Dismissed

Bale Ram alias Balram Singh v. Indiabulls Housing Finance Ltd.

DRT25 Jan 2024SA/246/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed a securitisation application challenging the enforcement of a secured agreement. Applicants alleged procedural violations, arbitrary duess, and improper auction valuation. The court found no substantial prejudice from alleged trivial procedural lapses, citing precedent, and dismissed the application with costs.

What did the court decide?

The securitisation application was dismissed with costs. The Sale Confirmation Letter and enforcement proceedings were upheld.

Bale Ram alias Balram Singh versus Indiabulls Housing Finance… — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK

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SECURITISATION APPLICATION NO.246/2023 DATE OF INSTITUTION: 19.10.2023 DATE OF DECISION: 25^th DAY OF JANUARY, 2024

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Sh. Bale Ram @ Balram Singh aged about 51 years, son of Sh. Rumal Singh

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Smt. Kaushalya aged about 52 years, w/o Sh. Balram Singh: Both residents of Plot No. 366, Block-D, Sushant Lok Phase II, Tehsil Sohna, District Gurugram, now residing at H. No. 19, Sector 55, Village Ghata, Tehsil Sohna, District Gurugram, Haryana

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……Applicants

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Versus

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Indiabulls Housing Finance Limited having its registered office at 5^th Floor, Building No. 27, Kasturba Gandhi Marg, Connaught Place, New Delhi, through its Managing Director

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Authorised Officer, Indiabulls Housing Finance Limited having its Branch office at SCO No. 337-338, Sector 35-B, Chandigarh

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....Respondents

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Argued by: Sh. Nitin Sherwal Advocate for the applicants (SA) (through VC) Ms Sangeeta Sondhi Narula Dalal Advocate for the respondents (through VC)

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FINAL ORDER

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This Securitisation Application has been filed under Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the Act' for brevity).

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In brief, it is the case of the applicants that the applicants took loan against house bearing plot No. D-366, Block-D, Sushank Lok, Phase-II, Gurugram, for a sum of Rs. 47,12,512/- which was sanctioned vide letter dated 27.06.2017; that the applicants paid the instalments on 5^th of every month from bank account bearing No. 523221991008874

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SA/246/2023 SH. BALE RAM @ BALRAM SINGH AND ANOTHER VS INDIABULLS HOUSING FINANCE LIMITED AND ANOTHER

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maintained with Punjab National Bank, Branch AIT, Sector-56, Gurugram and if the EMIs were not deducted from the account due to any reason, the agents of the respondent FI used to visit the house of the applicants and collect the instalments in cash; that the loan account of the applicants turned NPA on 13.06.2022; that notice dated 14.06.2022 under Section 13(2) of the Act was issued; that the secured asset of the applicants was put to auction for 20.02.2023 vide sale notice dated 13.01.2023; that confirmation letter of the sale was issued to the auction purchaser; that the applicants had no knowledge of the sale; that the applicants deposited an amount of Rs. 62,857/- on 17.02.2023 and Rs. 1,20,200/- on 20.02.2023 but despite that the respondent FI confirmed the sale and issued confirmation letter dated 21.02.2023; that the applicants filed Civil Suit against notice dated 13.01.2023; that thereafter, the applicants filed CWP No. 10602 of 2023 seeking quashing of notice dated 14.06.2022, notice of sale dated 13.01.2023 and letter of confirmation dated 21.02.2023; that the CWP was withdrawn as statement was made on 04.09.2023 that the proceedings under the Act including notices under Sections 13(2) and 13(4) of the Act and sale notices were withdrawn; that on the next day of order dated 04.09.2023, the respondents pasted notice dated 22.06.2023 under Section 13(2) of the Act and notice dated 05.09.2023 under Section 13(4) of the Act mentioning that the loan account of the applicants was classified as NPA on 06.04.2023 showing an amount of Rs. 55,89,744.91/- outstanding as on 22.06.2023; that thereafter, the respondents issued sale notice dated 23.09.2023 for auction of the secured asset on 31.10.2023 keeping the reserve price as Rs. 69,25,000/- against the outstanding recovery of Rs. 55,59,543/-; that the loan account of the applicants was classified as NPA on 06.04.2023 despite the fact that the same was NPA since 13.06.2022 and it was not regularised/standardised; that different amounts were paid by the applicants since 13.06.2022 and total sum of Rs. 7,62,237/- was paid till 23.08.2023; that letter dated 13.09.2023 was issued to applicant No. 1 whereby total amount payable was calculated as Rs. 55,44,596.99/- and the said amount included Rs. 1,38,685.94/- as foreclosure charges and thus, it was totally illegal and arbitrary; that pending instalments had been shown as Rs. 3,08,669/- but no adjustment of the payments made had been given; that an amount of Rs. 3,75,903.13/- had been shown as other charges without giving any bifurcation or justification; that amount was shown as Rs. 55,59,543/- in

