Dismissed

Laxmi Chaudhary v. Icici Bank Limited

DRT1 Jan 2024SA/283/2023

Case brief

AI extract

What is this about?

Appearing as indebted borrowers, applicants challenged the securitisation application filed by ICICI Bank regarding a home loan NPA. The court dismissed the challenge, holding that the lack of a specific 15-day notice was directory and not mandatory, noting no substantial prejudice was caused. The application was rejected as meritless.

What did the court decide?

Securitisation Application dismissed with costs; no possession order quashed.

Laxmi Chaudhary versus Icici Bank Limited — Contract and Commercial Disputes | DRT (2024)

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

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SECURITISATION APPLICATION NO.283/2023

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DATE OF INSTITUTION: 07.11.2023

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DATE OF DECISION: 1^st DAY OF JANUARY, 2024

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Smt. Laxmi Chaudhary w/o Sh. Lallan Kumar Chaudhary, aged 42 years, House No. 980 V Police Chowki, Sector 21 D, Haryana, Faridabad-121012 (Pan Card No. AEHPLL6896E)

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Sh. Lallan Kumar Chaudhary s/o Sh. Ramghyan Chaudhary, aged 48 years, House No. 980 V Police Chowki, Sector 21 D, Haryana, Faridabad-121012 (Pan Card No. AFHPC4622C)

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….. Applicants

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Versus

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ICICI Bank Limited, through its Authorised Officer, 3^rd Floor, Plot No. 23, Near Rohtak Road, Karolbagh, New Delhi-110005

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…..Respondent

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Argued by: Sh. Devender Rattan Advocate for the applicants (SA) Sh. Rahul Garg Advocate for the respondent bank

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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 are the borrowers for the home loan for construction of the house and they are owner of House No. 980 V.P. Sector 21D, Urban Estate, Faridabad, Haryana, measuring 90 square meters; that loan of Rs. 65,90,000/- was

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SA/283/2023 LAXMI CHAUDHARY AND ANOTHER VS ICICI BANK LIMITED 2

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availed of vide loan agreement dated 29.07.2019; that the applicants also availed of home top up loan against the property in question to the tune of Rs. 17 lac on 30.07.2019; that the above stated residential house was mortgaged with the respondent bank; that due to outbreak of pandemic Covid-19, the applicants Firm failed to carry out the business activities (in fact, there is no applicant Firm); that applicant No. 1 was suffering from severe illness and applicant No. 2 had to spend a lot of money on the treatment of his ailing wife in different hospitals and thus, they were unable to pay the EMIs; that demand notice dated 31.05.2021 was issued and the same was not withdrawn despite request made by the applicants; that possession notice dated 20.10.2023 was received from the Receiver on 25.10.2023 for taking physical possession on 07.11.2023; that there was no clear intimation from the Receiver for a period of 15 days; that the applicants had received possession notice dated 14.12.2023 issued by the Receiver on 21.12.2023 for taking physical possession of the secured asset wherein 15 days’ notice was necessary in view of order dated 07.10.2023 passed by the learned Chief Judicial Magistrate, Faridabad, for taking physical possession of the secured asset; that the loan account was wrongly classified as NPA; that possession notice was not issued by the Authorised Officer; that possession notice dated 14.12.2023 was received on 21.12.2023 and notice was not affixed on the main door or other conspicuous part of the property in question.

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Reply to the SA was filed by the respondent bank wherein inter alia it was contended that the cheques given by the applicants against the monthly instalments had been regularly bouncing since the Year 2019 due to insufficient funds; that the applicants were irregular in payment of the monthly instalments even prior to the outbreak of pandemic Covid-

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SA/283/2023 LAXMI CHAUDHARY AND ANOTHER VS ICICI BANK LIMITED 3

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19; that the applicants did not approach the respondent bank on receipt of the notice under Section 13(2) of the Act and the applicants had only deposited Rs. 24,000/- in July 2021. Rest of the averments made in the SA were also denied in reply to the SA.

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I have heard the arguments advanced by both the sides and also gone through the record carefully.

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It was argued by the learned counsel for the applicants that a clear notice of 15 days was not served upon the applicants for taking possession of the secured asset which was fixed for tomorrow, i.e. 02.01.2024. It was argued by Sh. Rahul Garg Advocate that the notice was duly pasted on the secured asset on 14.12.2023 and it was sent through registered post which was received by the applicants on 21.12.2023. It was further argued by Sh. Rahul Garg Advocate that service of 15 days notice for taking possession of the secured asset was not sine qua non .

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Learned counsel for the respondent bank in this regard placed reliance upon the order of the Hon’ble High Court in the case of ‘Ram Krishan Goyal Vs Suresh Kumar and Others’ in COCP No. 3181 of 2023(O&M) decided on 21.11.2023, wherein inter alia it was held as under:

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“The directions are on the scope of the functions of the District Magistrate. So far as Clause-VI above is concerned, the High Court has made observations that it would be desirable that at least fifteen days advance notice be served on the occupant. However, the same cannot be treated to be mandatory. While it is true that in some cases where general directions are issued by the Hon’ble Supreme Court or by this Court, the same are binding on all the authorities including subordinate

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SA/283/2023 LAXMI CHAUDHARY AND ANOTHER VS ICICI BANK LIMITED 4

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Courts. Violation whereof can invite contempt proceedings under Article 215 of the Constitution of India. However, if the observations are more akin to suggestion, the same are directory in nature and would not be enforceable”

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In view of the above order, the observations with regard to notice of 15 days, being held directory in nature and being not enforceable, no fault for not serving the notice 15 days before the date of taking possession, can be found with the securitization proceedings for facilitating the quashing of those.

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There is no merit in the argument of Sh. Davender Rattan Advocate that the learned Chief Judicial Magistrate had mentioned in his order about the time of 15 days. In the considered opinion of this Tribunal, the learned Chief Judicial Magistrate had mentioned so in view of the order of the Hon’ble High Court which has been subsequently interpreted by the Hon’ble High Court in the order quoted above.

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It was argued by the learned counsel for the applicants that possession notice was never served by the Authorised Officer and in terms of Appendix 4 of the Security Interest (Enforcement) Rules, 2002 and by affixing the possession notice. It was argued by Sh. Rahul Garg Advocate that receipt of the possession notice was mentioned in the pleadings on behalf of the applicants whereby it was mentioned that possession notice was received on 25.10.2023 through registered post for taking physical possession of the secured asset on 07.11.2023. There is no merit in the argument that possession notice was bad because it was given by the Receiver. After all, the Receiver had acted on the application of the Authorised Officer only. It was argued by the learned counsel that possession notice dated 08.04.2022 was not served upon applicant No. 1.

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SA/283/2023 LAXMI CHAUDHARY AND ANOTHER VS ICICI BANK LIMITED 5

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Since no possession was taken in pursuance of that possession notice, the argument is without any merit.

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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 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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No other point was urged before this Tribunal.

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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

Laxmi Chaudhary v. Icici Bank Limited

Case brief

What is this about?

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Laxmi Chaudhary v. Icici Bank Limited

Case brief

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