Dismissed

M S Rani v. Namdev Finvest Private Limited

DRT16 Oct 2023SA/313/2022

Case brief

AI extract

What is this about?

In this Securitization Application, the Debts Recovery Tribunal addressed objections raised regarding the service and publication of demand and possession notices under the SARFAESI Act. The court also examined an allegation regarding a reduced loan disbursement. The tribunal rejected the claims that the objection period began from the publication date in the newspaper and upheld the fi's actions

What the court decided

AI extract

M S Rani versus Namdev Finvest Private Limited — Civil Procedure and Limitation | DRT (2023)

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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DEBTS RECOVERY TRIBUNAL, JAIPUR PRESIDING OFFICER: SH. VIVEK SAXENA

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SA No.- 313/2022

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Ms. Rani w/o Mr. Mohammed Shakir, R/o 3139, above Shop no. 390,

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Chandpole Bazaar, Jaipur 302001.

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Mr. Mohammed Shakir S/o. Shri Abdul Aziz R/o. 3139, Above above

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Shop no. 390, Chandpole Bazaar, Jaipur 302001.

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.........Applicant

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Versus

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Namdev Finvest Private Limited, S1-S7-S8 2^nd Floor, Shreenath Plaza

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Neer Sagar Market, Ajmer Road, Bhandkrota Jaipur 302026.

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........Respondent FI

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Present:-

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Shri Ramnaresh Vijay, Counsel for the applicant

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Shri Pramod Kumar, Counsel for the Respondent Bank/FI

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(Final Order) (16.10.2023)

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This Securitization Applications was field by the applicant on 26.05.2023 as they have aggrieved by the actions initiated by the Respondent FI as the respondent bank issued demand notice (Annexure-1) on 26.02.2022. In the said demand notice, it is mentioned that financial facilities for an amount for Rs. 25.00 Lacs in favor of SA applicant no. 1 and an amount of Rs. 25.00 Lacs in favor of SA applicant no. 2 was sanctioned and subject property was mortgaged. It was also mentioned the demand notice to loan accounts

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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i.e. account no.1094 and 14495 were opened by the respondent FI and these two accounts were declared as NPA on 31.01.2020 and therefore, the said demand notice was issued on 26.02.2020 claiming an amount as outstanding in first account for Rs. 4690445/- and an amount of Rs. 4645445/-.

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Annexure-2, is the copy of newspaper publication of demand notice and Annexure-3 is the copy of representation to demand notice by the borrower along with proof of delivery.

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Ld. Counsel for the applicant argued that upon receiving of the demand notice dated 11.03.2022 they forwarded the said objection on 10.05.2022. Ld. Counsel for the applicant argued that as the publication of the demand notice was made on 11.03.2022, and so the SA applicant is entitled to file representation/ objection to the demand notice within 60 days from 11.03.2022 and therefore, the said representation was filed on 10.05.2022 through all modes. Ld. Counsel for the respondent FI submitted that the said representation was served upon them and it was not replied as the said representation/objection was time barred from the demand notice dated 26.02.2022.

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As argued by Ld. Counsel for the applicant, delivery of demand notice dated 26.02.2022 is not disputed, but on the ground that the objection was not given within 60 days time from the receiving of demand notice, it was argued by Ld. Counsel for the applicant that the time of 60 days will start from the date of publication because it will be presumed that the respondent FI created a fresh limitation of 60 days by way of publication of demand notice and therefore, the objection which was forwarded on 10.05.2022 was well within the limitation of 60 days.

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Second objection taken by the applicant, is that they have obtained an amount of Rs. 40.00 Lacs against the amount of Rs. 50.00 Lacs and he argued that an amount of Rs. 10.00 Lacs was taken back by Mr. Firoz Malik and Mr. Jitendra Tanwar who were working with the

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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respondent FI and they gave an assurance as they were in need of loan so they asked the applicant to apply for Rs. 25.00 Lacs each, therefore, the amount which was disbursed was Rs. 40.00 Lacs against the prayer to sanction loan amount of Rs. 50.00 Lacs.

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With regard to possession notice dated 14.05.2022 (Annexure-4) it was argued that it was not served upon all the SA applicant.

