counsel appearing for the

Petitioner, valiantly tried to convince us that the Petitioner is not a

mortgagor at all and is certainly not a borrower. Once this is the case,

the Petitioner cannot be asked to deposit any amount under Section

18(1) of the SARFAESI Act, 2002 because the Section clearly

contemplates that a pre-deposit order can be passed only against the

borrower and not against a third party. To buttress this argument, Mr.

                                Page 2 of 5
                              MARCH 19, 2024
Laxmi
                                                      67 wp 3929-24.doc



Joshi relied upon the definition of the word “borrower” as set out in

Section 2(1)(f) of the SARFAESI Act, 2002.



4.          On the other hand, Mr. Seksaria, the learned Senior

Counsel appearing for the 1st Respondent-Bank, submitted that the

argument canvassed by Mr. Joshi is wholly incorrect because the

documents clearly show that a mortgage of the entire property was

created, with the consent and knowledge of the Petitioner. He submitted

that the Development Agreement entered into by the Petitioner with the

borrower showed that the Petitioner would be entitled to 50% of the free

sale component, and which has now been converted into 50% of the

revenue pursuant to the Supplementary Agreement dated 31 st March,

2011. He therefore submitted that the entire Andheri Property was

mortgaged with the 1st Respondent-Bank and it is totally incorrect on

the part of the Petitioner to contend that the mortgage is invalid or not

created.



5.          We have heard the learned Counsel appearing for the

parties at quite some length. We have also carefully perused the order

passed by the DRAT. We find that the exact same argument canvassed

before us by the Petitioner was also canvassed before the DRAT. The

                              Page 3 of 5
                            MARCH 19, 2024
Laxmi
                                                       67 wp 3929-24.doc



DRAT, in paragraph 13 of the impugned order, has prima facie come to

the conclusion that the Petitioners had consented to the creation of the

mortgage. We, after perusing the record, do not find that the said

finding of the DRAT, is in any way, perverse which would require our

interference under Article 226 of the Constitution of India. In any case,

the said finding is prima facie finding and was given to determine

whether any pre-deposit ought to be ordered before the Appeal filed by

the Petitioner is entertained. Section 2(1)(f) of the SARFAESI Act, 2002

defines the word “borrower” inter-alia to mean any person who has

been granted financial assistance by any Bank or Financial Institution or

who has given any guarantee or created any mortgage or pledge as

security for the financial assistance granted by the said Bank or

Financial Institution. From this definition, it is absolutely clear that a

mortgagor, even though not being a guarantor or a principle borrower,

would still be included in the definition of the word “borrower” as

defined in Section 2(1)(f) of the SARFAESI Act, 2002. It is keeping this

definition in mind that the DRAT came to the conclusion that the

Petitioner ought to be directed to deposit the sum of Rs. 125 crores as a

pre-deposit for the Appeal to be entertained. This figure was arrived at

because the sale notice indicates that the debt due is approximately Rs.

259 crores.

                               Page 4 of 5
                             MARCH 19, 2024
Laxmi
                                                         67 wp 3929-24.doc




6.           We, in fact, inquired from Mr. Joshi whether his client is

even in a position to deposit 25% of the amount of the debt due, or even

25% of Rs. 232 crores which was the amount for which the mortgaged

property (Andheri Property) was sold. Mr. Joshi, on taking instructions,

has fairly stated that the Petitioner is not in a position to deposit even

the 1st instalment of Rs. 25 crores which is due on 21 st March, 2024. In

these circumstances, we find no reason to interfere with the impugned

order passed by the DRAT.



7.           The above Writ Petition is therefore dismissed. However,

there shall be no order as to costs.



8.           This order will be digitally signed by the Private Secretary/

Personal Assistant of this Court. All concerned will act on production by

fax or email of a digitally signed copy of this order.



[SOMASEKHAR SUNDARESAN,J.]                     [B. P. COLABAWALLA, J.]




                                Page 5 of 5
                              MARCH 19, 2024
Laxmi