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SA/246/2023 SH. BALE RAM @ BALRAM SINGH AND ANOTHER VS INDIABULLS HOUSING FINANCE LIMITED AND ANOTHER

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sale notice dated 23.09.2023; that the instalments were raised to 481 month from 180 month and rate of interest was raised to 16.5 per cent whereas sanctioned rate of interest was 10.5 per cent; that no opportunity was granted to the applicants to regularise the loan account; that service was not effected upon the applicants and only affixation was done; that the sale notice was liable to be set aside on the ground that the auction was held at a throwaway price of Rs. 69,25,000/- whereas the property situated was at prime location and value of that property was more than of Rs. 1.5 crore; that there was violation of Rule 8(5) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as the ‘Rules of 2002’ for brevity ) as no valuation from the approved valuer was obtained; that there was violation of Rule 8(7) of the Rules of 2002; that the secured asset was not registered with CERSAI; that notice dated 28.12.2023 for taking physical possession of the secured asset was served upon the applicants which was illegal because order dated 08.12.2023 was not served upon the applicants; that notice dated 28.12.2023, was not accompanied by judicial order dated 08.12.2023 and notice was not prepared as per Appendix IV of the Rules of 2002.

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Reply to the SA was filed wherein inter alia it was contended that the rate of interest was bound to change; that on account of variation in rate of interest, the EMIs in value or in number, were liable to be changed; that the applicants had opted for floating rate of interest which was liable to be changed; that the respondents had also registered a charge over the secured asset on CERSAI website; that the loan account of the applicants was classified as NPA on 13.06.2022 owing to consecutive default of 90 days; that on 05.09.2023, symbolic possession notice was issued under Section 13(4) of the Act and symbolic possession was taken; that notice for symbolic possession was affixed on the secured asset on 05.09.2023 and also it was published in two leading newspapers on 09.09.2023; that the said notice was also sent through registered courier; that on 23.09.2023, the respondents issued sale notice for auction of the secured asset on 31.10.2023; that sale notice was affixed on the conspicuous place of the secured asset and the same was also published in two leading newspapers; that the notice was also sent through registered post on 23.09.2023; that valuation of the secured asset was also conducted before fixing the reserve price; that sanction

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SA/246/2023 SH. BALE RAM @ BALRAM SINGH AND ANOTHER VS INDIABULLS HOUSING FINANCE LIMITED AND ANOTHER 4

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letter dated 27.06.2017 also granted liberty to increase the rate of interest on the basis of change in the prime lending rate and therefore, the change in the tenure of the EMIs was well in consonance with sanction letter dated 27.06.2017; that after issuance of notice on 22.06.2023, ten instalments became due and payable out of which, the applicants paid four instalments on 23.08.2023 and on 24.08.2023 which were duly adjusted; that status of the loan was shown as active as the loan was still overdue and the account was open and valuation report dated 07.09.2023 was obtained from a registered valuer, contrary to which, there was no valuation report. Rest of the averments of the SA were also denied in reply to the SA.

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I have heard learned counsel for the parties and also gone through the record carefully.

