Dismissed

Chander Bhan and Another v. Punjab National Bank

DRT9 Sept 2022SA/164/2022

Case brief

AI extract

What is this about?

The Single Appellate Court dismissed the Special Application filed by borrowers and legal heirs challenging the bank's sale notice under the SARFAESI Act, ruling that the request became infructuous after the challenged sale lapsed and a fresh notice was issued, without allowing new contentions.

What did the court decide?

The Special Application was dismissed with costs due to it becoming infructuous and lack of merit.

Chander Bhan and Another versus Punjab National Bank — Banking and Recovery | DRT (2022)

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DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH

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PRESIDED OVER BY M.M. DHONCHAK

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DATED THE 9^th DAY OF SEPTEMBER, 2022

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SA/164/2022 CHANDER BHAN AND ANOTHER VS. PUNJAB NATIONAL BANK

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Chander Bhan s/o Sh Shyam Lal R/o House No 662, Near Balbir Kiryana Store, Mahabir Colony, Hissar

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Late. Naveen Kumar s/o Sh Chander Bhan through his legal heirs

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(i) Smt Suman w/o late Naveen Kumar s/o Chander Bhan R/o House No 662, Near Balbir Kiryana Store, Mahabir Colony, Hissar

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(ii) Vaishnavai Minor d/o late Naveen Kumar through natural

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guardian/mother Smt. Suman w/o late Naveen Kumar R/o House No 662, Near Balbir Kiryana Store, Mahabir Colony, Hissar

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(iii) Kartik Minor s/o late Naveen Kumar through natural guardian/mother Smt. Suman w/o late Naveen Kumar R/o House No 662, Near Balbir Kiryana Store, Mahabir Colony, Hissar

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(iv) Baby w/o Chander Bhan s/o Sh Shyam Lal R/o House No 662, Near Balbir Kiryana Store, Mahabir Colony, Hissar

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…Applicant

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Versus

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AUTHORIZED OFFICER, Punjab National Bank, Branch Office HUDA sector 13 Hissar, and also at Circle SASTRA Centre, Circle office, ITI Chowk, Toshan Hissar - 125001

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…Respondent

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Argued by: Sh. Akshaydeep Singh, counsel for the SA applicant Sh. Ankit Kaushal, counsel for the respondent bank

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ORDER

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This SA has been instituted under Section 17 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (hereinafter referred to as ‘the Act’ for brevity).

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SA/164/2022 CHANDER BHAN AND ANOTHER VS. PUNJAB NATIONAL BANK

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In brief, it is the case of the applicants that the respondent bank had issued sale notice dated 28.06.2022 for sale of the residential House No.4, situated at Mahabir Colony, Hissar, in the name of Sh. Chander Bhan (applicant No.1); that Securitisation measures are illegal and arbitrary; that applicant No.1 is a guarantor and applicant No.2(i) to (iv) are legal heirs of deceased Sh. Naresh Kumar [Naveen Kumar] who had availed of the said loan; that notice of possession of property was served upon applicant Nos.2(i) to (iv) and thus, entire action of respondent bank was bad in the eyes of the law; that notice of possession was not affixed at the site of the property; that notice of possession was not published in the newspaper; that notice of sale was not served upon the applicants and it was also not affixed at the site of the property; that notice of sale also not published in the newspaper; that Sh. Naveen Kumar died on 04.11.2020 and the respondent bank being well aware of death of Sh. Naveen Kumar had intentionally issued the sale notice in the newspaper mentioning the name of Sh. Naveen Kumar; that no 30 days’ notice of the sale was served upon the applicants; that sale notice on 28.06.2022 was issued for sale of the property on 13.07.2022 which was for less than 30 days; that legal heirs of Sh. Naveen Kumar were not impleaded despite knowledge and notice of possession was not served upon the applicants.

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Reply to the SA was filed. It was contended in the reply that applicant No.1 (Sh. Chander Bhan) was a co-borrower and applicant No.2 being deceased was represented through his LRs; that the mortgaged property sought to be sold was in the name of applicant No.1 and thus, mention of applicant No.2 was unwarranted; that objections were general in nature and not substantial; that date of sale was 13.09.2022 which was not assailed and thus, the present SA had become infructuous because the SA was directed against sale notice dated 28.06.2022 and as no sale was confirmed in respect of the sale notice dated 28.06.2022, notice dated 01.06.2021, was served with regard to classification of the account as NPA; that demand notice dated 10.06.2021, was served upon the applicants; that mortgaged property was not in the name of applicant No.2; that notice of possession dated 14.09.2021, was served jointly upon the applicants; that initial notice was published on 03.10.2021; that fresh notice dated 20.08.2022, was published vide publication dated 20.08.2022; that first sale notice dated 30.04.2022, was issued for auction fixed for 31.05.2022; that publication was also issued; that there was 30 days time between date of publication and date of auction; that sale notice dated 28.06.2022 was issued

