Dismissed

Lucy Sebastian v. PNB Housing Finance Ltd.

DRT27 Oct 2023SA/27/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application seeking to set aside a possession notice affixed by PNB Housing Finance Ltd. The Tribunal held that procedural defects in an earlier notice were rectified by issuing a fresh notice with proper service and publication, finding no infirmity in the latter proceedings.

What did the court decide?

The Securitization Application No. 27 of 2023 stands dismissed. No costs awarded.

Lucy Sebastian versus PNB Housing Finance Ltd. — Company and Corporate | DRT (2023)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 27^th DAY OF OCTOBER, 2023

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PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

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S.A No. 27 of 2023

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Between

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Lucy Sebastian, Irumbanath House, Valummel Road,

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Valummel Junction, Thoppumpady,

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Ernakulam – 682 005.

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Susan Phelsi, Irumbanath House, Valummel Road, Valummel Junction, Thoppumpady,

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Ernakulam – 682 005.

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--- Applicants

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And

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PNB HOUSING FINANCE LTD. Regd Office, 9^th Floor, Antriksh Bhavan, 22, Kasturba Gandhi Marg, New Delhi – 110 001, Represented by its Managing Director.

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The Authorised Officer, PNB HOUSING FINANCE LTD. Regd Office, 9^th Floor, Antriksh Bhavan, 22, Kasturba Gandhi Marg, New Delhi – 110 001.

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--- Defendants

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SA No.27 of 2023

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This Securitization Application coming on 27.09.2023 for final hearing before me in the presence of Mr. Sunil Kumar S., Advocate for the Applicants and Mr. Nelson Joseph, Advocate for the defendants and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

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O R D E R

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This Securitisation Application was filed on 25.07.2022 seeking to call for the records leading to possession notice dated 8.6.2022 affixed and to set aside the said affixed possession notice dated 8.6.2022 and to pass any other order as deems fit by this Hon'ble Tribunal in the facts and circumstances of the case.

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The averments of the applicants in the SA in brief are as follows:

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Alleging to have the applicant availed loan without specifying the amount availed, and without furnishing the requisite details about loan and particulars of loan documents, the defendant Bank issued 13(2) notice dated 26.10.2021 under Section 13(2) of SARFAESI Act, demanding a sum of Rs.26,43,532.34 to be paid within 60 days. The true copy of the 13(2) notice dated 26.10.2021 is produced as Annexure-I. Thereafter the defendant bank affixed possession notice dated 08.06.2022 on the premises without issuing the same to the applicants. The true copy of the possession notice dated 08.06.2022 affixed is produced as Annexure-2.

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The amount claimed in the 13(2) notice is not legally recoverable debt as the amount is not due to the Bank. The account of the applicant was not liable to be declared NPA. The account of the applicants was not declared as NPA in accordance with law. The 13(2) notice is defective as it was issued not in accordance with the SARFAESI Act and Rules. Therefore it is unenforceable. The property mentioned in 13(2) notice and possession notice are not identifiable. The alleged possession notice dated 08.06.2022 affixed was not delivered to the applicants and it was not published in the newspaper in accordance with the SARFAESI Act and Rules.

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The defendant came on record and filed Written Statement interalia contending as follows :

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The applicant approached the respondents for a Housing Loan/ Credit Facility. The respondents sanctioned the loan amount of Rs.22,04,520/-. As a collateral to the loan, the applicants have mortgaged property lying in Sy. No.1837/2-10 in Rameswaram village,

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Page 2 of 6

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SA No.27 of 2023

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Kochi Taluk, Ernakulam district and deposited title documents of the same.

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The applicants failed to pay the loan periodically and on 31.12.2021 the loan account was declared as Non-Performing Asset (NPA) as per the directives and guidelines relating to asset classification issued by the Reserve Bank of India and National Housing Bank.

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The total outstanding loan amount inclusive of interest and all other charges from date on which the account turned NPA (31.12.2021) is Rs.26,43,532.34. On 26.10.2021 demand notice as per Section 13(2) of the SARFAESI Act was issued to the applicants. The same was published in Janmabhoomi and Financial Express on 12.03.2022 and 14.03.2022 respectively.

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Possession notice was affixed in the mortgaged property on 08.06.2022. But the defendants failed to publish the same in newspapers. So on 10.12.2022 a fresh possession notice was affixed in the mortgaged property and the same was sent to the applicants via post and was also published in newspapers Janmabhumi and Financial Express on 16.12.2022. A true copy of the possession notice dated 10.12.2022 is produced as Annexure-B1. True copies of the postal receipts and acknowledgment cards (to both Lucy and Susan) showing the issuance and receipt of possession notice to the applicants is produced as Annexure-B2(a) and (b). True copy of the photographs taken at the time of affixture of possession notice is produced as Annexure-B3. True copy of paper publication made in the Financial Express and Janmabhumi are produced as Annexure-B4(a) and (b).