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It was argued by the learned counsel for the applicants that no withdrawal of the earlier notice was ordered. When a new notice is issued, there is no requirement of withdrawal of the earlier notice and it has to be assumed that the earlier notice stood withdrawn. It was further argued by the learned counsel for the applicants that name of the Authorised Officer was not mentioned in the notice. This argument is beyond the sphere of the pleadings. Learned counsel further argued that notice under Section 13(4) of the Act was not received by the applicants. When the counsel was asked to support this argument from the pleadings, he pointed out para No. G of the SA but nothing of that sort has been mentioned in the same rather it has been admitted that notice dated 05.09.2023 under Section 13(4) of the Act was pasted outside the secured asset.

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In para No. R of the SA, affixation has been admitted. It has been mentioned further that the notice in the newspapers was not published. Per contra , learned counsel for the respondents argued that the notice for possession was published in two leading newspapers.

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It was argued by the learned counsel for the respondents that on 09.09.2023, possession notice was published in newspapers Business Standard English and Hindi edition. There is merit in the argument advanced by the learned counsel for the respondent FI in this regard.

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Para No. 4(a)(Y) being relevant is reproduced below for facilitative reference:

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SA/246/2023 SH. BALE RAM @ BALRAM SINGH AND ANOTHER VS INDIABULLS HOUSING FINANCE LIMITED AND ANOTHER

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“That an impugned notice dated 28.12.2023 has been served upon the applicants intimating that one Rahul Kumar Advocate will visit the premises in question on 29.01.2024 for taking physical possession and shall visit the premises on 12.01.2024 for affixation of the said impugned notice. Copy of the impugned notice of possession dated 28.12.2023 is annexed herewith as Annexure A-14”

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The above reveals that the receipt of possession notice has been admitted.

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Nothing has been mentioned in the pleadings that personal notice with regard to symbolic possession was required to be served and the same was not served upon the applicants.

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It was argued by the learned counsel for the applicants that order of Chief Judicial Magistrate, Gurugram, was not there with the possession notice. Per contra , it was argued by the learned counsel for the respondent FI that the order of the Chief Judicial Magistrate was duly attached with the possession notice. Even if it is assumed that the order of the learned Chief Judicial Magistrate was not attached with the possession notice, it could not be explained away as to what prejudice was caused to the applicants in this regard especially when the particulars of the order have been mentioned in the notice itself.

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It was argued by the learned counsel for the applicants that the account was wrongly classified as NPA and the amount of Rs. 7,62,237/which was paid by the applicants since 13.06.2022 was not adjusted against the pending instalments. It was argued on behalf of the respondent FI that the amount was adjusted against the past dues. The fact of the matter is that the above said amount has been paid and adjusted in the loan account. It is for the respondents to see as to how the same was to be adjusted and the applicants cannot dictate the respondents in this regard. 6. No other point was urged before this Tribunal.

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It was held in the case of “ M/s L&T Housing Finance Limited Vs. M/S Trishul Developers and Another,” in Civil Appeal No(s).3413 of 2020 (arising out of SLP (c) No(s). 18360 of 2019) decided on 27.10.2020,

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“That the proceedings under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, cannot be held to be bad in law merely on raising an trivial objection which has no legs to stand unless the person is able to show any substantial

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SA/246/2023 SH. BALE RAM @ BALRAM SINGH AND ANOTHER VS INDIABULLS HOUSING FINANCE LIMITED AND ANOTHER

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prejudice being caused on account of procedural lapse as prescribed under the Act or the rules framed thereunder still with a caveat that it always depends upon the facts of each case to decipher the nature of the procedural lapse being complained of and the resultant prejudice, if any, being caused and there cannot be a straitjacket formula which can be uniformly followed in all the transactions.”

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In view of the above discussion, there is no merit in the SA and same is hereby dismissed with costs.

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Pronounced in the open Tribunal

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(M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Bale Ram alias Balram Singh v. Indiabulls Housing Finance Ltd.

Case brief

What is this about?

What did the court decide?

Bale Ram alias Balram Singh v. Indiabulls Housing Finance Ltd.

Case brief

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