Dismissed

Mr a Darwin v. Housing and Urban Development Corporation Ltd.

DRAT12 Sept 2022REGULAR APPEAL/9/2014

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal dismissed the appeal against the DRT-I order, upholding the security institution's actions. The court rejected claims of procedural non-compliance regarding service of notices and newspaper publication, finding they adhered to the SARFAESI Act and Rules.

What did the court decide?

Appeal RA (SA) 9/2014 dismissed; All pending IAs closed; Costs to both parties.

Mr a Darwin versus Housing and Urban Development… — Contract and Commercial Disputes | DRAT (2022)

¶1

RA (SA) 9/2014

¶2

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

¶3

Dated the 12^th day of September, 2022

¶4

PRESENT: HON'BLE MR. JUSTICE S.RAVI KUMAR CHAIRPERSON

¶5

RA (SA) 9/2014

¶6

(S.A.No.245/2009, on the file of DRT-I, Chennai)

¶7

Between

¶8

A. Darwin, S/o. P. Anandan, No.10, F/1, Gopal Street, Arni, Tiruvannamalai District – 632 301.

¶9

… Appellant

¶10

And

¶11

Housing and Urban Development Corporation Ltd, Chennai Regional Office,

¶12

Rep. by its Authorised Officer & Senior Administrative Officer,

¶13

5^th Floor, CMDA Tower I,

¶14

1, Gandhi Irwin Road, Egmore, Chennai – 600 008.

¶15

D. Bavani, D/o. Duraikannu, No.25, Nirmala Nagar, Chetpet, Tiruvannamalai District – 632 301.

¶16

…Respondents

¶17

Counsel for Appellant : M/s. T.K.S. Gandhi Counsel for R1 : M/s. S. Pandurangan

RA (SA) 9/2014

ORDER

This Appeal is against Order dated 20.01.2012 in SA 245/2009 on the file of DRT-I, Chennai.

¶22

Brief facts leading to this Appeal are as follows:-

¶23

Appellant herein filed above referred Securitisation Application challenging measures of 1^st Respondent Institution contending that Authorized Officer of 1^st Respondent Institution has not followed the provisions of SARFAESI Act, 2002, and it not followed Rule 8(1) of Security Interest (Enforcement) Rules, 2002 (in short Rules) as Possession Notice was not at all delivered to Appellant. It is contended Possession Notice was not published in vernacular language and in English as required under the Rules, 2002, therefore, measures initiated by Authorized Officer of 1^st Respondent are to be set aside.

¶24

¶25

RA (SA) 9/2014

¶26

First Respondent Institution opposed the Application and filed a Counter contending that loan account of Appellant herein was classified as Non-Performing Asset (NPA) on 30.11.2007, and thereafter, Demand Notice under Section 13(2) of SARFAESI Act, 2002, was issued on 04.02.2008, which Appellant received on 07.02.2008, and not raised any objection to Demand Notice. It is further contended that as Appellant and Respondent No.2 failed to repay the amount as demanded in Demand Notice dated 04.02.2008, Authorized Officer of 1^st Respondent Institution issued Possession Notice dated 19.10.2009 under Section 13(4) of SARFAESI Act, 2002, which was duly served on Appellant and copy of the same was affixed on secured asset. First Respondent Institution also contended that Possession Notice was duly published in two newspapers namely in vernacular ‘Dinamani’ and in English daily ‘Indian Express’, and as Appellant failed to clear the dues, measures taken by Authorized Officer of 1^st Respondent Institution are purely in accordance with provisions of SARFAESI Act, 2002, and objections raised by Appellant are not tenable.

¶27

¶28

RA (SA) 9/2014

¶29

Considering the contentions and rival contentions of both

¶30

parties, Tribunal below upheld the objections of 1^st Respondent Institution, and dismissed Securitisation Application filed by Appellant herein; aggrieved by which present Appeal is preferred.

¶31

3. Appellant and 1^st Respondent Institution filed Written

¶32

Arguments and the same are reiterated at the time of oral submissions.

¶33

4. Advocate for Appellant submitted that Tribunal below

¶34

failed to appreciate that there are discrepancies in respect of Schedule property in Demand Notice given under Section 13(2) of SARFAESI Act, 2002, and also in Possession Notice issued under Section 13(4) of SARFAESI Act, 2002. He further submitted that Tribunal below failed to notice that Possession Notice dated 19.10.2009 is not personally served on Appellant thereby provisions of SARFAESI Act and Rules made there under are not complied with. It is further submitted that

¶35

¶36

RA (SA) 9/2014

¶37

value of Schedule property is around Rs.30 Lakhs and 1^st Respondent is intended to sell the same at a price less than Rs.15 Lakhs, only with a view to make personal gain to 1^st Respondent Institution. It is further submitted Securitisation Application is filed against high handed illegal act of 1^st Respondent Institution and such action has to be set aside.

¶38

On the other hand, Advocate for 1^st Respondent Institution submitted that Authorized Officer of 1^st Respondent Institution issued Possession Notice under Section 13(4) of SARFAESI Act, 2002, on 19.10.2009, which was duly served on Appellant, being owner of secured asset. Learned Advocate for 1^st Respondent Institution further submitted that copy of Possession Notice was also affixed on Schedule property, and later it was published in two leading newspapers on 26.10.2009, one in vernacular ‘Dinamani’ and another in English daily ‘Indian Express’. It is submitted that Authorized Officer of 1^st Respondent Institution strictly followed the provisions of SARFAESI Act and Rules made there under, and

¶39

¶40

RA (SA) 9/2014

¶41

Tribunal below rightly dismissed Securitisation Application and that there are no grounds to interfere with the Order of Tribunal below.

