Partly allowed

Sashi Prakash Verma v. the Authorized Officer Edel Weiss Asset Reconstruction Company Limited

DRT7 Jan 2025SA/136/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed an application challenging the legality of Demand and Possession Notices and the order of the Additional Chief Judicial Magistrate granting possession to the creditor, holding the magistrate's order was administrative in nature and granting vacation of an interim order.

What did the court decide?

SA/136/2024 and IA/1117/2024 dismissed; IA/1326/2024 allowed and interim order of 30/05/2024 vacated.

Sashi Prakash Verma versus the Authorized Officer… — Contract and Commercial Disputes | DRT (2025)

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DEBTS RECOVERY TRIBUNAL – 1, KOLKATA JEEVANSUDHA BLDG. 9^TH FLOOR, 42/C, J.L. NEHRU ROAD, KOLKATA – 700071

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BEFORE SHRI AMBUJA MOHAN DAS, PRESIDING OFFICER

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SA No. 136 of 2024

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Sashi Prakash Verma

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231,BBD Bag, Hindmotor, P.S. Uttarpara,Hooghly-712 233.

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KANCHAN VERMA 231,BBD Bag, Hindmotor, P.S. Uttarpara,Hooghly-712 233.

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………….. Applicants

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Vs.

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1)AUTHORISED OFFICER,

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Edel Weiss Asset Reconstruction Company Limited. (HDB Financial Services Ltd.)

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AT Edelweiss House ,Off CST Road, Kalina,Mumbai- 400 098

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And also at

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22,Camac Street, Block ’B’, 3^rd Floor, Kolkata-700 016

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Defendant.

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Present:

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For Applicant: Mr. Sovan Kumar Dutta, Ld. Counsel

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For Defendants: Ms. Poetry Dutta, Ld. Counsel

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J U D G E M E N T

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Delivered on 7^th January, 2025

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The Sarfaesi Applicants have filed application u/s 17 of the Sarfaesi Act challenging the Demand Notice u/s 13(2) dated 17/06/2022 and Possession Notice dated 26/04/2023 and order of the Ld. Additional Chief Judicial Magistrate, Serampore, Hooghly dated 12/04/2024 alleging that the Applicants availed Loan against property to the tune of Rs. 12,16,503.00 in the years 2012 from the Defendant Bank which has assigned to Edel Weiss Asset Reconstruction Company Limited. It is contended by the Applicants that they were paying EMI but due to bad financial condition they become defaulter. Applicants have paid a sum of

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Rs. 7 lac to Defendant ARC. The Applicants approached the Defendant ARC for settlement but the Defendant ARC demanded a sum of Rs. 9,50,000/for OTS which the Applicants could not arrange and settlement failed. The Applicants have annexed the settlement offer vide Annexure ‘A’.

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It is contended by the Applicants that without serving prior Demand Notice, Defendant ARC issued Demand Notice on 17/06/2022 claiming sum of Rs. 47,39,410.19 up to 05/05/2022 which include the additional interest as well as cheque bouncing and other charges. It is alleged by the Applicants that the said notice is in contravention of Section 13(13) of the Sarfaesi Act. Thereafter, Defendant ARC issued Possession Notice. After issuance of Demand Notice the Applicant submitted a representation dated 01/06/2023 which is enclosed as Annexure ’C’.

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It is alleged by the Applicants that thereafter Defendant Bank issued Possession Notice dated 26/04/2023 which is annexed as Annexure ‘D’ and obtained order of the Ld. Additional Chief Judicial Magistrate, Serampore, Hooghly dated 12/04/2024 which is enclosed as Annexure ’E’.

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It is contended by the Applicants that from the WhatsApp message they came to know about the order of the Ld. Additional Chief Judicial Magistrate, Serampore, Hooghly dated 12/04/2024. It is also alleged that description of the property is wrongly mentioned in the order. It is also alleged that the outstanding amount is not mentioned in the order.

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It is further contended by the Applicant that Ld. Additional Chief Judicial Magistrate, Serampore, Hooghly has not given chance to the Applicant at the time of hearing for which the order dated 12/04/2024 is illegal. It is further contended by the Applicants that Ld. Additional Chief Judicial Magistrate, Serampore has not applied his mind. It is further contended by the Applicants that Defendants have contravened Rule 8(1) and 8(2) of the Security Interest Enforcement Rules,2002. The Demand Notice and Possession Notice were not properly affixed and published in leading newspapers.

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On the above pleadings the Applicant have prayed to set aside the Demand Notice dated 17/06/2022, Possession Notice dated 26/04/2023

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and order of Ld. Additional Chief Judicial Magistrate, Serampore, Hooghly dated 12/04/2024. IA/1117/2024 has been filed by the Sarfaesi Applicant with similar prayers.

