Allowed

Eppalagudem Suvarna v. Edelweiss Housing Finance Limited

DRT15 Dec 2022SA/259/2022

Case brief

AI extract

What is this about?

This tribunal allowed a securitization application challenging the possession notice issued under the SARFAESI Act. It held that the respondents failed to prove affixture of the possession notice on the secured asset as mandated by statutory rules, despite having followed other procedural steps.

What did the court decide?

The securitization application was allowed by setting aside the possession notice dated 21.06.2022 issued under Section 13(4) of the SARFAESI Act, 2002.

Eppalagudem Suvarna versus Edelweiss Housing… — Contract and Commercial Disputes | DRT (2022)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDERABAD

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DATED THIS THE 15TH DAY OF DECEMBER,2022

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PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB. (Hons.), M.A. PRESIDING OFFICER

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Securitization Application No. 259 OF 2OZz

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Eppalagudem Suvarna W/o Eppalagudem Saibaba Chary Aged 52 years, R/o H.No.1-6-473 Indira Nagar, Near Ramalayam Chaitanyapuri, Saroor Nagar Hyderabad-500 060

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Eppalagudem Saibaba Chary W/o Balaiah

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Aged 56 yesars, R/o H.No. j.-6-473 Indira Nagar, Near Ramalayam Chaitanyapuri, Saroor Nagar Hyderabad-500 060

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Versus

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.......Applicants,

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The Authorized Officer

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M/s Edelweiss Housing Finance Ltd Registered Office :Tower 3, Wing ',B,, Kohinoor City Mall Kirol Road, Kurla (West), Mumbai-400070

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M/s Edelweiss Housing Finance Ltd Regional Office, 7 -7-24lRf/101 to 104 1't Floor, Roxana Towers, Block-B Greeland's Signal, Begumpet Hydera bad - 500016

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M/s Edelweiss Housing Finance Ltd 1't Floor, H.No.l4/2/1, Shop No.5 Sri Ram Nagar Colony, Peerzadiguda Ghatkesar Mandal, Ranga Reddy District

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, , . . . . .Respondents.

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N*-u

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sA 72812020

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Counsel^{for the APP|icants} Counsel^{for Res7ondents}

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: Mr. B. Sai^Prakash

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: Mr. Lanka^Jagannadham

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-:ORDER:-

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The Applicant^{filed the present SecuritisationApplication u/s'17} of the Securitization^{and Reconstruction of Financial Assets and} Enforcement^{of Securitylnterest Act, 2OO2 (hereinafter"the Act"} for short) to^{set asidethe measuresinitiated by the respondents} under of the^{Act includingproposede-auctionof application} schedule Property^{on 01.11.2022'}

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The brief^{facts of the case, as per application,are;-}

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(i) that the 1st applicant^{as borrowerand 2nd applicant as co-} borrower availed^{housing loan of Rs'12,00,000/- from the} respondents^{repayablein 1.44 equated monthly instalments} @Rs.18,555/-^{each whichincludes interest amount vide} sanction letter^{dated 25.09.2017. They were paying the} EMIs^promptly but^{there was default due to medical} expenditure spent on^{1'r applicantwho met with accident} and sustained^{head injury. Though respondents wereaware} of the condition^{of the applicants, withoutany sympathyand} without giving any opportunity^{to regularizethe account,} they classified the^{loan account as NPAon 04.01.2022. The} applicants received demand^{notice dated 16.03.2022 u/s} 13(2) of the Act from 1't respondent^{demanding an amount} of Rs.15,61,329.60^ps as on^{15.03.2022within 60 days'} Though the repayment term is 144 EMIs @Rs.18,555/-^per month, the demand notice shows as 197 EMIs @Rs.20,300/,.fl\i$/.;v'

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/f/ 'io'"

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sA 728/2020

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per month. The 3'd respondent refused to provide statement of account in this regard. The 1st applicant is a homemaker and 2nd applicant is a carpenter by profession. As they are not much educated, the applicants could not issue any reply to the demand notice. Without serving or affixing the possession notice, the respondents are claiming that they have taken symbolic possession on 21.06.2022. No prior notice u/r B(6) was issued and in fact, Rule g(6) notice and sale notice have been issued on same day i.e., 16.09.2022. The sale notice has neither been affixed on secured asset nor served on the applicants. The sale notice was published on the same of its issuance i.€., 16.0g.2022. The respondents ought to have served the sale notice on applicants and affix on secured asset and then go for publication. The sale notice was published in ,Nava Telangana' and 'Business Standard, which have marginal circulation and 'Business Standard, is only a financial newspaper.

