Dismissed

Inder Kumar v. Au Small Finance Bank Limited

DRT21 Sept 2023SA/360/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's interim application seeking to quash the auction notice of mortgaged property. The court held that the applicant was estopped from claiming ignorance as they had refused couriered demand notices, knowingly allowed the account to become NPA, and failed to raise objections within the stipulated period.

What did the court decide?

Dismissed the interim application; allowed the auction to continue; directed respondent to proceed as per law.

Inder Kumar versus Au Small Finance Bank Limited — Banking and Recovery | DRT (2023)

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Court of the Presiding Officer Debts Recovery Tribunal- Jaipur

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Item No.

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Case No. SA 360/2023

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INDER KUMAR VS AU SMALL FINANCE BANK

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Date: 21.09.2023

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Present:

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Sh. Akarsh Mathur, Ld. Counsel for the Applicant Sh. Akshat Kulshrestha, Ld. Counsel for the Respondent Bank/FI

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Order on IA no. 1692/2023 & Final order

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This interim application was filed by SA applicant with a prayer to quash and set aside auction notice dated 03.07.2023 through which subject mortgaged property was put to auction on 16.08.2023.

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The said interim application was filed by SA applicant on 16.08.2023, when the property was scheduled for auction.

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Reply to this IA was filed on 23.08.2023 vide Dy. No. 1499.

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Along with reply, copy of auction notice dated 28.06.2023, its postal receipts, photocopy of paper publication and photocopy of affixation of the auction notice are filed at Annexure R/1 and Annexure R/2 is the postal receipts and page no. 16, copy of screenshot giving details of auction is enclosed.

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Ld. Counsel for the applicant raised the issue that the auction notice was issued without serving copy of the same to the applicant. The auction notice is not in terms of provisions

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of law as it is not a 30 days mandatory notice. The reserve price for both the properties was fixed for an amount of RS. 60.00 Lac and 40.00 Lac which is very less than the half of the original value and details of auction notice are not mentioned in the official website of the respondent bank, therefore the auction which is called on 16.08.2023 is completely illegal and therefore the auction notice dated 30.07.2023 is required to be quashed and set aside.

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Along with interim application, copy of auction notice at page no. 6, 7 and 8 is filed.

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Ld. Counsel for the Respondent bank strongly objected the prayer and he submitted that the auction notice was issued on 28.06.2023 and not on 03.07.2023, it was duly dispatched to SA applicant through Annexure R/2, it was duly affixed and it was also published in two leading newspapers.

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Ld. Counsel for the Respondent FI also submitted that the fact of pendency of the SA is mentioned in the auction notice enclosed by the SA applicant at page no. 6 of this IA, therefore it is clear that SA applicant failed to notice all the facts as mentioned in the auction notice dated 28.06.2023.

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Ld. Counsel for the Respondent FI submitted that the auction resulted as successful and therefore IA filed by SA applicant is required to be dismissed.

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Heard arguments and perused the record.

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In the present matter there are two demand notices Annexure-1 is the copy of demand notice dated 15.03.202 and Annexure-2 is the copy of possession notice dated 16.03.2023.

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The SA was filed along with application under Section 5 of the Limitation Act, it is admitted in Para 5.IX that the demand notice was issued on 15.03.2022 and it was illegal because the account was declared as NPA illegally and it is also argued that further all the actions initiated by the respondent bank including obtaining the order under Section 14 of the Act of 2002 on 08.02.2023 are completely illegal and therefore all the actions initiated by respondent FI are required to be quashed and set aside.

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On the contrary to it, the Ld. Counsel for the Respondent FI also pointed out that the account was declared as NPA on 10.03.2022 and thereafter demand notice was issued on 15.03.2022, but the said demand notice was withdrawn on account of typographical error and a fresh Demand Notice was issued on 01.08.2022, which has not been brought on record by the SA applicant.

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Copy of Demand Notice dated 01.08.2022, its postal receipts and its tracking report are filed on record at Annexure R/1 collectively and Ld. Counsel for the Respondent bank referred page no. 19 to 24 and submitted that the demand notice, reached to SA applicant on 08.08.2023, was returned on account of refusal and so it is clear that the SA applicants voluntarily avoided service of Demand Notice dated 01.05.2022 upon them and therefore all the actions in

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pursuance of the said demand notice are illegal, intention of the SA applicant is not good and therefore the auction which was scheduled is now required to be allowed to continue.

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Perusal of Annexure R/1, copy of demand notice dated 01.08.2022 clearly shows that the earlier demand notice dated 15.03.2022 was revoked on account of typographical error on account of property details and date of loan start.

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The SA applicant has come before this Tribunal along with demand notice dated 15.03.2022 and not with the demand notice dated 01.08.2022 because as discussed here in above, the service of said demand notice was very cleverly avoided and there is a remark of refused in all the tracking reports, so it is clear that from the date of first Demand Notice dated 15.03.2022, it was well within the knowledge of SA applicant that the account was declared as NPA, but they failed to approach to the Respondent FI, to deposit outstanding amount within 60 days or to file any objection to it.

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Physical possession of the subject mortgaged property was taken by the respondent FI on 16.03.2023 and after that on 18.05.2023, this SA was filed.

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Considering the single fact that the SA applicant refused to accept the demand notice dated 01.08.2022, it is sufficient to hold that the SA applicant is not entitled to claim any relief and considering the objections in the auction notice dated 28.06.2023, I am of the view that the auction is to be allowed because in the interim application, the SA applicant has

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challenged the auction notice dated 03.07.2023, whereas in fact there is auction notice dated 28.06.2023 and not 03.07.2023.

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Accordingly, I am of the view that the SA applicant avoided the service of demand notice dated 01.08.2022, the fact that their account was declared as NPA was very well within the knowledge, since 15.03.2022, the applicant failed to deposit any of the amount, physical possession was taken and then the auction which was scheduled on 16.08.2023, was successful but Auction Notice was challenged on the same day by filing IA no. 1692/2023.

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Therefore, I do not find any reason to allow the prayer of SA applicant and accordingly, the SA stands disposed of as dismissed.

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Auction of the subject mortgaged property is not illegal and Respondent FI is at liberty to proceed ahead as per law.

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SA as well as all pending interim applications stands disposed of as dismissed.

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Vivek Saxena Presiding Officer DRT, Jaipur

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Inder Kumar v. Au Small Finance Bank Limited

Case brief

What is this about?

What did the court decide?

Inder Kumar v. Au Small Finance Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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