Dismissed

Dr. Santosh Uttam Sawane and others v. Indostar Capital Finance Limited

DRT8 Mar 2023SA/100/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a securitisation application challenging the legality of a Section 13(2) notice under the SARFAESI Act. The Tribunal held the notice was sufficient, rejected claims of forged signatures and unauthorized interest rates, and found no illegality in the recovery measures.

What did the court decide?

Securitisation Application No.100/2022 is hereby dismissed with costs.

Dr. Santosh Uttam Sawane and others versus Indostar Capital… — Banking and Recovery | DRT (2023)

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Presented on: 16.03.2022 Registered on: 16.03.2022 Decided on: 08.03.2023 Duration: Y M D

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IN THE DEBTS RECOVERY TRIBUNAL AT PUNE (Before Shri Dilip G. Murumkar, Presiding Officer) SECURITISATION APPLICATION No.100/2022

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Dr. Santosh Uttam Sawane Age: 47 years, Occ: Profession R/at- Flat No.304, Siddhi Building, Kubera Sankul, Gadital, D.P. Road, Hadapsar, Pune – 411 028.

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Mrs. Monal Santosh Sawane, Age: 47 years, Occ: Profession R/at- Flat No.304, Siddhi Building, Kubera Sankul, Gadital, D.P. Road, Hadapsar, Pune – 411 028.

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M/s. Tanmay Nursing Home Prop. Santosh Uttam Sawane Age: 47 years, Occ: Profession Shop Nos.1,2,3 Sr. No.226, Siddhi Building, Gadital, Pune Solapur Road, Hadapsar, Pune – 411 028.

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…Applicants

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Versus

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IndoStar Capital Finance Ltd., Head Office – One World Center, 20^th Floor, Tower 2A, Jupiter Mills Compound, Senapati Bapat Marg, Mumbai, Mumbai City MH 400 013 and Having Office at : Office

(SA No.100/2022)

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No.1,2,&3 B Wing, 4^th Floor, Abhijit Court Building, Bhandarkar Road, Deccan Gymkhana, Pune – 411 004. 2. The Authorized Officer Mr. Santosh Shinde Age: 38 years, Occ: Service Having Office at : Office No.1,2,&3 B Wing, 4^th Floor, Abhijit Court Building, Bhandarkar Road, Deccan Gymkhana, Pune – 411 004.

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... Defendants

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APPEARANCES For the Applicants Mr. Nandkumar Bharati – Advocate For Defendant Nos.1 and 2 Mr. Prasad Kulkarni i/b Mr. Rishabh Malik - Advocate

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JUDGMENT

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(Delivered on 8^th March, 2023)

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The applicants by filing this application have claimed following reliefs:

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a) That this Tribunal be pleased to declare the Notice dated 24^th May, 2019 issued under Section 13(2) by the Defendant under SARFAESI Act is illegal, arbitrary, unreasonable and unjustified and the same be quashed and set aside by this Tribunal;

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b) That this Tribunal be pleased to declare the mortgaged created by Defendant Company in respect of suit

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properties is illegal and not according to law;

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c) The order passed by District Magistrate, Pune dated 26^th November, 2021 be quashed and cancelled.

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d) The Defendant be restrained by an order of injunction or such other type of order from taking any further measures pertaining to the said immovable properties until the final adjudication of the mortgage and liability.

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The averments made in the application can be summarized as under:

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The applicants have taken loan of Rs.1,92,00,000/- and Top Up Loan of Rs.30,00,000/-, total amounting to Rs.2,26,00,000/- from defendant No.1, IndoStar Capital Finance Limited (hereinafter referred to as `ICFL’) for running Nursing Home. The applicant No.1 is borrower, applicant No.2 is co-borrower and applicant No.3 is the Firm run by applicant No.1 as proprietor. The applicants paid installments regularly. However, due to financial difficulties and nonrecovery of outstanding from clients, the applicants sustained loss and therefore, became irregular in repayment of loan.

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The defendant No.1 ICFL served Demand Notice dated 24^th May, 2019 under Section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of

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Security Interest Act, 2002 (hereinafter referred to as ‘SARFAESI Act’) demanding Rs.1,78,31,551/- from the applicants. However, the said Demand Notice is defective as it is silent about details of calculation of principal and interest with all debits and credits and rate of interest applied and securities charged to defendant No.1 ICFL. Therefore, it is necessary to be quashed.

