Dismissed

Paramjit Singh and Another v. Bank of Baroda

DRT16 Aug 2023SA/132/2022

Case brief

AI extract

What is this about?

In a secutirization application challenging a Section 13(4) possession notice, the Debt Recovery Tribunal rejected the applicants' plea that notices were illegal or NPA classification erroneous. The court held that defendants failed to make representation or deposit dues, and dismissed the application based on precedent requiring substantial prejudice for procedural lapses.

What did the court decide?

The Securitization Application and the interim stay IA were dismissed; the bank's recovery proceedings were allowed.

Paramjit Singh and Another versus Bank of Baroda — Company and Corporate | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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PRESIDED OVER: SH. MRIDULESH KUMAR SINGH

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SECURITIZATION APPLICATION NO.132/2022

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Date of Institution: 13.04.2022 Date of Decision: 16.08.2023

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Mr. Paramjit Singh S/o Sh. Ajit Singh, R/o Village- Haibatpur, POSultanpur Lodhi, Near Senior Secondary School, Tehsil- Sultanpur Lodhi, District Kapurthala, Punjab-144626

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Mrs. Navneet Kaur W/o Sh. Paramjit Singh, R/o Village- Haibatpur, POSultanpur Lodhi, Near Senior Secondary School, Tehsil Sultanpur Lodhi, District- Kapurthala, Punjab-144626

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--Applicants Versus 1. Authorized Officer, Bank of Baroda, Branch Office Char Batti Chowk, Sultanpur Road, Kapurthala, Punjab-144061 --Respondent Argued by: Sh. Harjaap Singh Arora, Advocate for Applicants Sh. K.P.S. Dhillon, Advocate for Respondent FINAL ORDER

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This Securitization Application was filed under Section 17 (1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’for brevity) for setting aside the notice under Section 13(4) dated 16.09.2021 of the Act and all actions taken by the respondent under the provisions of the Act.

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It is stated in the application that applicants obtained Housing Loan from respondent bank to the tune of Rs.25 lacs and residential property measuring 8 Marlascomprised in Khewat/ Khata No.96/166 Khasra No.18//18/1/2/0-1, 18/2/1/2/0-7 Hadbast No.30, situated at Village Haibatpur, PO Sultanpur Lodhi, Tehsil Sultanpur Lodhi, District Kapurthala, Punjab.

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It was further stated that loan amount was to be repaid in EMI of Rs.23,000/- per month; that the applicants were discharging their liability by paying the loan installments regularly till February 2021 but due to Corona-19 pandemic applicants could not keep their account regular and could not repay the loan installments regularly and the account of the applicants had been declared as Non-Performing Asset; that

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SA 132/2022 2

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notice under Section 13(4) of the Act was not issued as per the guidelines of the Reserve Bank of India or the guidelines/notification issued by the Hon’ble Supreme Court of India; that respondent did not served demand notice or possession notice as per law/proper procedure laid down in the Act; that notice under Section 13(4) of the Act was without all required details; that after the receipt of notice under Section 13(4) the applicants visited the office of respondent and many times requested to waive off the excessive charges and interest levied by them and intimate the correct amount so that the applicants may arrange money and deposit the same but till date respondent bank has not provided the actual balance amount; that applicants had requested to respondent to consider them for an OTS but respondent had not paid any heed to the requests; that officials of respondent have threatened to sell the house in question; that mortgaged property is the only residential house of the applicants and applicants are ready and willing to settle the loan account.

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Reply filed by respondent and it is stated that applicants are incorrigible defaulters; that applicants are totally misrepresenting before this Tribunal and making false statements; that this SA is bundle of lies and it is based on concocted story that in fact applicants No.1 and 2 had taken two loans of Rs.2,81,000/- and Rs.22,50,000/- for purchase and renovation of house from respondent bank on 25.07.2019 and 26.07.2019; that as per terms and conditions of the sanction letters dated 25.07.2019 and 26.07.2019 loan of Rs.2,81,000/was repayable with interest @8.90%p.a. with monthly rests in 180 EMI each amounting to Rs.2,833.40p per month and loan of Rs.22,50,000/- was repayable with interest @9.40%p.a. with monthly rest in 348 EMI each amounting to Rs.18,874.09p; that the property in question was duly mortgaged by the applicants with respondent bank and the same was given as a collateral security to secure the loans availed by the applicants; that accounts were classified as NPA on 25.03.2021as there were various defaults on the part of the applicants since the first month of installments which is clearly evident from the statement of account; that said classification of the account was as per the guidelines of the RBI and there is no illegality; that respondent bank in order to recover its dues from the applicants initiated SARFAESI action and issued demand notice under Section 13(2) of the Act on 03.04.2021 and the said notice was sent through registered post as per the provisions laid down in the Act; that the said demand notice was duly served upon the applicants and sufficient time of 60 days was

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SA 132/2022 3

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granted to them to repay the outstanding amount as indicted in the said notice; that after the expiry of 60 days time period the respondent bank issued possession notice dated 16.09.2021 under Section 13(4) of the Act and was served upon the applicants through registered post on 17.09.2021; that the said possession notice was also affixed on the premises in question and was published in the leading newspapers on 18.09.2021 as per the mandatory provisions of the Act; that copy of postal receipts dated 17.09.2021, photographs and paper publications are Annexed as Annexure R-2 to R4; that thereafter respondent bank obtained the orders under Section 14 of the Act for taking the physical possession of the mortgaged property; that there is no illegality or arbitrariness in the notices issued by the respondent bank and the said notices are not liable to be set aside; that present SA is devoid of merits and is liable to be dismissed; that applicants have not approached this Tribunal with clean hands hence they are not entitled to seek any relief; that present SA has been filed only to delay the proceedings initiated by the respondent bank under the Act for the recovery of the outstanding loan amount pending against the applicants; that the total outstanding against the applicants as on 31.03.2021 was Rs.25,84,927.09p and applicants failed to pay any single penny since 08.12.2021, thus it is requested to dismiss the SA.

