Dismissed

Mr R Murugesan v. Sundaram Home Finance Ltd.

DRT30 Oct 2023SA/630/2022

Case brief

AI extract

What is this about?

This applicant challenged a public sale of secured property under the SARFAESI Act, alleging procedural defects regarding notice service and inclusion of an existing structure. The Tribunal dismissed the application, finding the recovery measures compliant with the statute.

What did the court decide?

Sale proceedings upheld; application dismissed.

Mr R Murugesan versus Sundaram Home Finance Ltd. — Banking and Recovery | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 30^th day of October, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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SA No.630 of 2022

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Mr. R. Murugesan S/o Late Rengasamy Old No.1/32A, Thoppu Nayagam Seniya Viduthi, Orthanad Tanjore – 614 628 …Applicant

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Versus

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The Authorised Officer Sundaram Home Finance Limited Sundaram Tower, No.46, Whites Road Royapettah, Chennai – 600 014

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G. Saravanan S/o Govindaraj

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D. No.37D, Pattukottai Thanjavur – 614 601

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1. The Chief Manager Indian Overseas Bank Abhilash Rajesndran Pattukootai Branch No.156, Lakshmi Building, Pattukottai Thanjavur – 615 601 …Respondents

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Counsel for the Applicant : M/s R. Thiagarajan Counsel for 1^st Respondent : M/s K.J. Parthasarathy Counsel for 2^nd Respondent : M/s G.M. Gokul Ram & K. Selvam Counsel for 3^rd Respondent : …..

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FINAL ORDER

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This Securitization Application in short SA is filed u/s 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), herein after been referred as SARFAESI Act or the Act as the case be with a prayer to set aside the public sale held on

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24.11.2022 pursuant to the sale notice dated 3.11.2022 issued by the respondent.

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The applicant admitted to have availed a housing loan for Rs.20 lakhs is contending that the installments totalling Rs. 9 lakhs had been repaid. It is further alleged that the respondent had levied interest at flouting rate against the agreed terms.

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It is further case of the applicant that the measures are initiated without following the procedure as required by the statute and the public auction held on 24.11.2022 is against law. The service of the impugned sale notice leading to the sale is also disputed. The next contention taken by the applicant is as to the valuation.

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In the grounds to the SA, the applicant disputing the steps followed by the respondent is issuance of possession notice, which according to the applicant is against Rule 8 of the rules. The applicant is also contending that the structure standing in the property is not included in the possession notice or sale notice, which itself make the said notices and the proceedings invalid.

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Along with the SA, the applicant had produced the sale notice. The applicant had produced the additional documents viz., Sale notice, Memorandum of deposit of title deeds, Sale certificate, Memorandum of deposit of title deeds by 2^nd respondent, Valuation report, Demand notice, Photograph, Electricity connection, Certificate from VAO, Summons from Revenue Tahsildar.

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The applicant had filed IA No.2153 of 2022 seeking impleadment of the respondents 2 and 3, which stands allowed on 06.03.2023. The applicant

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though was directed to carry out the amendment in a week’s time, the applicant carried out the amendment incorporating only the 2^nd respondent, though amended SA was filed including respondents 2 and 3. Despite impleadment of additional respondents no contentions were sought to be raised against them in the SA.

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The respondent entered appearance and filed their counter inter alia contending that the measures taken by them and continued by them leading to the sale are strictly in accordance with the statute. It is also stated that the present case is filed after the issuance of the sale certificate and hence liable to be dismissed. It is further stated that as the borrower failed to pay back the amount, and only due to the failure in remittance of EMI. It is also pointed out that as on date of NPA; 31.10.2013, the overdue was 4 EMIs.

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The respondent further submits that as service of the demand notice was refused by the borrowers the same was affixed and published as required. In respect of the possession notice also, it is contented that the respondent had despatched, served and affixed as required under the statute. It is stated that the respondent had also initiated proceedings u/s 14 of the Act. It is also pointed out that since the OTS proposals were given citing paltry amount the same were not considered. In respect of the sale notice, it is stated that the same though despatched was deliberately returned. The sale notice was duly affixed and published as required under the statute.

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The respondent had produced the following documents viz., Loan application, Loan offer letter, Loan agreement, Demand notice along with returned cover, Affixture of demand notice, Publication of demand notice, Judgment in OS.2

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of 2014, Possession notice and Acknowledgment card, Publication of possession notice, Order in section 14 application, Valuation report, Sale notice and tracking report, Affixture of sale notice and Publication of sale notice.

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Heard the respective counsels for contesting parties, considered the case put forth by the applicant in light of pleadings and documents produced in evidence and also the defence in the light of documentary evidence relied by the respondents. The following issue arise for consideration in the above matter:-

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(i) Whether the measures initiated and continued by the respondent are in accordance with the statute?

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(ii) What orders are to be passed?

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Since both their issues are interrelated, the same were gone into and decided together.

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The applicant is having no dispute as to the availment of the credit facility and creation of security interest over the schedule properties. The defaults in repayment are also admitted. However a contention is taken that the remittances made by the applicant were not properly accounted. This contention is taken without specifying any of such so claimed remittances which the applicant apprehended are not given credit to. In the light of the fact that the said contention is so vague, this Tribunal is not enticed to go into especially in an adjudication u/s 17, this Tribunal cannot go into the computation of the outstanding.

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The respondent had produced the evidence proving the compliance of rule 3, rule 8(1) and 8(2) as the postal receipts, photograph evidencing affixture and publication of the demand notice and possession notice are produced by the respondent. In respect of the sale notice also, the respondent had produced the proof of service, affixture and publication of the same. The compliance as to the mandate of taking valuation is proved as the respondent had produced the proof of report of the approved valuer.

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The Ld. Counsel for the applicant placed heavy reliance on the fact that there exist a building in the schedule property and contended that there is no merit in the statement made by the respondent in their counter that “the borrower did not commence the construction” as a reason for conversion of account to NPA. It is to be noted that the respondent does not give the above as the sole reason for NPA as it is specifically stated in the counter that the borrowers failed to make repayment and hence the account was classified as NPA.

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The next contention taken by the applicant is that the existence of the structure in the property was never mentioned in any of the notice including the sale notice leading to the impugned sale. This contention though correct, this Tribunal is of the view that since it is the admitted case of both parties that the building is an incomplete one, the same cannot be a reason to invalidate the proceedings. The reserve price is fixed considering the valuation arrived at by the approved valuer after valuing the building also. Since the reserve price is fixed in relation to a valuation arrived at by considering the value of

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the existing structure, this contention cannot be taken as a ground to set aside

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the entire proceedings.

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In view of above discussion and findings entered therein, this Tribunal is of the view that there is no merit in the SA and the same is to be dismissed.

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In the result SA stands dismissed, all pending IA’s stands closed, no orders as to cost. Issue copies in accordance with Rule 16 of the Debt Recovery Tribunal (Procedure) Rules 1993.

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(Dictated to PS, transcribed by him, corrected, signed and pronounced by me in Open Court on this the 30^th day of October, 2023)

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Sd/(T. RAJESH ) PRESIDING OFFICER DRT-II, CHENNAI

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Mr R Murugesan v. Sundaram Home Finance Ltd.

Case brief

What is this about?

What did the court decide?

Mr R Murugesan v. Sundaram Home Finance Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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