Quashed

Om Prakash Kumawat v. Hero Housing Finance Ltd.

DRT26 Jun 2023SA/509/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal held that the respondent FI could not willfully withdraw an auction notice without reason. The court quashed an order under Section 14 allowing direct possession by the FI, directing authorities to pass a new order requiring an authorized subordinate to take physical possession.

What did the court decide?

Order dated 15.03.2022 passed by the CMM/DM under Section 14 was quashed. Authorities directed to pass a fresh order in conformity with Section 14(1-A).

Om Prakash Kumawat versus Hero Housing Finance Ltd. — Property and Title | DRT (2023)

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SA No. 509/2022

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

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SA No. 509/2022

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Om Prakash Kumawat, S/o Sh. Bhanwar Lal, R/o Plot No. 40, Morwal Bhawan, Shikharpur Road, Nolyaki Dhani, Gular Ka Bandha Sanganer, Jaipur, Rajasthan-302029, Phone:9314695450

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Mrs. Rekha Kumawat , W/o Sh. Om Prakash Kumawat, R/o Plot No. 40, Morwal Bhawan, Shikharpur Road, Nolyaki Dhani, Gular Ka Bandha Sanganer, Jaipur, Rajasthan302029, Phone:- 9314695450

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..Applicants V/s

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1. Hero Housing Finance Ltd, through its Authorized Representative having its office at 09, Community Centre, Basant Lok, Vasant Vihar, New Delhi- 110057, Phone: 1800212-8800, Email: [email protected]

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...Respondent

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Present:

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Sh. Kailash Tailor, Ld. Counsel for the Applicant

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Sh. Pramod Kumar, Ld. Counsel for the Respondent Bank/FI

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(Final Order)

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(26.06.2023)

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This SA was filed on 23.08.2022, reply to it was filed on 03.09.2022.

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An IA No. 1456/2022 was filed by the respondent FI on 29.08.2022 with the prayer that SA may be dismissed as the applicant challenged only Auction Notice dated 06.08.2022, which

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stands withdrawn vide notice dated 24.08.2022 and so as of now, no cause of action survives, so SA may be disposed of as infractuous.

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In this IA, it is also submitted that SA applicant cannot challenged earlier cause of actions as the SA filed by them was dismissed vide order dated 15.06.2022, passed by this Tribunal.

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But Ld. Counsel for the applicant strongly objected the prayer of dismissal of SA, mainly on the grounds that the Respondent FI, willfully withdrew the Auction Notice dated 06.08.2022, without assigning any reason, with an ulterior motive to increase the demand/liability and he also raised the issue that an Authorized Officer of the Financial Institution is not entitled to take possession directly from the applicant in the light of provisions as contained Under Section 14(1A) of the SARFAESI Act of 2002, so SA is maintainable and issue of taking possession by Authorized Officer of the Respondent FI is required to be decided.

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Heard arguments and perused the record

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In Para 7 of the SA, prayer is with regard to quash and set aside the Auction Notice dated 06.08.2022 and to stay as well as quash the order dated 15.03.2022, passed by Ld. DM, u/s 14 of the Act of 2022.

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So, no consideration with regard to earlier Notices issued by the Respondent FI, is required.

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Now the issue of Auction Notice dated 06.08.2022 is to be decided.

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Admittedly Auction Notice was issued on 06.08.2022 and Auction was scheduled on 08.09.2022. Amount, so outstanding as 11.08.2021 was Rs. 3,57,91,648/- and this SA came to be filed on 22.08.2022, reply to SA was filed on 03.09.2022 and prior to it on 29.08.2022, IA No. 1456/2022 was filed by Authorized Officer of the Respondent FI, praying therein to dismiss the SA as withdrawn the said Auction Notice dated 06.08.2022.

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I have perused the letter dated 24.08.2022 issued by the Respondent FI and found that the Respondent FI has simply recalled the Auction Notice dated 06.08.2022 but without any specific reason or fault committed by them, which compelled them to withdraw the Auction Notice.

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So, it is clear that the Respondent FI, willfully withdrew the Auction Notice dated 06.08.2022, without assigning any reason and in my considered opinion the Respondent FI being a secured creditor is not entitled to issue and withdraw any notice issued by them, without assigning any reason.

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Respondent FI was at liberty to go ahead for auction of the property in order to recover the outstanding amount but as they withdrew the Auction Notice without assigning any reason, so in my considered opinion Respondent FI, is not at all eager to recover the outstanding amount by way of sale of mortgaged property.

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Now, the legality of order u/s 14 of Act of 2002 is being decided.

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Order u/s 14 of the Act of 2002, was passed by Ld. CMM on 15.03.2022. In this regard, it is required to mention here that both the SA applicants filed a SB Civil Writ Petition No. 6199/2023 with a prayer to quash the order dated 15.03.2022 and from the order dated 11.05.2022, passed by Hon’ble High Court, it is clear that the said Writ Petition was dismissed in view of availability of alternate remedy under the provisions of SARFAESI Act of 2002.

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So, it is clear that Writ Petition filed by SA applicant was disposed of and a liberty was granted to SA applicant to avail remedy and so SA was filed by the SA applicant.

