Dismissed

Aman Aggarwal v. Iifl Home Finance Limited

DRT8 Nov 2023SA/56/2023

Case brief

AI extract

What is this about?

In this Special Application under Section 17(L) of the SARFAESI Act, the court dismissed the applicant's petition challenging the respondent bank's action in declaring the account NPA, issuing notices, and taking possession of mortgaged property. The court upheld the strict compliance of procedural requirements under the Act by the respondent.

What did the court decide?

The Special Application to quash the FSARFAESI action and declare the bank's measures illegal and arbitrary was dismissed, and the submissions stand consigned to records.

Aman Aggarwal versus Iifl Home Finance Limited — Banking and Recovery | DRT (2023)

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Debts Recovery Tribuna!-Il, Delhi

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sA 56 0F 2023

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AMAN AGGARWAL & ANR. VS. IIFL HOME FINANCE LIMITED

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Reserued on: 27.L0.2023 Pronounced on: 08. 1 1.2023

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Present: Shri Deepak Kumar Srivastava, counsel^for applicant.

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Shri Nishant Awana, counsel for^{respondentFI.}

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This SA has been filed by the applicant^{against the} respondent bank under Section^L7(L) of^{the SARFEASI} Af.,}OOZ with the request that the^{action and measures} initiated by the respondent FI^{in respect of the propefi} being all that^piece and^{parcel of propefibearing no. 251-8,} with roof rights, area measuring^{50 sq. yards, out of 100 sq.} yds comprised in Khasra No^-681, situated at^Village Nawada, Colony known as^{Om Vihar, Phase-l-A, Uttam} Nagar, New Delhi^{-110059 be declaredillegal and arbitrary} and^quash the same.

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The brief facts of^{the application are that in June 2018} the official of the^{respondent FI came into contact of} applicants and lured^{him to granting the loan @9.5olo to} !Oo/o. Thereafter, the^{respondent had taken signature of the} appticant and co applicant^{on ceftain loan papers without} explaining the contents^{of the same and sanctioned a loan} facility of Rs.32,50,000/-^{against the prospectno. 847496.} The respondent FI^{had also issued the certain insurance} policies to the applicants against^{the loan. A sum of Rs. 2.5} Iakh was taken^{by the respondenton account of insurance'} It is further submitted^{that when the first EMI was deducted,} the applicants^{came to know that the respondentFI is} charging an^{exorbitant rate of interest @ 15olo and applicant} immediately approached J29_^{respondentFI, but the} ' €'\

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respondent FI did not^give any satisfactorily^{reply to the} applicants. It is further^{submitted that in the month of} February 2020, the respondent^{FI again compelled the} applicants to take another^{loan and taken signature of the} applicant and co applicant^{on certain loan papers without} explaining the contents^{of the same. The respondentFI} again^{promised and assuredthe applicants that they will} charge interest @^{10o/o.The respondent FI further promised} that they will^{charge interest @ 10o/o on the previous loan} account no^{847496.Accordingly the respondent FI} sanctioned a^{loan of Rs.10,35,000/-to the applicants against} the^{prospectno. 913105.However,the respondent FI again} charged interest O^{iSyo. In lanuary 202L the respondent FI} again compelled^{the applicants to take another loanand} thereafter the^{respondentFI further takensignatureof the} applicants^{on the ceftain loan papersand sanctioned a loan} of Rs. !,37,133/-^{only to the applicants against the prospect} no.^{g4L490. The respondentFI did not reduce/ amend the} rate of interest^{and charge interest @ !4o/o' It is submitted} that the respondent^{FI has manipulated the loan papers by} charging illegal^{rate of interest on the sanctioned loan from} the applicants.^{It is further submittedthat due to pandemic} covlD^{-19 the applicants suffered a huge loss in the} business and^{subsequently the same was shut down' The} applicants^{several timesapproachedthe respondentFI for} regularization^{of the EMIs but the respondent FI has shown} very adamant^{attitude and threatened to take the possession} of the^{propefi.Thereafter the respondentFI affixed a} demand^{notice dated 13.09.2022under Section 13(2) of the} SARFAESI^{Act, 2OO2 on the subject propefi. From the said} demand^{notice the applicants came to know that the} respondent^{FI had illegally declared the loan accounts as} N.P.A. on 04.09^{.2022.Thecounsel for the applicants sent a} t\

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reply dated 20.L0.2022 to the demand^notice to^the respondent FI whereby the counsel^{informed the respondent} FI that the applicants are not^{liable to pay allegedamount as} claimed by the respondent^{FI in the notice dated L3.09.2022.} It is further requested to amend /^{rectify the interest rate as} 9.5 or L}o/o^p.a. in respect of^{the above said threeloan} accounts. Thereafter,^{respondentFI issued noticeunder} Section 13(4) on 09.^L2.2022.

