Dismissed

Smt Lalwati Devi v. Manibhawanam Home Finance India Pvt. Ltd.

DRT9 Nov 2023SA/147/2023

Case brief

AI extract

What is this about?

The applicant, a widow, sought to quash proceedings initiated by a Financial Institution under the SARFAESI Act for defaulting on a home loan. The DRT-II Delhi dismissed the Special Application, holding that partial interim payments do not recover NPA status and the Tribunal lacks jurisdiction to extend loan tenure. Consequently, the action to appoint a receiver was upheld.

What did the court decide?

The Special Application seeking quashing of SARFAESI proceedings and appointment of a Receiver was dismissed; property remains with the Financial Institution.

Smt Lalwati Devi versus Manibhawanam Home Finance India Pvt… — Banking and Recovery | DRT (2023)

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Debts Recovely Tribunal-Il, Delhi

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sA NO. 147 0F 2023

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SMT. LALWATI DEVI VS. MANIBHAWANAM^HOME FINANCE INDIA PVT.LTD.

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:..

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Reserved on: 26. L0.2023 Pronounced on: 09.1 L.2023

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Present Shri D.K. Sisodia, counsel for applicant. Shri Sriram Kamal, counsel^{for respondentFI.}

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This SA has been filed by the applicant^{against the} respondent bank under Section^{L7(L) of the SARFEASI} Act,2002 with the request that^{the action and measures} initiated by the respondent^{FI in respectof propefi bearing} no. RZ-77A, Ground floor^{(rear side portion), Gali no.13,} Khasra no. 501 min. situated^{at Tughlakabad Extension,New} Delhi-110019 be declared^{illegal and arbitrary and quash the} same along with IA no.¹³²³ 12023^{for condonation of delay} in flling the^{presentSA on the ground that the husband of} the applicant was^{expired on 28.01 .2023 and applicant was} busy with funeral and^{rituals of her husbandand she has no} source of income and^{due to this reason she was not able to} : file the SA within time.

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The brief facts of^{the SA are that the applicant and her} husband have availed a^{home loan facilityof Rs.15 Lacs from} the respondent FI on^28.02.20t9 @^{t8o/o p.a. for tBO} months. The executives^{of respondentFI have misguided the} applicant that insurance^{is mandatory as per NHB/RBI norms} and accordingly the^{same was paid by the applicantto the} Insurance company amounting^{to Rs.23,6121-.Thereafter} the husband of the^{applicant availed a top up loan of Rs.3} Lacs from the respondent^{FI on 28.04.2021.The applicant's} husband was eligible^{for the top up loan withoutany} documents but later^{on_Jhe respondentFI has taken the} ,,-1-;.'/

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documents of another^propefi documents as a^security purpose for the said top up loan. The applicant was regularly paying the EMI but due to Covid-19 there^{is default} in making repayment of the loan and applicant^{requested the} respondent FI to reduce the rate of interest^{and maximum} tenure but respondent FI did not^{considerthe requestof the} applicant and account of the^{applicant was declared NPA on} 10.04.2022 despite of the^fact that^{applicant paid all dues on} time. It is further submitted^{that due to harassmentand} threats the applicant's^{husband expired on 28.02.2023due} to mental stress. It is^{submittedthat the applicantis an old} Iady, illiterate and^patient of^{high BP and sugar etc. and} facing^problems as her^{husband'wasthe singleearner of the} family. It is further submitted^{that respondent FI has not} issued any notice under^{section 13(2) & 13(4) of the} SARFAESI Act to the^{appticant and misguided the Ld. CMM} Court and^got the order^{for appointmentof Court Receiver.} The applicant came to^{know about the aforesaid proceeding} through the respondent^{FI employeeSh. Anurag Jain that} the Court Receiver is^{going to take possessionof the} mortgaged^{propefi. The Ld. Receiver has not issued any} notice/information before^{taking the physicalpossession of} the subject^propefi. on^{27.03.2023, when the applicant} returns from her^{hometown after the rituals of 'her husband,} she found that the subject^{propefi has been iealed by the} Ld. Receiver. Hence,^{the applicant has filed the presentSA} praying therein to restrain the^{respondentFI from} proceeding further in respect of the^{subject property and} provide the insurance covered amount^{to the applicantand} release of both^{propefi ownership documents situated at} and Okhla Phase'l^{from the} Tughlakabad Extension respondent FI. q