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(ii) The property is worth more than a crore whereas the reserve price has been kept at 1/3,d of its value i.e., Rs,33,31,488/_. Different persons signed demand notice and Rule 8(6) notice and the sale notice is unsigned one. The applicant are ready to pay the overdue amount within six months and regularize the account.

ffi,-

Hence this SA.

sA 77812020

The^{respondents adoptedthe counter filed in IA No'1169/2022 as} reply statement'^{The submissions' in brief' are that;-the} applicants^{createdsecurity interest over the applicationschedule} property in^{respectof the housingloan' As the applicantsfailed} to pay^{EMIS continuouslyfor three months' the loan account} became^{NPA as per RBI guidelines'The applicants returned the} demand^{notice dated 16'03'2022 and therefore'the respondents} had to^{publishthe same in two newspapersone'NavaTelangana'} Telugu newspaper^{and another 'BusinessStandard'English} newspaper.^{The applicantsneither made any payment nor raised} any objections^{under Sec'13(3A) of the Act' Thereafter' the} respondents^{issued possession notice dated21'06'2022'sent the} same to the^{applicants by registeredpost' affixed on secured} asset besides^{publishingin 'Nava Telangana' and'Business} Standard'^{newspapers on 23'06'2022' The sale notice dated} 16.09.2022^{fixing e-auctionon Ol'll'2022was sent to the} applicants,^{affixed on mortgaged propertyand publishedin two} newspapers.^{The respondentsfollowed the procedurelaid down} under the^{provisionsof the Act' 2002 and Rules framed} thereunder^{while enforcing the security interest' The auction} scheduledon0l'll.2022whichisunderchallengeinthisSAdid not materialize.^{The SA is liable to be dismissed'}

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The applicants^{filed rejoinder statingthat the respondents failed} to explain the^{reason for change in number of EMIsand} instalment amount,^{As per respondentsthe loan accountbecame} NPAon04.ot,2022whichmeansthattheEMlswerepaidtillthat date. The^{respondents also failed to explain how the outstanding} has been calculated.^{No photograph has been^filed as proof of} /fiwry,2^.yu

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(-!/^n\b '

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sA 1.28/2020

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aFfixture of possession notice. simirarry no proof has been fired in respect of affixture of Rule B(6) notice and sale notice. The initials appearing on the postal acknowledgements are not that of applicants. None of the contentions has been answered by the respondents. Hence, SA may be allowed.

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Heard learned counsels appearing for the applicants and respondents.^perused the material documents brought on record.

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The learned counsel for the applicants while reiterating the averments of the application, emphasises on his contentions that the respondents faired to produce proof of affixture of possession notice and sale notice on the secured asset; that the sale notice was issued and published in the same date i,e., on L6.0g.2022, the reserve price was kept very low. Learned counsel further submits that the reason for increase in number of instalments and instalment amount has not been explained. With these submissions, learned counsel sought for quashing the measures initiated by the respondents.

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The learned counsel for the respondents submits that since the auction did not materialize on 01.11.2022 the SA has become redundant. He further submits that the respondents however followed the provisions of the SARFAESI Act and Rules framed thereunder while proceeding against the secured asset and therefore, the SA is liable to be dismissed.

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B. The applicants are not disputing availment of the loan facilities and the mortgage. Their contention is that the respondents vide annexure to the demand notice dated 16.03.2022 informed the

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6fu^*

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sA 1.2812020

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number of^{instalments as 197 and instalmentamount as} Rs.20,300/-^{against the sanctionterms of I44 and Rs'18'555/-} respectively. I^{have perused the sanction letter and demand} notice and^{the contentionis foundto be genuine' As admitted by} the applicants,^{they did not raise any objection to the demand} notice u/s^{13(3A)of the Act, 2002' However,in my considered} opinion, the^{applicants deserve an answer in this regard'}

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The applicants^{receivedthe demand notice and possession} notice. Both the^{notices were published. The respondentsplaced} on record relevant^{material papers as proof' However' the} respondents have^{not placed on record proof of affixtureof} possession notice dated^{2L.06.2022on the secured asset which} is mandatory under^{Rule B(1) of the Rules,2002' ll is evident} that the respondent^{failed to affix the possessionnotice on the} outer door or at^{such conspicuousplace of the propertyas} mandated under^{Rule 8(1) of the Rules, 2002'}

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According to the^{respondents,auction did not take place on} Ol.tt.2022^{pursuant to sale notice dated 16'09'2022'Hence,} compliance of Rules^{B(5), 8(6) and 9(1) of the Rules with regard} to valuation, service,^{affixture,publication of the notices under} the corresponding^{Rules need not be examined as the salenotice} has become infructuous.

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In view of the^{foregoingdiscussion,} the SA deserves to be allowed by setting aside^{the possession} notice dated 21.06.2022 issued under Sec.13(4) of^{the Act, 2002.} /fu.v"u

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sA 728/2020

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Point No.(ii):

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12' In the result, sA is ailowed by setting aside the possession notice dated 21.06.2022 issued by the respondents under Sec. 13(4) of the Act, 2002.

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However, this order does not preclude the respondents from initiating the measures afresh to proceed against the SA schedule property strictly in accordance with the provisions of the SARFAESI Act, 2002 and Rures framed thereunder for rearization of its dues.

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Communicate a copy of this order to the parties concerned,

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(Dictoted to the pS, tronscribed by him, corrected, signed ond pronounced by me in the open court on this the 75th doy of December, 2022.).

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K''-"

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PRESIDING OFFICER

Eppalagudem Suvarna v. Edelweiss Housing Finance Limited

Case brief

What is this about?

What did the court decide?

Eppalagudem Suvarna v. Edelweiss Housing Finance Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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