Dismissed

Mrs Sonia Banerjee v. Reliance Asset Reconstruction Company Limited

DRT20 Jan 2024SA/307/2023

Case brief

AI extract

What is this about?

Applicant borrower challenged recovery proceedings under the Securitisation Act, alleging unfair increase in interest without intimation. The Tribunal held that interest was floating by agreement and respondent caused no substantial prejudice, dismissing the application.

What did the court decide?

The Securitisation Application was dismissed with costs against the applicant.

Mrs Sonia Banerjee versus Reliance Asset… — 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.307/2023

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DATE OF INSTITUTION: 22.11.2023

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DATE OF DECISION: 20^th DAY OF JANUARY, 2024

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Smt. Sonia Banerjee aged about 64 years w/o Sh. Pranab Banerjee r/o Apartment-061, Wing-M, 60^th Floor, Building Ridgewood Estate, DLF Phase-V, DLF City, Gurgaon, Haryana

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….. Applicant

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Versus

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Reliance Asset Reconstruction Company Limited, through its Authorised Officer, A3/1, 6^th Floor, Synergy Tower, Sector-62, Noida Registered Address: 11^th Floor, North Side R-Tech Park, Western Express Highway, Goregaon East, Mumbai City, Office Address: Reliance Centre, 6^th Floor, North Wing, Near Prabhat Colony, Off Western Express Highway, Santacruz

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…..Respondent

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Argued by: Sh. Vimal Kumar Gupta Advocate for the applicant (SA) (through VC) Ms Usha Singh Advocate for the respondent ARC

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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 applicant that the applicant took term loan of Rs. 40,65,000/- from the predecessor-in-interest of the respondent; that EMIs were to be paid in 180 months; that as per loan agreement, the predecessor-in-interest of the respondent was to inform the borrower in writing of any change in interest; that the applicant paid

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SA/307/2023 SONIA BANERJEE Vs RELIANCE ASSET RECONSTRUCTION COMPANY LIMITED 2

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all the EMIs without any default for nearly 10 years; that thereafter, the EMI amount was revised several times and enhanced to Rs. 38,093/- and then to Rs. 40,668/- and the new rate of interest was @11.74%; that in September October 2011, the respondent raised the EMIs to Rs. 41,847/which was also paid by the applicant; that no intimation was given to the applicant with regard to the increase in the interest; that the applicant was intimated that principal outstanding amount due and payable was still Rs. 33,21,598.15/- as on 06.05.2015; that an amount of Rs. 10 lakh over and above the principal amount had already been repaid by the applicant; that despite that, the respondent continued claiming Rs. 80 lakh plus additional interest on the said amount; that respondent No. 1 invoked arbitration against the applicant; that the husband of the applicant filed Civil Writ Petition which was disposed of vide order dated 01.08.2016; that NHB thoroughly examined the representation of the applicant and also extensively heard the representatives of the respondent and vide order dated 19.10.2016 rendered a categorical finding that the action of respondent was in complete violation of NHBs Guidelines on fair practice for housing finance Companies; that notice under Section 13(2) of the Act was not received; that the applicant was under the bona fide belief that settlement talks were going on with respondent No. 1; that immediately, the applicant approached the Hon’ble High Court vide Civil Writ Petition No. 22103 of 2020 on 21.12.2020; that the Hon’ble High Court directed the applicant to deposit Rs. 10 lakh within 1 month and status quo regarding possession was ordered and during the pendency of the SA, respondent affixed copy of notice dated 20.12.2023 in the first week of January 2020 on the residential house of the applicant for taking physical possession on 23.01.2024.

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Reply to the SA was filed by the respondents wherein inter alia it was contended that the applicant was well aware of the banking norms as she was the ex-employee of the GE Money Housing Finance; that the agreement stipulated that the loan would be disbursed on a floating rate of interest, which would enable GEMHF to vary or alter the rate of interest, tenure of the loan and other charges at its sole discretion; that being the ex-employee of the GEMFH (Predecessor/Assignor), the applicant had knowledge of the fact that the floating rate of interest moved up and ran with the market or an index and despite knowing this

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SA/307/2023 SONIA BANERJEE Vs RELIANCE ASSET RECONSTRUCTION COMPANY LIMITED 3

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fact, the applicant had raised this issue with mala fide intention and approached this Tribunal; that the applicant had not even filed any objection under Section 13(3A) of the Act and approached this Tribunal with ulterior motive; that the present loan account got assigned to respondent No.1 by ‘Magma Housing Finance Limited’ vide Assignment Deed dated 24.03.2017; that the applicant along with her husband had jointly approached the assignor for availing of loan facilities which were granted to the applicant and her husband on the basis of security documents duly signed and executed to secure the said facilities; that the applicant was well aware that the loan was granted on floating rate of interest; that the applicant was duly aware of the new rate of interest which had been duly admitted by the applicant in para Nos. 3, 4 and 5 of the SA; that the EMIs were raised from time to time and no objection was ever raised by the applicant at any point of time; that it was denied that no intimation was given to the applicant regarding the new rate of interest as the applicant had duly admitted in para Nos. 3, 4 and 5 of the SA regarding the increased interest rate; that as evident from the letters placed on record by the applicant herself along with SA, it was clear that intimation regarding change in interest rate was well within the knowledge of the applicant; that despite admittedly receiving the demand notice under section 13(2) of the Act, the applicant chose not to file any objection under section 13(3A) of the Act; that the applicant had approached this Tribunal with unclean hands and further with ulterior motives to delay and hamper the recovery measures initiated by the assignor/respondent No. 1; that all the measures had been initiated by the respondent in accordance with the parameters of law for recovery of its outstanding dues in respect of the facilities granted to the applicant being the borrower and her husband being the co-borrower; that the applicant had been duly notified about the possession vide pre-possession notice dated 20.12.2023, which had been duly acknowledged and received by the applicant herself and all the contentions and allegations raised by the applicant were based on conjectures and surmises. Rest of the averments made in the SA were also denied in reply to the SA.

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Replication to the reply to the SA was filed wherein the averments made in the SA were reiterated and that of the reply to the SA were controverted.

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SA/307/2023 SONIA BANERJEE Vs RELIANCE ASSET RECONSTRUCTION COMPANY LIMITED 4

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

¶22

It was argued by the learned counsel for the applicant that no intimation whatsoever, was given to the applicant with regard to the change of interest. Per contra , it was argued by Ms Usha Singh Advocate that there was change in the rate of interest as the rate of interest was floating and not static. Even if it is assumed for a while that no such intimation was given to the applicant by the respondent ARC, the communication could be made by the applicant with the respondent ARC about non-receipt of such intimation.

¶23

The argument of the learned counsel for the respondent ARC that letters placed on record by the applicant herself along with SA made it amply clear that the intimation regarding the change in the rate of interest was well within the knowledge of the applicant, cannot be brushed aside outrightly.

¶24

No other point was urged before this Tribunal.

¶25

It was held in the case of ”M/s L&T Housing Finance Limited

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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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SA/307/2023 SONIA BANERJEE Vs RELIANCE ASSET RECONSTRUCTION COMPANY LIMITED 5

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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

Mrs Sonia Banerjee v. Reliance Asset Reconstruction Company Limited

Case brief

What is this about?

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Mrs Sonia Banerjee v. Reliance Asset Reconstruction Company Limited

Case brief

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