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Ld. Counsel for the applicant, referred page no. 185 &186 of reply (Annexure R/5) and argued that possession notice dated 13.05.2022 was got published on 20.05.2022 and therefore, the Possession Notice was not got published within seven days time as per mandatory provisions of SARFAESI Act of 2002 and he also argued that it is not clear that in which particular newspaper, the possession notice was got published because from the perusal of page no. 186 name of newspaper is not clear, therefore, he argued that the Respondent FI failed to got published the possession notice as per requirement of law.

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Ld. Counsel for the applicant, also took objection that in the possession notice name of Authorized Officer Sh. Vikram Singh whereas in paper publication name of Authorized Officer who got published the possession notice is not clear.

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Ld. Counsel for the applicant argued that the respondent bank is not authorized to initiate actions under the provisions SARFAESI Act of 2002, they are not notified by the Reserve Bank of India.

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10.Ld. Counsel for the applicant argued that the interest was illegally penalized, liabilities has been enhanced illegally and beyond the terms & conditions of the loan agreement. Ld. Counsel further argued that as Mr. Firoz Malik and Mr. Jitendra Tanwar failed to appear before this Tribunal for cross-examination, therefore, the contention raised by the SA applicant is required to be accepted as true and genuine.

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11.Ld. Counsel further argued that the sanctioned amount of Rs. 50.00 Lacs, only an amount Rs. 40.00 Lacs was disbursed and applicant has deposited an amount of Rs. 40.00 Lacs on or after filing of this SA as

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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and when directed by this Tribunal, therefore, as of now the amount payable is required to be adjudicated and therefore, he prayed, accordingly.

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12.Based on these facts, Ld. Counsel for the applicant submitted that all the actions initiated by the respondent bank are required to be quashed and set aside.

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13.Ld. Counsel for the respondent bank appeared and Authorized Officer of the respondent bank strongly objected the each and every ground taken by the SA applicant and he submitted that total amount of Rs. 50.00 Lacs in two loan accounts for Rs. 25.00 Lacs each was sanctioned in favor of SA applicant and the said amount was required to be repaid in three months time, as it was granted for business expansion, the rate of interest was fixed at the rates of 24% and entire loan was to be repaid in 4 months time. Ld. Counsel further argued that as per Annexure R/2, loan sanction letter the applicants were required to pay additional interest at the rate of 3% per month, an amount of Rs. 750 against the cheque bouncing charges, but they failed to deposit even first EMI.

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14.Ld. Counsel further submitted that the credit facility was sanctioned on 29.09.2019, but till filing of this SA, no amount was deposited by the SA applicant, whereas the loan was required to repay in four months time and meaning thereby, the account was to be closed on or before October, 2019 and what so ever amount was deposited that was deposited after filing of this SA and after directions issued by this Tribunal.

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15.Ld. Counsel for the respondent bank submitted that Sh. Jitendra Tanwar is the Managing Director of the Respondent FI who is not at all related/ involve in the proceedings of sanctioning of credit facility in favour of the SA applicant and he submitted that Mr. Firoz Malik is one of the Co-applicant whose name reflecting in the demand notice at Serial No.6. Ld. Counsel further submitted that Mr. Firoz Malik was not

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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at all working with them in any capacity and if the SA applicants were having any complaint with regard to transaction of any amount, he was at liberty to approach other competent authorities.

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16.Ld. Counsel for the respondent bank, referred page no. 27 to 42 and argued that all the borrowers executed these documents, this is indenture of mortgaged and it was executed for an amount of Rs. 50.00 Lacs and both the applicants failed to object to the amount as mentioned as Rs. 50.00 Lacs in the mortgaged because if only an amount of Rs. 40.00 Lacs was sanctioned, they should have objected before signing of any documents.

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17.In response to these objections, Ld. Counsel for the applicant submitted that an amount of Rs. 50.00 Lacs was sanctioned in their favour without execution of indenture of mortgaged as discussed here in above, but later on, an amount of Rs. 10.00 Lacs was taken back by Mr. Firoz Malik and therefore, they were not having an opportunity to object the amount as mentioned as Rs. 50.00 Lacs in the said document.

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18.Ld. Counsel for the respondent FI referred page no. 144 to 164 and submitted that all the demand notices were duly served to all the SA applicants and objection taken by the SA applicant that demand notice was not served upon, is not legally sustainable.