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The Ld. Counsel of^{the applicant furthersubmitted} that the respondent^{FI has taken the physical possessionof} the subject^{propefi on 03.03.2023 despiteof the fact that} the present SA has^{been filed on 20.0L.2023and was} subjudice and IA^{filed by him on t5.02.2023 for stay on} physical possession was also^{pendingadjudication.} Accordingly, it is^{prayedthat the action and measures} initiated by the^{respondentFI in respectof the subject} propefi be declared illegal and^{arbitraryand quash the} same and the SA^{of the applicant may be allowed.}

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The Ld. Counsel^{of respondentFI appearedand filed} reply to the SA.^{The respondent vehementlydenied the} allegations of the^{applicantand submitted that at the request} of borrowers the^{respondentFI has sanctioneda financial} assistance of^{Rs.32,50,000/-vide sanction letter dated} 26.07.20L8 against^{the mortgage in respect of propefi} bearing no. 251-8,^{with roof rights, area measuring50 sq.} yards, out of 100 sq.^{yds comprised in Khasra No -681,} situated at Village^{Nawada, Colonyknown as Om Vihar,} Phase-l-A, Uttam^{Nagar, New Delhi -110059and relevant} documents executed^{by the applicantson 27.07.2018. Again} at the request of^{borrowers the respondent FI sanctioned} financial assistance of^{Rs.10,35,000/-and Rs.1,37,L33,421-} vide sanction letters^dated_ .222.2020^{and 3L.10.2022} c(

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respectively and relevant documents executed by^the applicants on 24.02.2020 and^{21.01 .202L. The above said} credit facilities were secured by^{equitable mortgageof} subject propefi with the^{respondent FI. It is submittedthat} the borrowers failed to^{maintain the financial discipline and} the said accounts and their^{accountwas classifiedas NPA on} 04.09.2022 and notice^{under Section 13(2) issued on} L3.09.2022. The respondent^{Fi receivedobjections to the} 13(2) notice on 20.10.2022^{and respondent FI repliedto the} objections vide letter^{dated 07.Lt.2022. However,the} borrowers failed to^{clear the liability, hence respondentFI} was constrained to^{issue possessionnotice dated 08.L2.2022} and took symbolic^{possessionof the subject propefi and} publish the same in newspapers.^{ThereafterrespondentFI} approached the^{Ld. CMM, South West District,Dwarka and} got appointed the Receiver^{and the Ld. Receiver had issued} notice dated 09.02.2023^{for takingphysical possessionof the} subject^property and^{took the physical possession on} 04.03.2023. Thereafter,^{respondentFI put the propefion} auction scheduled^{on 05.07.2023. The auction noticewas} duly serued to the^{applicant and published in newspapersas} well as affixed on^{the conspicuous part of the subject} propefi. The mortgaged^{propefi was sold to the highest} bidder for a sum^{of Rs.36,40,000/- and possession was} handed over to the^{auction purchaser. It has been prayed} that the SA maY^{be rejected.}

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Heard the^{Ld. Counsel of applicantand Ld. Counsel of} respondent FI and^{perused the record.}

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From the^{perusal of the pleadingssubmitted by the} respective^{parties and the arguments it is evident that the} first contention of^{the applicql!-lsthat the respondentFI is} s(

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charging exorbitant rate of interest.^{It is submitted that the} first loan was taken in the^{month of June,2018 and interest} on the Ioan amount^{was agreed} @9.5olo^{to 10olo.Despitethis} the respondent FI has^{chargedthe interest @15olo. In the} month of February,^{2020 the applicant has again taken a loan} and the agreed^{rate of interestwas @10olo,however, the} respondent FI is^{charging the interest @15%. In} January,2O2l, the^{applicant has again taken a loan and on} such loan the^{respondent FI is charging improperinterest} @t4o/o.It^{is also submitted that the respondent FI has taken} the signature of^{the applicant on blank papers and misleaded} the applicant.^{Therefore, it is submittedthat the respondent} FI may be^{restrainedfrom charging the rate of interestmore} than 9.5o/o^{p.a. On the otherhand, the Ld' counsel of the} respondent^{FI has submittedthat the respondent FI is} charging the^{interestas per agreed rate of interest' All facts} were well^{withinthe knowledgeof the applicant and there} was no misrepresentation^{on the part of the respondentFI' It} is also submitted^{that interest rate was floating rate of} interest and^{the respondentFI has charged the rate of} interest as^{per RBI guidelines. From perusal of the record it is} clear that^{the applicant has taken loan on three times'The} applicant^{was paying the EMIs knowingthe rate of interest} charged by^{the respondent FI. Despite this the applicanthas} taken two other^{loans, one in the year 2020 and other in} January,]]OZL.^{If the respondentFI has misrepresented the} rate of interest^{at first time, how the applicanthas taken the} loan again^{from the same FI has not been explained' The} applicant is^{an educated person and must have seen the} statement of^{account.Therefore, it cannot be presumed that} the respondent^{FI has misrepresentedthree times' From the} sanction letter^{it is clear that the rate of interesthas} specifically^{mentioned in the documents and the applicant}

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has put signature on the loan documents. There is^{no any} evidence on record that the agreed rate of^{interest was} @9.5olo.^{Therefore, it cannot be presumed that agreed rate} of interest was @9.5olo.