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SA/164/2022 CHANDER BHAN AND ANOTHER VS. PUNJAB NATIONAL BANK 3

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and it being the second sale, a notice of 15 days was not in violation of law; that fresh sale notice dated 26.08.2022 which was not challenged, was issued. Rest of the averments made in the SA, were also denied in the reply to the SA. Rejoinder was filed wherein the averments made in the SA were reiterated and that of the reply to the SA were controverted.

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I have heard learned counsel for the parties and gone through the record carefully.

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It was argued by the learned counsel for the applicants that the proceedings under the Act were against a dead person namely; Sh. Naveen Kumar s/o Sh. Chander Bhan, i.e., applicant No.1, notwithstanding the fact that the said person had died on 04.11.2020. It was further argued that in the name of the dead person, notice under Section 13(2) of the Act was issued.

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On the other hand, Sh. Ankit Kaushal, Advocate for the respondent bank argued that there was no intimation with the respondent bank about the death of deceased-Sh. Naveen Kumar. It was argued by Sh. Akshaydeep Singh, Advocate that Annexure-A2 of the SA falsified the above said argument of the counsel for the respondent bank.

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Admittedly, the mortgaged property is in the name of applicant No.1 only. Therefore, there is hardly any occasion for all the LRs of Naveen Kumar to approach this Tribunal and thus, Naveen Kumar being deceased, is of no consequence for the success of this SA.

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The SA in question is directed against sale notice dated 28.06.2022 and after that sale not taking place and the fresh sale notice being issued, which has not been challenged by the SA applicant, the SA so filed, has become infructuous.

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The argument of the learned counsel for the SA applicant that IA No.1169 of 2022 was filed for stay of the proceedings is of no consequence. Filing an IA in itself does not provide an opportunity to amend the SA unilaterally. Therefore, the filing of the above said IA cannot come in the way of the SA becoming infructuous.

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Counsel for the respondent bank argued that symbolic possession of the property was already taken. There is no merit in the argument of the learned counsel for the applicant that the notice was not served upon applicant Nos. 2(i) to (iv) because the property of the said applicants was not to be taken possession of or sold. As far as the theory of possession notice etc. is concerned, with regard to the limitation of the SA there is mention only about possession notice dated 28.06.2022 and thus, SA applicant cannot be allowed to challenge everything, especially the possession notice dated 14.09.2021,

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SA/164/2022 CHANDER BHAN AND ANOTHER VS. PUNJAB NATIONAL BANK 4

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the challenge to which is even otherwise, barred by limitation. Taking the SA from another angle, para Nos. 5(vi) and (vii) are quoted below:

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“(vi) That it is necessary to mention here that no notice of possession was properly served upon the appellants No. 2(i) to iv thus entire action of the bank is bad in the eyes of the law.

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(vii) That notice of possession was not affixed at the site of the property as per settled procedure of the law thus, entire action of the bank is bad in the eyes of the law.”

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From the above pleadings, it is clear that notice of possession to applicant who is owner of the property in question, has been admitted. 8. No other point was urged before this Tribunal.

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Hon’ble Supreme Court of India, in the case of M/s L&T Housing Finance Limited Vs. M/s Trishul Developers and Another, in Civil Appeal No.3413 of 2020 (arising out of SLP (C) No.18360 of 2019), held that the proceedings under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, cannot be held to be bad in law merely on raising a trivial objection which has no legs to stand unless the person is able to show any substantial prejudice being caused on account of procedural lapse as prescribed under the Act or the Rules framed thereunder still with a caveat that it always depends upon the facts of each case to decipher the nature of the procedural lapse being complained of and the resultant prejudice, if any, being caused and there cannot be a straitjacket formula which can be uniformly followed in all the transactions.

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In view of the above discussions, there is no merit in the SA and even otherwise the SA has become infructuous. Consequently, the same is dismissed with costs.

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Announced in the open Tribunal

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(M.M.Dhonchak) Presiding Officer DRT-2, Chandigarh

Chander Bhan and Another v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Chander Bhan and Another v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

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