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Perused order dated 15.03.2022 passed by Ld. CMM, and found that for taking possession of the subject property, following order was passed:-

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प्रॉट नं . 26, स्कीभ गोकुरऩुयी , एमयऩोटट के साभने , जगतऩुया योड़ , तहसीर खोखावास , • सांगानेय जमऩुय जजसका ऺे त्रपर 193,19. स्वामय मार्टहै , 2- प्रॉट नं . 36, श्रीनाथ नगय , स्कीभ नं . 10 एमयऩोटट योर् , तहसीर सांगानेय जजरा जमऩुय

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जजसका ऺे त्रपर 164 स्वामय वार्टहैएवं 3 प्रॉट नं . 37 श्रीनाथ नगय , स्कीभ नं . 10. एमयऩोटट योर् , तहसीर सांगानेय , जजरा जमऩुय जजसका ऺे त्रपर 309.32 स्वामय मार्टहैका कब्जा प्राथी / फैंक / कंऩनीकेअधधकृत अधधकायीकोददरामेजाने एवं ऩुलरस इभदाद उऩरब्ध कयाने हेतु ऩुलरस कलभश्नय , जमऩुय को आदेलित ककमा जाता है कक प्राथी / फैंक / कंऩनी द्वाया ननमभानुसाय खर्ाट जभा कयवामे जाने ऩय ऩुलरसइभदाद उऩरब्ध कयवामीजामे।

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But the provisions as contained in Section 14 of the Act of 2002, empowers only Ld. CMM/DM, as the case may be, to take possession or to authorize his subordinate to take possession of the subject property and for ready reference provisions as contained in Section 14(1-A) are reproduced here as under:-

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(1) Where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him—

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(a) take possession of such asset and documents relating thereto. (b) forward such asset and document to secured creditor.

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It is a fact that in the present matter, Respondent FI failed to take action u/s 13(4) of the Act of 2002 and has directly approached to Ld. CMM, for obtaining it. Certified copy of the 9 point Affidavit was not filed, though it was directed vide order dated 17.06.2023.

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Accordingly, I am of the view that the order dated 15.03.2023, passed by ld. CMM, is not in conformity of provisions of Section 14(1-A) of the Act of 2002 because Ld. CMM ought to have take possession directly or ought to have depute one of his subordinate that may be Ld. Court Commissioner, who could have proceeded for taking physical possession of the subject mortgaged property.

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For ready reference, recently Ld. DM, Bikaner, passed an order u/s 14 of the Act of 2002 in the matter of Punjab National Bank vs. Smt. Kavita Tared and authorized Block Development

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Officer to take possession f the secured assets, and the relevant para which gives an authority is reproduced as under:-

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अतः उऩयो्त वर्णटत प्रावधानो के संदबट भें इस न्मामारम के सभऺ प्रस्तुत ककमे x;s उऩयो्त तथ्मो एवं दस्तावेजो के भध्मेनजय प्राथटना ऩत्र अन्तगटत धाया 14 सयपेसी गम ए्ट 2002 भें प्राथी फैंक / कंऩनी का प्राथटना-ऩत्र स्वीकाय ककमा जाता है तथा The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 की धाया 14 के तहत प्रदत िज्तमों का प्रमोग कयते हुए मदद अप्राथी श्रीभती कववता तकट ऩनन आत्भायाभ तर्ट हनुभान भंददय के ऩीछे, ऩूगर योड़ फीकानेय आदद तो ऩैया संख्मा 2 भें वर्णत फट धक यखी गई सम्ऩनत को ननमभानुसाय कब्जं भे ं लरए जाने े क लरए उऩखण्र् अधधकायी, फीकाने य को ननदे ि प्रदत्त ककमे जाते हे तथा वै महे सुननजश्र्त कयंगे कक उ्त सम्ऩजत्त का कब्जा लरमे जाने से ऩूवे प्रनतबूनत दहतट (प्रवतन) ननमभ 2002 कट प्रावधानों के तहत आवश्मक प्रकिमा ऩूणे कयकट एवे ं मदद सऩजत्त भं ं कोई ककयामे दाय हे । तो उस सै ऩजत्त को छोड़नं हे तु सभुधर्त सभमे दने के उऩयाे त ही ऩं या 2 भै ं वर्णे त सट ऩजत्त का अधधग्रहण (कब्जा) कय प्राथीं कम्ऩनी को ननमभानुसाय सुऩुद कयट ंगे । मदद अप्राथी / ऋणी द्वाया फकामा ऋण काे बुगतान कय ददमा जाता ह तो इस आदै ि की कामे वाही नहीट की जावं । े जजरा ऩुलरस अधीऺक सम्फजन्धत अधीनस्थ ऩुलरस उऩ अधीऺक को इस आदेि की ऩारना हेतु उऩखण्र् अधधकायी, फीकानेय को आवश्कतानुसाय प्राथी के खर्े ऩय सभुधर्त ऩुलरस फर उऩरब्ध कयवाने हेतु ऩाफंद कयेंगे । उऩखण्र् अधधकायी कामटवाही कयने से उ्त फंधक यखी गई सम्ऩनत ककसी बी न्मामारम के स्थगन से प्रबाववत तो मह बी सुननजश्र्त कये कक नहीं है। इस आदेि की सूर्ना प्राथी फैंक / कंऩनी अप्राथीगण को देवें ।

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Therefore order u/s 14 of the Act of 2002 dated 15.03.2022, is not as per law and in my considered opinion, the Respondent FI is always at liberty to obtain a fresh order u/s 14 of the Act of 2002 from Ld. CMM/DM as the case may be and the concerned authorities are directed to pass an order in conformity of provisions as contained in Section 14(1-A)

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With these observations SA stands disposed of.

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Vivek Saxena Presiding Officer DRT, Jaipur

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Om Prakash Kumawat v. Hero Housing Finance Ltd.

Case brief

What is this about?

What did the court decide?

Om Prakash Kumawat v. Hero Housing Finance Ltd.

Case brief

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