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19.Based on above said service of the demand notice, Ld. Counsel for the Respondent bank argued that as the demand notice was served the SA applicant on 28.02.2022, they were required to be filed objection to it within 60 days time from 28.02.2022 and not from the publication of the demand notice.

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20.With regard to delivery of possession notice, Ld. Counsel for the respondent bank referred page no. 165-182 and he submitted that the possession notice was duly served upon all the SA applicants on 17.05.2022 and 19.05.2022. Ld. Counsel for the respondent further submitted that proof of affixation of possession notice was not filed on

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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record because no such objection was taken by the SA applicant and he undertook to file the same on record and he further undertook to file original newspaper having publication of possession notice on record.

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21.Original newspaper dated 19.05.2022, the Times of India and colored photographs showing affixation of Possession Notice were filed by Authorized officer of the Respondent FI, through additional affidavit on 29.09.2023 vide dy. no. 2097.

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With regard to publication of Possession Notice, Ld. counsel for the applicant argued that the publication is not at per language of Appendix-IV so publication is illegal.

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23.To counter this objection, Ld. counsel for the respondent FI argued that all the required details as per Annexure-IV are mentioned in the publication so there was nothing illegal in publication as well as in affixation of Possession Notice.

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24.After having heard arguments and after having perused entire record, I am of the view that following issue are to be decided.

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a) Service of Demand Notice.

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b) Right of SA applicant to file objection/ representation to demand notice

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c) Delivery of Possession Notice

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d) Dispute of Rs. 10,00,000/- as claimed in Para no. 5.2 of the SA.

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Issue of Service of Demand Notice:-

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This SA is filed by only two applicants, no objection was taken in this regard and from perusal of Annexure R/4 (page no. 141 to 164) it is clear that the Demand Notice was delivered upon all the borrowers, so any objection with regard to its service is not liable to be accepted. As the Demand Notice was delivered upon all the borrowers, to there was no need of its publication and so objection of publication of Demand Notice at a later stage is not at all liable to be accepted.

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Right to file objection of Demand Notice:-

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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Considering the fact that the Demand Notice was served upon all the borrowers in the light of Annexure R/4, they were required to file objection/ reply to it within 60 days from it and so ground that they have a time of 60 days from publication of Demand Notice on 11.03.2022, is not liable to be accepted because it is a completely misleading argument.

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Accordingly, it is held that the SA applicants failed to file objection/ reply to Demand Notice, within 60 days from the recovery of Demand Notice.

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27.Deliver of Possession Notice dated 13.05.2022:-

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In Para 5.9 of the SA issue of service of Possession Notice is taken and it is mentioned that it was not served upon all the borrower/ guarantors. Copy of possession notice dated 14.05.2022 is filed at page no. 36 of the SA and from perusal of Annexure-R/5 (page no. 167 to 182) Track reports, it is clear that it was served upon all the SA applicants and out of six borrower only two SA applicants are before this Tribunal and Possession Notice was dully served upon them, so the grounds of non-service of Possession Notice on all the borrowers is not liable to be accepted and so stands rejected.

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Dispute of Rs. 10,00,000/-

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I have perused entire record and from the perusal of entire facts, it is clear that the allegations as alleged by SA applicant are completely, based on oral evidence and SA applicant failed to file any documentary evidence to prove such transaction.

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Mr. Firoz Malik was also a borrower and if at all SA applicant gave any amount to him, it was their personal transaction, which have nothing to do with the respondent FI. Non-appearance of Mr. Firoz Malik do not gives any confirmation to the allegation of SA applicant and in my considered opinion, SA applicant was at liberty to take actions before appropriate forum for redressal of such dispute and so SA applicant cannot be claim benefit of Rs. 10,00,000/- from the Respondent FI.

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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29.Based on the above said, it is sufficient to hold that the SA applicants committed default and actions taken by Respondent FI are as per law and so the SA applicant are now liable to pay to remaining outstanding amount.

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With these observations, this Securitization Application stands disposed of as dismissed and all the pending IA also stands disposed of as infractuous.

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Copy of the order be given free to the concerned parties.

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File be placed before the Registrar for compliance after compliance file be

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consigned to record, as per rules.

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(VIVEK SAXENA) Presiding Officer DRT, Jaipur

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M S Rani v. Namdev Finvest Private Limited

Case brief

What is this about?

What the court decided

M S Rani v. Namdev Finvest Private Limited

Case brief

What is this about?

What the court decided

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