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Further, the defendant No.1 ICFL has created `Memorandum of Entry for Deposit of Title Deeds’. However, the same is not singed by the applicants. The defendant No.1 ICFL prepared false and forged documents in respect of the same for which the applicants have filed Police complaint. The applicants have also obtained report of Handwriting Expert which is in favour of the applicants. Thus, Memorandum of Entry for Deposit of Title Deeds are not binding upon the applicants.

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Further, the Authorised Officer of defendant No.1 ICFL in Point No.7 of Affidavit submitted to the District Magistrate for obtaining Order under Section 14 of the SARFAESI Act has mentioned that “there is no or wrongly objection representation in reply to the Notice has been received from non-applicant to the applicant bank”. In fact applicants by letter dated 13^th June, 2019 had raised objections/made

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representation to defendant No.1 ICFL in reply to Notice under Section 13(2) of the SARFAESI Act. The defendant No.1 ICFL has also replied to the said objection letter by letter dated 26^th June, 2019.

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Further, in the said Affidavit dated 16^th December, 2019 filed before District Magistrate by defendant No.1 ICFL, fact of deposit of Rs.10 Lakhs after receipt of Demand Notice under Section 13(2) of SARFAESI Act is concealed. Further, in the said Affidavit it is wrongfully mentioned at Point No.2 that “the applicants have availed loan from M/s. Deutsche Bank when the loan was granted by defendant No.1 ICFL”. So Affidavit filed before the District Magistrate is defective and therefore, Order of District Magistrate is required to be set aside and cancelled.

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Further, sanctioned rate of interest was 11.75% p.a. whereas defendant No.1 ICFL has charged interest @15.8% to one loan and @12.05% for another loan which is seen from Certificate of Tax Consultant of the applicants. The defendant No.1 has unauthorizedly taken possession of the suit properties.

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Hence, the applicants have claimed aforementioned reliefs.

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The defendant No.1 ICFL by filing Statement of Objections

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(Exhibit-6) resisted the application. It is denied that the applicants have deposited Rs.10 Lakhs after receipt of Demand Notice under Section 13(2) of the SARFAESI Act but they have deposited the said amount in the year 2021 when the OTS was granted in favour of the applicants. While admitting that there is typographical mistake regarding applicants having availed loan from M/s. Deutshe Bank, it is denied that in Point No.7 in the Affidavit submitted to District Magistrate it is wrongly mentioned that there is no objection/representation in reply to Notice has been received from the non-applicants (present applicants) to bank.

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It is contended that the grounds taken by the applicants are baseless and meritless. On the contrary, the measures taken by defendant No.1 ICFL are in consonance with the provisions of SARFAESI Act. Therefore, application may be dismissed.

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The applicants by filing Rejoinder (Exhibit-6A) to the Statement of Objections of defendant No.1 ICFL tried to expunge the contentions raised in the reply.

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The learned Advocate appearing for the applicant placed reliance on the following Authorities:

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(1) Madan Mohan Shrivastava Vs. Additional District Magistrate (South) Bhopal and others [W.P. No.5629/2021

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decided on 1^st April, 2021]

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(2) Kayalvizhi Vs. The Authorised Officer, Canara Bank Ltd., [W.P.(MD) No.29093 of 2022 and WMP(MD) No.23060 of 2022 decided on 9^th January, 2023]

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(3) Bhavdipbhai Arunbhai Dave Vs. Kotak Mahindra Bank Limited [R/Special Civil Application No.16428 of 2021 decided on 20^th January, 2022]

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(4) Devendra Surana Vs. Bank of Baroda and Ors. [W.P. No.5521(W) of 2017 decided on 12^th December, 2018]

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The learned Advocate appearing for defendant No.1 ICFL placed reliance on following Authorities:

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(1) Padamkumar Vs. State of U.P. [Criminal Appeal No.87 of 2020 (Arising out of SLP(Crl.) No.6990 of 2018 decided on 14^th January, 2020)]

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(2) Indian Bank Vs. M/s. Blue Jaggers Estates Ltd., and others [S.C./SLP© 4981-82 decided on 9^th August, 2010]

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(3) M/s. L&T Housing Finance Limited Vs. M/s. Trishul Developers and another [Civil Appeal No.(s) 3413 of 2020 (Arising out of SLP(C) No.(s) 18360 of 2019)]

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Heard all the parties. Perused the documents and Authorities cited by the parties.