¶42

It is the specific case of Appellant that Possession Notice dated 19.10.2009 was not served on him and Possession Notice was not published in two leading newspapers as required under Rules, 2002. Very same objection is raised before Tribunal below and Learned Presiding Officer, on examination of material placed before him, found that Possession Notice dated 19.10.2009 was served in person to brother of Appellant and it is also affixed on conspicuous part of property in presence of a Notary Public as Appellant was not available at the time of taking possession. As per Rule 8 (1) of Rules, 2002, Authorized Officer of 1^st Respondent Institution shall deliver Possession Notice prepared in Appendix IV to the Rules, 2002, to borrower and by affixing Possession Notice on outer door or at such a conspicuous place of property. It is clear from record that at the time of taking possession of property Appellant was not available, but his brother received said Possession Notice

¶43

¶44

RA (SA) 9/2014

¶45

on behalf of Appellant, and Possession Notice was also affixed on a conspicuous place of property, therefore, objection of Appellant that Authorized Officer of 1^st Respondent Institution did not follow Rule 8(1) of Rules, 2002, has no force, and Tribunal below rightly discarded it.

¶46

Second objection of Appellant is that Possession Notice is not published in two leading newspapers as required under Rule 8 (2) of Rules, 2002. For this, 1^st Respondent Institution produced material showing that Possession Notice is published one in vernacular paper in ‘Dinamani’ and another in English paper ‘Indian Express’ on 26.10.2009. As per Rule 8 (2) of Rules, 2002, Possession Notice has to be published in two leading newspapers, out of which one is to be in vernacular language within 7 days from date of taking possession. It is clear from Possession Notice that possession is taken on 19.10.2009 and publication was made on 26.10.2009, which is clear compliance of Rule 8(2) of Rules, 2002, which fact is

¶47

¶48

RA (SA) 9/2014

¶49

recorded by Tribunal below in its Order. Therefore, objection of Appellant on this score is also not tenable.

¶50

One of the arguments advanced on behalf of Appellant is that Authorized Officer of 1^st Respondent Institution hurriedly issued Notice to sell away the secured asset for a meager price, and on that ground also, measures initiated by Authorized Officer of 1^st Respondent Institution have to be set aside. This very same argument was also advanced before Tribunal below. It is not in dispute that Demand Notice issued under Section 13(2) of SARFAESI Act, 2002 is dated 04.02.2008, according to which, Appellant shall discharge debt within 60 days from the date of that Notice. As per Section 13(2) of SARFAESI Act, 2002, if borrower failed to discharge liability within 60 days from the date of Notice, Secured Creditor is entitled to exercise one or any of the rights provided under Sub-section 4 of Section 13 of SARFAESI Act, 2002. So, after completion of 60^th day, Secured Creditor has a right to proceed further, i.e. to take possession of property. That 60 days has expired on

¶51

¶52

RA (SA) 9/2014

¶53

04.04.2008, so from 05.04.2008, Secured Creditor has right to proceed further. But, admittedly, possession was taken on 19.10.2009, which is nearly 18 months after expiry of 60 days period. So, contention of Appellant that Secured Creditor hurriedly took possession with an intention to sell away property for a lesser value, cannot be accepted, and Tribunal below rightly discarded this contention.

¶54

Even in Securitisation Application, it is pleaded that Appellant is willing to discharge the liability provided reasonable time is granted. But, as already referred to above, after issuance of Demand Notice under Section 13(2) of SARFAESI Act, 2002, Secured Creditor waited nearly for 18 months without taking any further steps, still, Appellant has not utilized that time and not paid a single pie towards discharge of liability.

¶55

As rightly pointed out by Learned Advocate for 1^st Respondent Institution, Authorized Officer of 1^st Respondent Institution strictly followed the provisions of SARFAESI Act and

¶56

¶57

RA (SA) 9/2014

¶58

Rules made there under, and contentions of Appellant as to non compliance of said provision, is not supported by any material, and Tribunal below rightly discarded objection of Appellant.

¶59

On a scrutiny of material, I am of the considered view that there are absolutely no grounds to interfere with Order of Tribunal below, which is a reasoned one.

¶60

For the above reasons, it is held that Appeal is liable to dismissed, and accordingly, Appeal RA (SA) 9/2014 is dismissed. Both parties shall bear their own costs. All pending IAs, if any, stand closed.

¶61

[Dictated to Athistamani, PS transcribed by her, corrected, signed and pronounced by me in open court, this 12^th of September, 2022]

¶62

¶63

RA (SA) 9/2014

¶64

Mr a Darwin v. Housing and Urban Development Corporation Ltd.

Case brief

What is this about?

What did the court decide?

Mr a Darwin v. Housing and Urban Development Corporation Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

All orders in this case

Similar cases

A.O.Kotak Mahindra Bank Ltd. versus Dr.Prathibha Sharan

Ashok Wood Works versus Indian Overseas Bank

Ashok Wood Works versus Indian Overseas Bank

South Indian Bank versus Mr K Saravanan

Smt M Subathra versus State Bank of India

Ao South Indian Bank versus K Saravanan Ors.