Disposed

Umesh Sud v. Housing Development Finance Corporation Ltd.

DRT24 Jul 2024SA/75/2022

Case brief

AI extract

What is this about?

On a securitization application challenging a possession notice, the Debts Recovery Tribunal held that since original title deeds remain with the creditor and the original borrower is repaying dues, the applicant cannot claim to be a bona fide purchaser. The court disposed of the application upholding the creditor's charge.

What did the court decide?

Respondent No.1 retains charge over the secured asset; free to recover dues by sale if Respondent No.2 defaults.

Umesh Sud versus Housing Development Finance Corporation Ltd. — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA No. 75 of 2022 UMESH SUD

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VERSUS

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HOUSING DEVELOPMENT FINANCE CORP. LTD AND ANOTHER

24.07.2024

Item No. 02

Present:

Sh. Gurmehar Gandhi, proxy for Sh.RC Sharma, Counsel for the Applicant. Sh.RS Balhara, Counsel for Respondent No.1/Financial Institution. None for Respondent No.2/Naveen Khanna.

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Umesh Sud (Applicant) has filed this Securitization Application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), against Housing Development Finance Corporation (HDFC) and another (Respondents).

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Admittedly, vide sanction letter dated 25.10.2023, Respondent No.1 had sanctioned credit facilities of Rs.25,43,546/- to Respondent No.2. Again on 18.12.2014, Respondent No.1 had sanctioned Rs.6 lacs to Respondent No.2. To secure these loans, Respondent No.2 had created security interest in respect of Ground Floor of three storied building called Vally Vie, comprised in Khasra No.630, Khata/Khatoni No.89 min/195 min, measuring 235.14 sq. mtrs, situated at UP Mohal Kaithu II, Tehsil and District Shimla, having total covered area 130.50 sq. mtrs alongwith construction thereon, in favour of Respondent No.1. Applicant states that in the year 2018, he had purchased the said property from Respondent No.2, on the basis of a photocopy of the sale-deed. Respondent No.2 never disclosed this fact to him that he had created security interest of this property, in favour of Respondent No.1. Applicant claims that he is a bona fide purchaser of this property and he had also checked up the revenue record and there was no mention regarding any charge over the said property. However, now Respondent No.1 has pasted the possession notice on the secured asset. Accordingly, Respondent No.1 be restrained from enforcing the security interest.

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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Respondent No.1, in the reply, has alleged that Respondent No.2 had created security interest in its favour to secure the said loan by depositing the original title deeds with it. The original title deed is still lying with Respondent No.1. Accordingly, Applicant cannot claim that he is a bona fide purchaser of the property.

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I have heard Mr.Gurmehar Singh, counsel for the Applicant and Mr.RS Balhara, counsel for Respondent No.1. Nobody has put in appearance on behalf of Respondent No.2.

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It is admitted on the record that the original title deeds are still lying with Respondent No.1. In these circumstances, Applicant cannot claim that he is a bona fide purchaser of the property. It is stated that Applicant had also filed a complaint against Respondent No.2 and Respondent No.2 had also filed an affidavit before the police that he would make the payment of the loan amount. Mr.Balhara, counsel for Respondent No.1 admits that Respondent No.2 is making the payment of the loan amount regularly.

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In view of this, the present SA stands disposed of and it is hereby ordered that the Respondent No.1 has charge over the secured asset. In case, Respondent No.2 fails to make the payment of the loan, Respondent No.1 would be free to recover its dues by sale of secured asset. All the pending IAs, if any, are also disposed of, accordingly.

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Registrar is directed to send a copy of this order to all the parties, as per rule. Thereafter, file be consigned to record room after due compliance.

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Pronounced in open court. MANOJ/24.07.2024

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(A S Narang) Presiding Officer DRT-I, Chandigarh

Umesh Sud v. Housing Development Finance Corporation Ltd.

Case brief

What is this about?

What did the court decide?

Umesh Sud v. Housing Development Finance Corporation Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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