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applicant has submitted that the^{account of the} applicant has been declared^{NPA without giving any prior} notice. Therefore, all action taken by^{the respondent FI is} bad in Iaw. In this regard, I^{have gone throughthe provisions} contained in the SARFAESI^{Act. Before declaration of the} account as NPA there is^{no necessity of issuing any prior} notice to the borrower or the^{guarantor. If the paymenthas} not been made the account^{can be declaredas NPA after the} expiry of^period of 90 days^{as per RBI guidelines.The} account of the applicant^{has been declared NPA following the} RBI guidelines.^{Therefore, on this ground the SA application} of the applicant cannot^{be allowed.}

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The Ld.^{counset of the applicanthas also submitted} that the notice under^{Section13(2) has not been serued} upon the applicant^{and therefore, there was total non} compliance of the^{provisions of the SARFAESI Act. On the} other hand the Ld.^{counsel of the respondent FI has} submitted that the^{notice under Section 13(2) was duly} serued upon the^{applicantand there is strict compliance of} SARFAESI^{provisions. In this regard,the respondentFI has} filed the notice^{issued under Section 13(2) as paperno. L7l,} the postal receipts^{page no.t76 and also filed tracking} reports. Frorn^{perusal of this record it is clear that the notice} under Section^{13(2) has been properly serued upon the} applicant.

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Ld. counsel of the^{applicant also submittedthat notice} under Section^{13(4) has not} ui;''^{been seruedon the applicant}

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and same has not been^published in the two^leading newspapers, therefore, there is clear violation of^provisions of SARFAESI Act. On the other hand, the Ld. counsel^of respondent FI has submitted that the notice under^Section 13(4) has been duly serued upon the applicant and the^same has been^published in the two leading newspapers^circulating across the Delhi. It is also submitted that the^{notice has also} been affixed over the subject^propefi. The^respondentFI has submitted the copy of the^{possessionnotice, proof of} dispatch along with the tracking report and^{the publication} report. The respondent FI has also^filed the^{proof of the} affixation. The respondent^{has producedthese documents as} paper no. 227 to 258. From^perusal of these documents^{it is} clear that the notice under Section^{13(4) has been duly} serued upon the applicant and the^{same has been published} in the two leading newspaper, one of^{English and one in the} vernacular language having circulation^{in the Delhi. The} notice has also been duly affixed^{on the subject propefi.} Therefore, there is clear compliance^{of al! the provisions of} SARFAESI ACt.

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The Ld. counsel of the applicant^{submittedthat the} appticant has filed objections^{againstthe notice issued under} Section 13(2) of the SARFAESI^{AcL It is submitted that the} objections raised by the applicant^{has not been decidedby} the respondent FI and therefore,^{the action taken by the} respondent FI is bad in law. On the^{other hand, the Ld.} counsel of the respondent FI has^{submitted that the} objections of the applicant filed against^{the notice issued} under Section 13(2) have been duly^{rejected by the} respondent FI and communication of the^{same has been} made by the respondent FI to the^{applicant. The respondent} FI has submitted the copy offie^{reply dated 11.11.2022 and} .g\t-_-

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also produced the proof of dispatch and its tracking report. From perusal of the record it is clear that the respondent FI has duly considered the objections of the applicant and has rejected the objections of the applicant and communicated the same to the applicant. Therefore, there is no violation of any provision of the SARFAESI Act.

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The Ld. counsel of the applicant also submitted that the respondent FI has levied penal charges against the applicant without any basis. From perusal of the record it is clear that the applicant has failed to repay the amount and therefore, the notices has been issued and other legal action has been taken. Charges of the same is to be paid by the borrower/guarantor. Therefore, there appears no ground to say that the respondent FI has levetted any ittegal penat charges.

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On the basis of above discussion, the SA application of the applicant is liable to be dismissed.

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ORDER

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The present SA stands dismissed. File be consigned to records.

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Date : 08.tL.2023

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! *#4 affi (SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi

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This judgement has been signed, dated and pronounced in open court.

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Date : 08.LL.2023

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AA i Et' \ry> (SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi

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Aman Aggarwal v. Iifl Home Finance Limited

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Aman Aggarwal v. Iifl Home Finance Limited

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