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The respondent FI appeared and^{filed their objections} on the application. The respondent^{FI vehement[denied the} allegations of the applicant and^{submitted that at the request} of applicant and her deceased^{husband, the respondentFI} has sanctioned a financial facility to the^tune of^{Rs.15 Lacs} vide sanction letter dated 26.02.2019 and^{pursuant to which} toan agrbement was duly executed between^{the parties for} the^purpose, terms and conditions.^{Thereafter, applicant and} her deceased husband again approached^{the respondentFI} for top up loan and accordingly,^{respondent has sanctioned} the same vide sanction letter dad^{28.04.202t,pursuant to} which loan agreement was duly executed^betweenthe pafties for the purpose, terms and conditions. It is further submitted that in order to secure the^{interestof respondent,} applicant had mortgaged the subject^{propefi with the} respondent FI. It is further submitted that^{since beginning} the applicant has been irregular in making^{repayment.The} applicant has also been^granted moratorium^{relief for nine} months in accordance and adherence to the^{notificationand} guidelines issued by the Hon'ble Apex Couft. Thereafter, keeping in mind the Covid-19 and on humanitarian^ground, respondent has agreed to^provide a top up^loan of^{Rs.3 lacs} on 28.04.202L However, the applicant^{has failed to repayin} terms of the repayment schedule and the account^was classified as NPA on 10.04.2022. Respondent FI sent^a demand notice under Section 13(2) of th9 Act^dated 20.04.2022, which was duly serued upon the applicant, however, applicant failed to repay the dues. Thereafter, respondent FI approached the Ld. CMM, Distt. South^East, Delhi under Section 14 and got appointed the Receiver and the Ld. Receiver has issued a^{pre-possession} notice dated 24.02.2023 to the applicant and the said notice was duly affixed and^pasted onj!1-yalls^{of the secured asset on}

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15.03.2023. Thereafter respondent FI through the^Ld. Receiver has taken the^{physicalpossession} of^{the subject} propefi and accordingly issued notice under Section 13(4) dated 15.03.2023. Accordingly, it^has been^{prayed that the} SA of the applicant may be^rejected.

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The applicant has filed rejoinder to the^{reply of the} respondent FI reiterating the^{facts as mentioned in the SA.}

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Heard the Ld.^{Counselof applicant and Ld. Counselfor} respondent FI and also^{perusedthe file.}

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From the^perusal of^{the pleadingssubmitted by the} respective^parties and^{the arguments it is evident that the} applicant has admitted^{that the applicant has takena loan of} Rs.15 Lacs and has also^{taken top up loan of Rs.3 Lacs. It is} submitted that^rate of^{interest was} @^{t9o/op.a. The applicant} has also admitted that^{in the March,z}z}the applicant has} availed the moratorium^{providedby the Govt. of India. It is} submitted that the^{account of the applicant was declared as} NPA on 10.04.2022.^{The main contention of the applicantis} that the applicant has^{paid the EMI in the month of March,} May, September,^{December,2}Z2and Jaunary, 2023,} therefore, the account^{of the applicant cannot remain NPA. It} is submitted that after^{declaration of the account as NPA'the} respondent FI has^{received the monthly EMIs, therefore, the} account should be^{turnedto the standard accountand it shall} not remain NPA. It^{is submitted that there is no such principle} that once the account^{is NPA, the accountwill remain always} NPA. On the other^{hand, the Ld. counsel of the respondentFI} has admitted that the^{applicant has depositedthe EMI for the} month of March, May,^{September,Decembe r,2022 and} Jaunary, 2023 but^{has failed to pay the entire outstanding} and therefore, the^{account of the applicant remained NPA. It} is submitted that the^{account cannot be termed as standard}

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merely because some EMIs has been received by the respondent FI. There was outstanding which was not cleared by the applicant and therefore, the account ,could not be settled. From perusal of the record it is clear that the account was declared NPA on L0.04.2022. After that the'applicant has paid the EMIs for the month of March, Ma)r, September, December,2022 and Jaunary, 2023. It is clear that the applicant has not paid the entire dues and therefore, the account could not be turned into a standard account. once the account has become NpA, the entire over due has to be paid or request the banker to settle the account with oTS. In this matter, no ors has been received and has not been accepted by the respondent FI, therefore, by making future EMIs the account cannot be regular. The contention of the applicant that the respondent FI has accepted the EMIs for the month of March, May, September, December,2OlT and Jaunary, 2023 does not entitled her to claim that the account has become standard. Therefore, there is no iltegality in declaring the account as NPA and on this ground the respondent FI cannot be restrained from taking action under the SARFAESI Act.

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The Ld. counsel of the applicant has submitted that the respondent FI may be directed to enhance the tenure of the repayment so that the applicant may be able to clear the entire over due. If the applicant wants any extenslon of tenure of the repayment, the applicant may approach the respondent FI for the same. This Tribunal has no right to extend the tenure of repayment on its own. Therefore, on this ground the SA cannot be altowed. However, it is made clear that despite order of this Tribunal, the respondent FI is free to extend the tenure of the Ioan. The respondent FI may

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sympathetically consider the request of the applicant for extension of the tenure of the loan.

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On the basis of above discussion, the SA application of the applicant is liable to be dismissed.

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ORDER

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The present SA stands dismissed. File be consigned to

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,,-E:r--, -;N4S1n>--'^^{I ----}

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Date : 09. LL.2023

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(SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi

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This^judgement has been signed, dated and^pronounced in open court.

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gil vW-4 1r^I l{Z

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Date : 09.1t.2023

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(SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi

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Smt Lalwati Devi v. Manibhawanam Home Finance India Pvt. Ltd.

Case brief

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Smt Lalwati Devi v. Manibhawanam Home Finance India Pvt. Ltd.

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