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The learned Advocates appearing for both the parties

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reiterated facts mentioned in the application and Reply, respectively.

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The following points arise for my determination and I record my findings as under:

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(1) Whether the applicants are entitled for reliefs as claimed? (2) What order?

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Findings:

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Point No.1 – In the negative.

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Point No.2 – As per final order.

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REASONS

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As to Point Nos.1 and 2

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On cursory perusal of Demand Notice issued under Section 13(2) of the SARFAESI Act by defendant No.1 ICFL to the applicants, it appears that which amounts were sanctioned for two loans and amounts outstanding for the same and rate of interest with penal interest and description of mortgaged properties are elucidated. Thus, these details are sufficient to come to the notice of the applicants about loan details and their liability for repayment of loan. Therefore, I hold that the Demand Notice issued under Section 13(2) of the SARFAESI Act is not defective.

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According to applicants, they have deposited Rs.10 Lakhs after

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receipt of Demand Notice issued under Section 13(2) of the SARFAESI Act. However, this fact is concealed in Affidavit submitted to District Magistrate by defendant No.1 ICFL. According to defendant No.1 ICFL, the applicants have not deposited the said amount after receipt of Demand Notice but in the year 2021 when OTS was granted to the applicants.

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I have perused the Application and Affidavit dated 16^th December, 2019 submitted by defendant No.1 ICFL to District Magistrate. It appears that those documents were filed on 16^th December, 2019. The Demand Notice was issued on 24^th May, 2019. The Statement of Accounts produced by both the parties shows that the applicants have not deposited Rs.10 Lakhs as alleged by them between 24^th May, 2019 to 16^th December, 2019 i.e. before filing Application and Affidavit to District Magistrate but it was deposited on 12^th August, 2021. Therefore, I hold that this objection of the applicants is devoid of consideration.

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No doubt, in the Affidavit submitted to the District Magistrate it is mentioned that defendant No.1 ICFL has not received any reply/representation to Demand Notice from the applicants. However, much importance should not be given to the said fact as functions of District Magistrate are ministerial one and

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not adjudicatory one. Anyhow, it is admitted by both the parties that the applicants have sent letter of objection/representation to defendant No.1 ICFL after receipt of Demand Notice and defendant No.1 ICFL has given reply to those objections by letter. Therefore, non-mentioning of these facts in the Affidavit submitted to District Magistrate do not hamper the case of the defendant No.1 ICFL. Therefore, I find no force in this objection and it cannot be held that District Magistrate’s Order is defective.

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According to applicants, Memorandum of Entry of Deposit of Title Deeds have not been signed by applicant Nos.1 and 2 and their signatures are forged one and in that regard they have moved to Police as well as Criminal Court. However, cognizance of their complaint is yet to be taken either by Police or Criminal Court. Further, applicants have produced report of Handwriting Expert which is in their favour. However, disputed documents and specimen of signatures of applicants were not sent to Handwriting Expert either by this Tribunal or any Judicial Magistrate or Police. Therefore, the report of Handwriting Expert produced along with list (Exhibit-8) by the applicants which is procured by themselves is hard to digest. Therefore, I find no force in this objection also.

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According to applicants, defendant No.1 ICFL charged exorbitant rate of interest other than agreed. For that they relied upon Certificate of their Chartered Accountant. However, loan documents glaringly shows that defendant No.1 ICFL has claimed agreed rate of interest. Therefore, this objection is devoid of merits.

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Consequently, I hold that defendant No.1 ICFL have taken measures in consonance with the provisions of SARFAESI Act and I find no illegality therein. Therefore, grounds/objections raised in the application being devoid of merits are not conceivable. Therefore, application is liable for dismissal.

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Before parting with Judgment, with great regard, I mention that the Authorities cited supra by both the parties are not helpful to them as they turn on different points than facts of the case in hand.

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Hence , I pass the following order:

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ORDER

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Securitisation Application No.100/2022 is hereby dismissed with costs.

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Pronounced in open Court. Sd/-

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(Dilip G. Murumkar) Place : Pune Presiding Officer Date: 08.03.2023 Debts Recovery Tribunal, Pune

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(SA No.100/2022)