Dismissed

A Shanmugam v. Repco Home Finance Limited

DRT4 Nov 2024SA/471/2024

Case brief

AI extract

What is this about?

In a SARFAESI application, the DRT dismissed the challenge against an order of the Civil Judge rejecting the bank's claim for possession. Relying on Supreme Court precedents, the court held that the proceeding was administrative and ministerial. Since the borrower lost redemption rights upon the registered sale, the impugned order stood confirmed.

What did the court decide?

SA dismissed; parties to bear their own costs.

A Shanmugam versus Repco Home Finance Limited — Arbitration | DRT (2024)

SA No.471/2024 (C)

04.11.2024

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 4^th day of November, 2024

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Present: SHRI A. S. JAYACHANDRA Presiding Officer (In – charge)

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SARFAESI APPLICATION No.471 of 2024

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A. Shanmugam S/o Mr. Adimoolam Door No.2/101, SLR New Colony Poonga Nagar, Plot No.78 Eraiyur Post, Veppanthattai Taluk Perambalur District – 621 133

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….Applicant

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-Vs-

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M/s Repco Home Finance Limited Rep. by its Authorised Officer (Chief Manager) Venkatesapuram Perambalur – 621 212

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….Defendant

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Counsels on record / appeared:

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Counsel for Applicant : M/s. T.S. Rajeev Gandhi Counsel for Defendant : M/s. A. Ilangovan

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:- ORDER -:

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Applicant challenges the order dated 12.06.2024 in CMP No.285/2024 on the file

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of Ld. CJM, Perambalur. The applicant herein is the 1^st respondent before the Ld.CJM.

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The case of the applicant is that he availed the Housing Loan in the year 2013 and was paying the EMIs regularly and he is residing in the schedule property. He was approaching the bank to permit him to redeem the mortgage, however the impugned orders are obtained by the bank.

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The grounds to challenge the impugned order is that, the same is bad in law, applicant does not own any other property and that the bank has not issued the demand

SA No.471/2024 (C)

04.11.2024

and possession notice, no mandatory affidavit is filed before the Ld. CJM and false information is furnished to the Ld. CJM

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Upon notice, the defendant appeared and filed its counter along with the documents. It is contended that the demand notice dated 13.06.2019 was duly served and the borrowers evaded the payment. Thus, possession notice dated 26.11.2019 was issued and symbolic possession was taken. As per the possession notice, the dues were Rs.16,27,001/- along with interest. The same is in total compliance of the Security Interest (Enforcement) Rules, 2002. This applicant did not stick to his assurances to regualrise the loan. Hence sale notice dated 16.12.2022 was issued, fixing the sale for 24.01.2023 by complying with all the provisions of the Act and the Rules. One successful bidder C. Velladurai emerged and the same was sold for Rs.27,95,000/- and sale certificate was issued on 19.05.2023 and the same was properly registered. The balance of Rs.1,28,277/- is yet to be cleared after adjusting the sale proceeds. There is no merit in the present SA.

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The applicant had suppressed the facts of the sale notice, the completion of sale, the sale certificate and the material facts. Applicant had lost the right of redemption under Section 13(8). The applicant suppressed the fact and projected as though the loan amount arrears is Rs.1,28,277/- only. The orders of the Ld. CJM does not suffer from any infirmities. Thus the defendant prays for dismissal of the SA.

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Perused the pleadings and documents on either side and also heard the Ld. Counsel from both the sides.

SA No.471/2024 (C)

04.11.2024

The only point that arises for consideration is:

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Whether the impugned order of the Ld. CJM is liable to be

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set aside on the ground of the legal infirmities or not?

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It is to be kept in mind that in Indian Bank Vs. Vishalakshi and another CA 6295/2015 dt.23.09.2019 SC , it is held that the proceedings of the Ld. CJM is only a procedural step and purely an administrative order. No adjudicatory process is involved.

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Further, the provisions of Section 14 of the SARFAESI Act is only a remedial measure available to the secured creditor and the orders passed there under are essentially ministerial steps. No justiciability is involved.

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However, the considering the grounds urged, the counter and the documents furnished by the other side is examined. The first ground is that the defendant institution has not filed the mandatory affidavit before the Ld. CJM. The copy of the affidavit filed before the Ld. CJM is furnished by the defendant bank at page No.80 which is duly sworn into by the Authorised Officer. Therefore, this ground urged is belied.

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The other contention is that the defendant institution has not issued the demand notice and possession notice. In the list of documents furnished, copy of the demand notice dated 13.06.2019 is furnished. Copies of the postal acknowledgment are also filed, which this Tribunal has perused. Likewise, the possession notice dated 26.11.2019, its acknowledgments and the publications effected on 28.11.2019, along

SA No.471/2024 (C)

04.11.2024

with the affixture photographs of the same are also furnished by the defendant institution.

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Further, the defendant institution has taken up a contention that the applicant had suppressed the fact of sale of the property. After filing of the counter, in which the aspect is revealed, the applicant has not disputed the sale of the property, for which the sale certificate has been duly registered on 19.05.2023 vide document No.2106/2023.

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The applicant had not whispered about the concluded sale in the present petition. In view of the ruling of the Hon'ble Supreme Court in Celir LLP Vs. Bafna Motors , the right of the borrower to redeem was available till the sale or transfer of the secured asset as per Section 13(8) of the SARFAESI Act. The applicant having lost the title now cannot be allowed to squat on the property especially in view of no justiciable question that comes up before the Ld. CJM in passing the impugned orders.

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For the aforesaid reasons, this Tribunal is of the considered opinion that the orders of the Ld. CJM does not suffer from any illegality or infirmity.

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Consequently, the following order

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SA stands dismissed. Parties to bear their own costs.

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Order be communicated to the parties as per Rules.

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Sd/(A.S. JAYACHANDRA) PRESIDING OFFICER (In-charge)

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced in Open Court, on this 4^th day of November, 2024)

A Shanmugam v. Repco Home Finance Limited

Case brief

What is this about?

What did the court decide?

A Shanmugam v. Repco Home Finance Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Cases cited

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