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Ground-1 of the S.A. is denied as the amount due is recoverable. Grounds-2 and 3 are absolutely baseless and hence denied. The ground that 13(2) notice is defective is frivolous. Demand notice was issued to the applicants on 26.10.2021 which was after the loan account was classified NPA. It is true that the possession notice dated 08.06.2022 was not delivered to the applicants. Since the defendants failed to issue the possession notice and to publish the same in newspapers after it was affixed in the mortgage property, a fresh possession notice was affixed on the mortgaged property on 10.12.2022 and the same was published and delivered to the applicants. The symbolic possession of the mortgaged property was taken as per the newly affixed possession notice and not as per the old possession notice dated 08.06.2021. The Hon'ble Tribunal may be pleased to dismiss the above S.A. filed by the applicants with exemplary costs.

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Page 3 of 6

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SA No.27 of 2023

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The point arising for consideration is as to whether the applicants are entitled to get the reliefs sought for in this S.A.

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Point: It is revealed from the averments of the written statement filed by the defendants that the applicants availed credit facility to the tune of Rs.22,04,520/- from the 1^st defendant finance Company upon creation of security interest over their property situated in Sy. No.1837/2-10 in Rameswaram village, Kochi Taluk, Ernakulam district by deposit of title deeds in favour of the 1^st defendant Finance Company and that since they committed default in repayment of the outstanding loan due, the loan account was declared as Non-Performing Asset on 31.12.2021.

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Demand notice, Annexure-A1 was served to the applicants calling upon them to repay the outstanding loan due within the period of 60 days from the date of receipt of the notice. It cannot be disputed that the applicants neither sent any objection/representation to the demand notice nor did they respond to the terms of the demand notice.

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Hence, the 2^nd defendant issued possession notice dated 08.06.2022, Annexure-A2. The averment of the applicant that the above possession notice was not served to him is admitted by the defendants in the written statement. However, the defendants have averred in their written statement that since they failed to issue the possession notice to the applicants and to publish the same in newspapers, a fresh possession notice dated 10.12.2022, AnnexureB1 was issued to the applicants and that it was also published in newspapers. Annexure-B2(a) and B2(b), copies of postal receipts and acknowledgment cards shows that possession notice, Annexure-B1 was served to both the applicants. Annexure-B4(a) and B4(b) shows that possession notice Annexure-B1 was published in newspapers. Hence, the contention of the applicants in the SA that possession notice was not served to them is untrue.

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The main contention raised by the applicants in the SA is that the symbolic possession of the mortgaged property was taken as per the newly affixed possession notice and not as per the old possession notice dated 08.06.2021. Fresh possession notice Annexure-B1 was issued and it was published in news papers and it was affixed on the conspicuous part of the secured asset, since the earlier possession notice 08.06.2021 was neither issued to the applicants nor was it published in the newspapers. Therefore, the issuance of possession notice dated 08.06.2021 is not in compliance with Rule 8(1) and (2) of the SARFAESI Act, 2002 , that is why the defendants issued fresh possession notice, Annexure-B1 by complying with the provisions of the Rule 8(1) and (2) of the SARFAESI Act, 2002. Hence this Tribunal

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Page 4 of 6

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SA No.27 of 2023

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does not find any infirmity or procedural irregularity in respect of issuance of possession notice dated 10.12.2022, Annexure-B1.

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In view of the foregoing reasons, this Tribunal holds that the applicants are not entitled to get the reliefs sought for in this SA. In the result, S.A No.27 of 2023 stands dismissed. No costs.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 27^th day of October, 2023.

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/

Page 5 of 6

SA No.27 of 2023

List of documents filed by the Applicants along with the S.A.

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Sl.	Date	Particulars
No.
1.	26.10.2021	Copy of 13(2)notice.	Annexure-A1
2.	08.06.2022	Copy of possession notice affixed.	Annexure-A2

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List of documents filed by the Defendants along with the Written Statement

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SL. No.	Date	Particulars
1.	10.12.2022	Copy ofpossession notice.	Annexure-B1
2.	16.12.2022	Copies ofpostal receipts	Annexure-B2(a)
	19.12.2022	Copies of Acknowledgment cards	Annexure-B2(b)
3.	10.12.2022	Copy ofphotograph	Annexure-B3
4.	16.12.2022	Copy of paper publication in Financial Express	Annexure-B4(a)
5.	16.12.2022	Copy of paper publication in Janmabhumi.	Annexure-B4(b)

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(Su. WILLYAHM) PRESIDING OFFICER

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Page 6 of 6

Lucy Sebastian v. PNB Housing Finance Ltd.

Case brief

What is this about?

What did the court decide?

Lucy Sebastian v. PNB Housing Finance Ltd.

Case brief

What is this about?

What did the court decide?

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