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No rejoinder affidavit/replication was filed by applicants.

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

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Sh. Harjaap Singh Arora, Advocate has argued that applicantshave availed Housing Loan of Rs.25 lacs from respondent bank and the same was to be repaid in EMIs of Rs.23,000 per month and applicants were discharged their liability by paying loan installments regularly till February 2021.

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Per contra,Sh. K.P.S Dhillon, Advocate has argued that applicants have availed two Housing Loans one for Rs.2,81,000/-and second for Rs.22,50,000/i.e., total 25,31,000/- and EMI’s were one of Rs.2,833.40p and second is Rs.18,874.09p. It is was further argued that applicants had not adhered the terms and conditions of sanction letters and committed various defaults since the first month of installments.

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No replication/rejoinder to reply was filed by applicants to contradict the above facts which are stated in the reply also. Perusal of copy of statement of account shows that contention of applicants is incorrect that they have regularly paid installments of Housing Loan till February 2021.

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SA 132/2022 4

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Sh. Harjaap Singh Arora, Advocate further argued that account of applicants was wrongly classified as NPA and notices under Section 13(2) and 13(4) of the Act were not served as per procedure laid down in law.

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Per contra,Sh. K.P.S Dhillon, Advocate has argued that accounts of applicants were classified as NPA on 25.03.2021 in light of circulars issued by RBI from time to time, as there were various defaults on part of the applicants since the first month of installments.

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I have perused rules/circulars regarding classification of NPA filed along with IA No.679/2023 and found that there is no illegality/irregularity in classifying the accounts of applicants as NPA on 25.03.2021.

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Sh. Harjaap Singh Arora, Advocate has not explained as to how the accounts were wrongly classified as NPA.

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Sh. K.P.S Dhillon, Advocate has further argued that notice under Section 13(2) of the Act was issued on 03.04.2021 and were sent to applicants through registered post on 03.04.2021 as per the provisions laid down in the Act and the same were duly served upon the applicants and 60 days time was granted to them for repaying the outstanding amount indicted in the notice. Copy of notice along with receipts of registered post are Annexed with reply.

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Sh. Harjaap Singh Arora, Advocate has neither pleaded in the SA nor argued as to whether any representation was made by applicants under Section 13(3A) of the Act. This fact clearly shows that neither representation was made by applicants under Section 13(3A) of the Act nor they have deposited outstanding amount within 60 days after receiving of notice.

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Sh. K.P.S Dhillon, Advocate has argued that after the expiry of 60 days time respondent bank has issued possession notice dated 16.09.2021 under Section 13(4) of the Act and the same was served upon the applicants through registered post on 17.09.2021. Copy of notice along with copy of postal receipts are Annexed with reply. It was further argued that the said possession notice was affixed on the premises in question and was published in the leading newspapers on 18.09.2021. Concerned photographs of pasting along with copy of publication papers were also filed along with reply. No replication/rejoinder filed to this reply for contradicting the facts mentioned in the reply.

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Sh. Harjaap Singh Arora, Advocate has further argued that respondent bank is acting like the village sahukar but neither in the pleadings nor in the arguments he has explained as to why this allegation is made against the respondent bank.

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SA 132/2022 5

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No other point was urged by parties before this Tribunal. Perusal of record shows that applicants have filed this SA on 13.04.2022 halfheartedly just to make obstructions in the recovery proceedings initiated by respondent bank along with a copy of possession notice dated 16.09.2021.

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Perusal of copy of statement of account, which is Annexure R-8 is on record shows that applicants have defaulted in payment of installments from 30.07.2019 itself and they are regular defaulters.

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In the facts and circumstances above applicants have not made out any case in their favour. Respondent bank has initiated SARFAESI proceedings according to law and acts done by it i.e., service of notices were as per rules.

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Hon’ble Supreme of India in the case of ‘M/s L & T Housing Finance Ltd. Vs. M/s Trishul Developers and Another’, in Civil Appeal No. 3413/2020 (arising out of SLP (C) No. 18360/2019), 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 the procedural lapse as prescribed under the Act or the Rules framed thereunder.

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IA No. 374/2022 was filed during the pendency of this SA for restraining the respondents from taking the possession of secured asset. This prayer was included in the relief claimed in the SA.

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In the circumstances of the case, the SA fails and same is hereby dismissed. Resultantly IA No.374/2022 is also dismissed. Order be uploaded on the official website of this Tribunal and Record be consigned to the record room after due compliance.

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Dated: 16.08.2023

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(MRIDULESH KUMAR SINGH) Presiding Officer DRT-III, Chandigarh

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Order dictated, signed and pronounced by me in the open Tribunal. Dated: 16.08.2023

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(MRIDULESH KUMAR SINGH) Presiding Officer DRT-III, Chandigarh

Paramjit Singh and Another v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

Paramjit Singh and Another v. Bank of Baroda

Case brief

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What did the court decide?

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