Allowed

Mr Amjad Abdul Rahim Shaikh v. the Muslim Co-Operative Bank Ltd.

DRT15 Apr 2024SA/258/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an applicant's challenge to actions taken under the SARFAESI Act. The tribunal found violations regarding notice publication and auction timelines, quashing the sale and agreement to sale, and ordering restoration of possession.

What did the court decide?

Application allowed; auction and sale agreement quashed; possession restored to applicants within thirty days; bank should initiate proceedings afresh.

Mr Amjad Abdul Rahim Shaikh versus the Muslim Co-Operative… — Banking and Recovery | DRT (2024)

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Presented on: 12.03.2020 Registered on: 06.06.2022 Decided on: 15.04.2024 Duration: Y M D 4 1 3

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IN THE DEBTS RECOVERY TRIBUNAL AT PUNE (Before Shri Dilip G Murumkar, Presiding Officer) SECURITISATION APPLICATION No.258/2022

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Mr. Amjad Abdul Rahim Shaikh

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Age: 40 years, Occupation : Business

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1. Mrs. Nazia Amjad Shaikh Age: 32 years, Occupation: Housewife Both Residing at: 424/425, Audyogik Vasahat, Maharshi Nagar, Gultekdi, Pune – 411 037.

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… Applicants

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Versus

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The Authorised Officer, Muslim Co-operative Bank Ltd., Having Branch at – 633, Saifi Mahal, Raviwar Peth, Pune – 411 005.

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Mr. Firoz Latifuddin Shaikh Age : 40 years, Occupation: Business R/at: 1485, Bhimpura, Lane No.13, Camp, Pune – 411 001.

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... Defendants

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APPEARANCES

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For the Applicants	Mr. Ronak Shah - Advocate
For defendant bank	Mr. Alim Ashrafi Khan – Advocate
For defendant No.2	None

(SA No258/2022)

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[KAUR]

JUDGMENT

(Delivered on 15^th April, 2024)

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By the present Securitisation Application, the applicants have challenged the action taken by defendant Bank under Section 13(4) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short) in respect of the mortgaged property and have claimed following reliefs:

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(a) This Hon’ble Tribunal may be pleased to restore possession of the said flat to the applicants.

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(b) This Hon’ble Tribunal be pleased to declare the said auction dated 29.03.2016 bad in law.

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(c) This Hon’ble Tribunal be pleased to quash and set aside the agreement to sale dated 05/04/2016 bearing no.3552/2016 executed by the Defendants herein before the Sub-Registrar, Haveli No.11, Pune.

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The averments made in the application can be summarized as under:

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In the year 2012, the applicants have taken Housing Loan from the defendant bank for purchasing suit property i.e. Flat No.401, Fourth Floor including attached terrace area

(SA No258/2022)

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[KAUR]

saleable area admeasuring about 1078 Sq.Ft i.e. 100.15 Sq.Mtrs built up in Wing “B” in the scheme known as “Big D” situated at Survey No.50/6/3A of Village Kondhwa Khurd, Pune.

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The applicants paid EMI for some period but due to financial crisis were unable to continue to pay EMI towards repayment of loan. Therefore, defendant bank initiated proceeding under the SARFAESI Act.

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It is averred that although Demand Notice dated 26^th August, 2014 u/s 13(2) was issued, the defendant bank only claimed overdue amount of Rs.3,38,177/-, though outstanding amount was different. Though, symbolic possession of the suit property was taken by the defendant bank in the month of January 2015, Possession Notice was published only in Marathi newspaper “Prabhat” dated 19^th January, 2015 and not in two newspapers as required under the SARFAESI Act.

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Further, on 28^th March, 2015 the defendant bank forcefully and illegally took possession of the suit property without following due process of law. Thereafter, Sale Notice dated 21^st March, 2016 was published only in one newspaper and

(SA No258/2022)

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[KAUR]

on 29^th March, 2016 suit property has been sold to one of the Directors of defendant bank which is illegal. Therefore, the applicants have claimed aforementioned reliefs.

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Defendant No.1 bank by filing Statement of Objection (Exhibit-6) resisted the said application.

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The following points arise for my determination and I record my findings thereon as under:

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(1) Whether the defendant bank took possession of the suit property and sold it by following due process of law provided under the SARFAESI Act?

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(2) What order?

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Findings:

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Point No.1 – In the negative

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Point No.2 – As per final order

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REASONS

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I have heard arguments of both the parties.

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As to Point Nos.1 and 2

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The learned Advocate appearing for defendant bank candidly admitted that after taking possession of the suit property, the Possession Notice was published only in one newspaper instead of two newspapers as required under

(SA No258/2022)

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[KAUR]

the SARFAESI Act. He further candidly admitted that suit property was sold before completion of thirty days as required under the SARFAESI Act as there was written consent from the applicants and Sale Notice was published only in one newspaper instead of two newspapers.

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He further candidly admitted that he would adopt procedure provided under the SARFAESI Act for recovery of outstanding amount from the applicants.

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On cursory perusal of the record and documents, it appears that in the Demand Notice issued u/s 13(2) of the SARFAESI Act only overdue amount of Rs.3,38,177/- has been claimed and whole outstanding amount has not been claimed. Further, though symbolic possession of the suit property was taken, the same was published only in one newspaper instead of two newspapers. Further, defendant bank has not produced order of District Magistrate or Chief Judicial Magistrate passed u/s 14 of the SARFAESI Act for taking physical possession of the suit property and has also not produced Possession Notice issued by Revenue Officer in pursuance of Order passed u/s 14 of the SARFAESI Act by the District Magistrate. So also, Sale Notice dated 21^st

(SA No258/2022)

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[KAUR]

March, 2016 has been published only in one newspaper and that too sale date was fixed as 29^th March, 2016, which is not thirty days as required under the SARFAESI Act. Further, suit property has been sold for price less than reserve price to one of the Directors of defendant bank.

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According to defendant bank, suit property has been sold with written consent of applicants. They have relied on written consent produced along with Statement of Objection. At this juncture, it is to be noted that Sale Notice dated 21^st March, 2016 was published much more prior to alleged written consent of the applicants in which date of sale has been mentioned as 29^th March, 2016.

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From these facts, an inference could be drawn that sale was conducted before completion of clear thirty days from the date of Sale Notice. All these procedures adopted by defendant bank is perverse in law and therefore, the applicants are entitled for reliefs as claimed.

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Therefore, by answering these points accordingly , I pass the following order:

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ORDER

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A. Securitisation Application No.258/2022 is hereby

(SA No258/2022)

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[KAUR]

allowed.

B. It is declared that auction dated 29^th March, 2016 of the suit property and Agreement to Sale dated 5^th April, 2016 executed by defendant bank in favour of defendant No.2 are hereby quashed and set aside.

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C. The defendant bank shall restore possession of the suit property to the applicants within thirty (30) days from the date of this order.

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D. The defendant bank is entitled to initiate proceeding under the SARFAESI Act afresh.

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Pronounced in open Court.

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Sd/- (Dilip G. Murumkar) Place : Pune Presiding Officer Date: 15.04.2024 Debts Recovery Tribunal, Pune

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(SA No258/2022)

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[KAUR]

Mr Amjad Abdul Rahim Shaikh v. the Muslim Co-Operative Bank Ltd.

Case brief

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Mr Amjad Abdul Rahim Shaikh v. the Muslim Co-Operative Bank Ltd.

Case brief

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