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Defendant ARC has filed objection to the SA and IA denying pleadings of the Applicant. It is pleaded by the Defendant ARC that Applicant no. 1 took loan of Rs. 12,16,503/ from HDB Financial Services Ltd. under Loan against property lying and situated at Flat no. 1, 3^rd Floor, “Eliza Apartment” Phase VII measuring super built up area of 884 Sq. Ft. 231/23 BBD Road (formerly known as 146, Battala Lane P.S. Uttarpara, District Hooghly, Word No. 7. Applicant no. 2 is the co-borrower.

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Applicants have failed to pay loan amount and the account become NPA on 03/06/2014. Defendants have issued Demand Notice on 17/06/2022 and due to non-payment of the outstanding dues in the demand notice Possession Notice was issued on 26/04/2023. Applicants failed to pay outstanding dues and the Defendant published Demand Notice dated 17/06/2022 and Possession Notice dated 26/04/2023 in the newspaper which is annexed as Annexure ‘B’.

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The loan account has been assigned to Edel Weiss Asset Reconstruction Company Limited vide Assignment Agreement dated 17/02/2021 which is annexed as Annexure ‘C’.

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It is contended by the Applicants that the measures taken by the defendants ARC as well as HDB Financial Services Ltd. are illegal and prayed for dismissal of the SA and IA.

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IA/1326/2024 is filed by the Defendant ARC praying for vacation of interim order. The matter was heard on 21/11/2024.

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Perused the documents such as loan application, loan agreement. It proves that the Applicants have taken loan from the Defendant Bank and they become defaulter. Defendant ARC has issued Demand Notice and Possession Notice issued on 26/04/2023. The Applicants prayed for settlement which was accepted by defendant ARC but the applicants failed agree to pay OTS amount as demanded by the Defendant ARC

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The Applicants never objected to the Demand Notice regarding claims of the ARC. Their request for OTS makes it clear that they do not challenge the Demand Notice and Possession Notice. They are basically challenging the order of the Ld. A.C.J.M. alleging that Ld. A.C.J.M. did not permit the Applicant for hearing before passing the order. The order of the District Magistrate is basically administrative in nature. Order of the Magistrate u/s 14 of the Sarfaesi Act is to assist the Creditor to take possession of the property in furtherance of section 13(4) of the Sarfaesi Act.

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Perused the order of the Ld. Additional Chief Judicial Magistrate, Serampore, Hooghly dated 12/04/2024. It is contended by the Applicant that the description of the property is different from the property given in mortgage to the Defendant Bank by Applicant. But on perusal of the schedule in the SA as well as loan agreement and the order there is no discrepancy in the order regarding description of the property.

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Ld. Advocate for the Applicant has relied upon the authority of Hon’ble Madras High Court in the matter of P. Ramalingam & Anr. vs. S. Chandra & Ors. The authority of Hon’ble Madras High Court speaks that after order is passed, the Magistrate becomes ‘functus officio’.

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In this case there is no specific point in the order of the Learned ACJM, which the Applicant has challenged. There is no merit in the application u/s 17(1) as well in IA/1117/2024 which are liable to be dismissed. IA/1326/2024 is liable to be allowed. It is ordered as follows:

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O R D E R

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i) SA/136/2024 and IA/1117/2024 are dismissed on contest against the Defendant.

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ii) IA/1326/2024 is allowed on contest against the Applicants.

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iii) Interim order passed on 30/05/2024 is vacated.

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Copy of the Judgment/Final Order be uploaded in the

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Tribunal’s website.

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File is consigned to the Record Room.

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(Dictated to P.S., transcribed by her, corrected, signed and pronounced by me in the open Court on this the day 7^th January, 2025.

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(Ambuja Mohan Das)

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Presiding Officer

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	Order Sheet (continuation)
Case NO. SA/136/2024	Sashi Prakash Verma vs. Reconstruction Company Limited.	Edel	Weiss	Asset
Date of the Order	Order with Signature			Office action with date and dated Signature of Parties when necessary

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07/01/2025	Present:
	For Applicant: Mr. Sovan Kumar Dutta, Ld. Counsel
	For Defendants: Ms. Poetry Dutta, Ld. Counsel
	Heard Ld. Counsels for the parties on 21/11/2024. The detailed order in five pages annexed separately. The gist of the order is as follows:
	O R D E R
	i) SA/136/2024 and IA/1117/2024 are
	dismissed on contest against the Defendant.
	ii) IA/1326/2024 is allowed on contest against the Applicants.
	iii) Interim order passed on 30/05/2024 is vacated.
	Copy of the Judgment/Final Order be uploaded in the Tribunal’s website.
	File is consigned to the Record Room.
	(Dictated to P.S., transcribed by her, corrected, signed and pronounced by me in the open Court on this the day 7^th January, 2025.
	(Ambuja Mohan Das) Presiding Officer

Sashi Prakash Verma v. the Authorized Officer Edel Weiss Asset Reconstruction Company Limited

Case brief

What is this about?

What did the court decide?

Sashi Prakash Verma v. the Authorized Officer Edel Weiss Asset Reconstruction Company Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

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