Dismissed

K Madhumathi v. The a O Cholamandalam Investment And Finance Company Ltd.

DRT14 Feb 2023SA/461/2022

Case brief

AI extract

What is this about?

In this SARFAESI Application challenging a Sale Notice under Section 13(4) of the SARFAESI Act, the Tribunal observed that the Respondent institutional lender duly followed statutory procedures for issuing demand, possession, and sale notices. Finding no infirmities in the process, the Tribunal dismissed the application without costs and discharged any interim orders.

What did the court decide?

SA dismissed without costs; interim orders vacated; pending applications closed.

K Madhumathi versus The a O Cholamandalam Investment And… — Banking and Recovery | DRT (2023)

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S.A. 461 of 2022 14.02.2023

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 14^th day of February, 2023

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Present: Shri Ganapathi K.R.K. Presiding Officer

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SARFAESI APPLICATION No. 461 of 2022

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1. K.Madhumathi ,

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W/o Late P.Late Kalidas, No.542/622, T H Road, Tondairpet,

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Tondiarpet Fort St George – 600 081.

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2. K.Jaya Vignesh Raghav,

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S/o Late P.Kalidas, No.542/622, T H Road, Tondairpet, Tondiarpet Fort St George – 600 081.

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3. K.Shri Harish,

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S/o Late P.Kalidas, No.542/622, T H Road, Tondairpet,

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Tondiarpet Fort St George – 600 081.

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4. K.Ambrishni Devi, D/o Late P. Kalidas, No.542/622, T H Road, Tondairpet, Tondiarpet Fort St George – 600 081.

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5. Santhiveeriammal

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M/o. Late P.Kalidoss, No.542/622, T H Road, Tondairpet,

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Tondiarpet Fort St George – 600 081. ….Applicants

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Vs.

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The Authorised Officer,

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Cholamandalam Investment and Finance Company Ltd Dare House 2, N.S.C.Bose Road, Parrys, Chennai – 600 001. ….Respondent

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S.A. 461 of 2022 14.02.2023

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Counsels on record / appeared:

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Counsel for Applicants : M/s.M.Manigopi & R.Kandeeban.

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Counsel for Respondent : M/s.M.Arunachalam & M.Nagalakshmi.

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ORDER

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1. This SA is filed challenging the Sale Notice dated 11.10.2022 issued by respondent institution scheduling sale to 18.11.2022 for recovery of a sum of Rs.5,76,61,269/-

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No representation on behalf of applicants. Respondent financial institution entered appearance and filed their counter and typed set of documents evidencing the action taken by them under the Act and submitted that sale did not take place for want of bidders.

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Heard Ld. counsel appearing for respondent financial institution.

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It is the case of 1^st applicant that she along with her husband (since deceased) availed Home Equity Loans to the tune of Rs. 3 crores on 29.04.2017, Rs.1.3 crores on 30.12.2017, Rs.79.50 lakhs on 30.07.2017, Rs.95.52 lakhs on 25.09.2020 from respondent financial institution and offered their immovable property as collateral security for due repayment of loans thus availed. It is submitted that though applicants were regular in repayment of installments, due to sudden demise of 1^st applicant’s husband on 04.06.2021 because of Covid infection, applicants could not make repayments due to severe financial constraint and also due to various family problems, resulting in declaration of loan account as NPA by respondent financial institution. It is

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S.A. 461 of 2022 14.02.2023

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the case of applicants that respondent financial institution had issued Demand Notice under Section 13(2) on 22.09.2021 and subsequently issued Possession Notice dated 03.12.2021 followed by Sale notice dated 25.01.2022 scheduling the sale to 08.03.2022, which was challenged by applicants in SA No.60 of 2022 before Hon’ble DRT-II, Chennai wherein interim stay was granted and applicants were directed to pay a sum of Rs.1 Crore in two instalments by 4 weeks and the same was complied by applicants. Hence, respondent financial institution had withdrawn their SARFAESI actions against applicants. However, respondent financial institution without considering the moratorium for three months for repaying the EMIs as assured, suddenly issued a second Demand Notice dated 26.07.2022 claiming a sum of Rs.5,70,89,657.73p without declaring the loan account as NPA and the said demand notice was also not served to the legal heirs of deceased borrower. After the issuance of demand notice, applicants had remitted an amount of Rs.8,57,660/- (however copies of Demand Drafts furnished aggregate to Rs.13,96,759/-) towards the credit of their loan account. It is further submitted that the respondent bank issued second possession notice dated 03.10.2022 followed by Sale notice dated 11.10.2022 fixing the sale to 18.11.2022 without considering the payments made by applicants.

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Whereas Ld. Counsel for respondent financial institution submitted that 1^st applicant herein as co-borrower along with her husband (since deceased) – the principal borrower, availed credit facilities by mortgaging the schedule mentioned property from respondent financial institution. It is submitted that the principal borrower died due to Covid – 19 on 04.06.2021. Since then, applicants committed default in repayment of their dues. Despite repeated requests, as applicants did not come forward

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S.A. 461 of 2022 14.02.2023

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to repay the dues, respondent financial institution had classified the loan account as NPA on 11.07.2022. Respondent financial institution issued Demand Notice under Section 13(2) of SARFAESI Act dated 26.07.2022 which was duly served to applicants on 28.07.2022 and published in two leading newspapers (The New Indian Express & Dinamani) on 30.07.2022. As applicants / borrowers did not come forward to clear the dues even after expiry of statutory period, respondent financial institution issued Possession Notice dated 03.10.2022 claiming a sum of Rs.5,70,89,657.73p which was duly served, affixed in the conspicuous place of the secured asset and published on 04.10.2022 in two leading newspapers (New Indian Express and Dinamani) as warranted under law. It is submitted that respondent financial institution had obtained a valuation report on 01.10.2022 in compliance of SIE rules. Thereafter, respondent financial institution had issued E – Auction sale notice on 11.10.2022 scheduling the sale to 18.11.2022 which was duly served on 13.10.2022 to applicants. The said sale notice was affixed in the conspicuous place of the secured asset and was also published in two leading newspapers (The New Indian Express and Dinamani) on 12.10.2022 as warranted under law. Ld.Counsel for respondent financial institution submitted that there are no infirmities in the procedure adopted by them while initiating measures under the Act and prayed for passing necessary orders.

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From the foregone submissions, it is evident that respondent financial institution had followed the procedure as warranted under law, while issuing the impugned sale notice and applicants could not make out any infirmities thereupon.

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S.A. 461 of 2022 14.02.2023

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In the circumstances, as applicants could not establish any tenable infirmities in the procedure adopted by respondent financial institution while issuing the impugned sale notice, there are no merits in the present SA and the same is liable to be dismissed.

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Accordingly SA stands dismissed, however without costs. Interim order, if any granted and subsisting till this day stands vacated and all other IAs, if any pending stand closed.

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With the above directions, this SA stands disposed

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A copy of the order be communicated to the parties concerned as per extant guidelines.

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(Dictated to Stenographer (DD), transcribed by her, corrected, signed and pronounced by me in Open Court, on this the 14^th day of February, 2023)

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Sd/-

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(GANAPATHI K.R.K)

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PRESIDING OFFICER

K Madhumathi v. The a O Cholamandalam Investment And Finance Company Ltd.

Case brief

What is this about?

What did the court decide?

K Madhumathi v. The a O Cholamandalam Investment And Finance Company Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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