Dismissed

K Padma v. Iifl Home Finance

DRT10 Dec 2024SA/240/2023

Case brief

AI extract

What is this about?

In a Section 17 application under the SARFAESI Act, the Debts Recovery Tribunal set aside a possession notice issued against a deceased borrower. The court held that issuing the notice in the name of a deceased borrower without first issuing a fresh demand notice to the legal heirs rendered the action illegal and invalid.

What did the court decide?

Possession notice dated 08.06.2023 set aside; directed to issue fresh demand notice under Section 13(2) to legal representatives and alternatives.

K Padma versus Iifl Home Finance — Contract and Commercial Disputes | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL - I AT HYDERABAD

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DATED THIS THE 1 OTH DAY OF DECEMBER.2024

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.240,/2023

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Smt.K.Padma, W/o late K. Bhaskar, Aged 40 years, Occ:business, R/o 9-60 ll4l, DundigalTanda, Dundigal, Medchal ... Applicant

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Versus

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IIFL Home finance

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Rep. by its Authorized officer My Home Sarovar, Secretariat^Road, Adarshnagar, Basheerbagh, Hyderabad ... Respondent

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Counsel for tLrc Applicant : Sri T. Vijag Kumar. Counselfor Respondent : Sn 1V.8. Sudarshan

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ORDER

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This Application is filed u/s.17of the Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2OO2
(SARFAESI Act, 2OA2\ challenging the action of Respondent in
issuing ISULrrr16 r \JDDr/Dorurr Possession Notice r!vLrvv uL vv.vv!-"-"_t)r- dt . 08.06. ZOZSr, ftt schedule
6q..-aat
property and to declare the same as illeqd'aft aif,iffi1, '
il i:y d$
Ir,'t. a d-^-DF4rrrr-^.
2. The averments made by the Applicant 4 nrief {rflffitffi;s:
ll .:h ?
,rroo#

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The husband of the Applicant is a borrower and he obtained loan of Rs.20 lakhs in the year 2022 from the Respondent. Subsequently, he died on 2I.1O.2O22 due to health problems. The Respondent issued demand notice dt.13.1o.2o22 by declaring the loan account as NpA. Thereafter the Applicant visited the Respondent and raised objections orally by informing that her husband died on 21.10.2022. The Respondent stated that the death claim shall be submitted to the ICICI prudential Life Insurance and the amount will be adjusted towards loan account. But thereafter, the Respondent issued possession notice u/s 13(a) of the Act dt.08.06.2023 in the name of the deceased husband of the Applicant. Thus the possession notice dt.08.06.2023 issued against the dead person is invalid and the said notice was also not published in two daily newspapers nor affixed on the schedule property as contemplated under Rule 8(1)&(2) of Securit5r Interest (Enforcement) Rules, 2OO2. Hence the SA.

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The Respondent filed their Reply denying all the adverse allegations made in the SA and contended that the Applicant and her husband availed loan facilities to a tune of Rs.20,09,710/- from the Respondent and thereafter committed default in repayment of loan outstanding dues and So, the Respondent issued demand notice u/s 13(2) of the SARFAESI Act on 13.1O.2O22 calling upon the Applicants to repay the entire outstanding dues and the said notice was served on the Applicant and her husband and the said notice was also published in daily newspapers on 19.10.0222. As there was no response to the said demand notice, the Respondent issued Possession Notice u/s 13(a) of the Act dt.08.06.2023 and the said noti blished in The New 2.06.2023. The Indian Expressand Andhra Prabh " affifi Applicant has not added ICICI vffir"i ;;'m;J s necessary party to the SA. The ResponS6n-t issueif- the po * ion notice dt.08.06.2023 in the name of thti.5o..otJl 0EftzQt" .,#ll guarantors uly followed the procedure contemplated und RFAESI Act,

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2oo2 and Rules made thereunder in issuing demand notice and possession notice against the schedule propertSr and there are no violations. AccordinglyRespondent prayed to dismiss the sA.

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Heard both sides. Now the points that arise for consideration are

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uhether tlrc Applicant has established. ang ualid ground. for setting aside the Possession Notice dt.o.06.2023 issued. bg the Respondent against the schedule propertg?

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To uhat relief ?

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Point No.(if :-

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During the course of arguments, Ld. counsel for the Applicant and Ld. Counsel for the Respondent reiterated their respective versions as stated supra.

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The undisputed facts of the case are that the husband of the Applicant by name K.Bhaskaravailed loan from the Respondent whereas the Applicant herein stood as co-applicant. There is no dispute regarding the fact that the loan account was classified as NPA in view of the default committed by the husband of the Applicant in repayment of dues. The fact that the husband of the Applicant died on 21.1O.2O22 is also not in dispute. There is also no dispute about the fact that the husband of the Applicant obtained insurance policy from ICICI prudential Life Insurance but the claim was not settled after the death of the husband of the \pplicanfutr_

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The Applicant admittedly ..reclived de t. 13. ,,1O.2022 issued by the Respondent. theli,'husband of the t^'died only after ; Appilicr:t ,J receiving the said de{and nJtigertcd{& dent filed material

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documents along with the counter filed by them. As per the said documents, it is clear that the demand notice dt.13.1O.2O22 was also published in daily newspapers and thereafter the Respondent issued possession notice dt.08.06.2o23 in the name of the borrower and guarantors. As per the office copy of the said possession notice dt.08.06.2o23, it is clear that the said notice was addressed to K.Bhaskar who is borrower and K.Padma, i.e. Applicant herein and other guarantors. It is not the case of the Respondent that^the Respondent has no information about the death of the^{borrower by the} date of issuing the said possession notice.^{Even though, the Respondent} is having knowledge of the death of the borrower,^{Bhaskar, The} Respondent issued the^possession notice in^{the name of thesaid} deceased borrower. In view of the^{death of the borrowersubsequent to} issuance of the demand notice by the^{Respondent,the Respondentis} expected to issue fresh^{demandnotice to the LRs of the deceased} borrower. But without doing^{so, the Respondentissued the impugned} possession notice dt.08.06.2023 by^{showing the borroweras alive. Thus} the possession notice dt.08.06.2023^{issuedin the name of the deceased} person is not legal, valid and the^{sameis not binding on the Applicant'}

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Point No.(ii):-

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So in the circumstances, I^{hold that the impugnedPossessionNotice} dt.08.06.2023 is liable^{to be set aside as the same is illegal and invalid.} Accordingly, this^point is answered^{in favour of the Applicantand against} the Respondent.

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In the result, SA 24012023setting aside the imPugned Possession Notice dt.o86ffi the^{Respondentagainstthe} ,r7&, 'er-1r-Be directed to isslre t:.:n schedule property. tdi;S"n"ffi, ,eN demand notice ,1",1'qtr-2)^{of.the ffinpeBst} 2OO2 to the LRs of the

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Ra;r'n#

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borrower and to all the co-borrowers and proceed in pursuance of the said demand notice. No order as to costs.

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