Dismissed

Amarjit Kaur v. Pegasus Assets Reconstruction Pvt. Ltd. and others

DRT27 Jun 2025SA/164/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed a securitization application challenging demand and possession notices under the SARFAESI Act. The Tribunal upheld the notices as properly served and ruled that the Tribunal lacks authority to delay proceedings due to the lack of a settlement offer from the secured creditor or due to pending insurance/claims matters.

What did the court decide?

Securitization Application dismissed; any other pending interim applications disposed of accordingly.

Amarjit Kaur versus Pegasus Assets Reconstruction Pvt. Ltd… — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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PRESIDED OVER: SH. MRIDULESH KUMAR SINGH

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SECURITIZATION APPLICATION NO.164/2023

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Date of Institution: 14.08.2023

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Date of Decision: 27.06.2025

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Smt. Amarjit Kaur W/o Late. Sh. Rajwant Singh, R/o House No. 129-B, Gali No.18, Guru Nanak Nagar, Patiala, District Patiala

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--Applicant Versus

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Pegasus Assets Reconstruction Pvt. Ltd. Registered Office 507, Dalamal House, Jamnalal Bajaj Roda, Nirman Point, Mumbai (400021) through its Authorised Officer-cum-Chief Manager

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Pegasus Assets Reconstruction Pvt. Ltd. Office at Unit No. 106, Best Business Park, Plot No.02, Netaji Subhash Place Opp. Fun Cinema, Pitampura, New Delhi (110034) through its Authorised Officer-cumChief Manager

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RBL Bank Ltd. Registered Office at Shahupuri Kolhaur, Maharashtra (416001) through its Authorised Officer-cum-Chief Manager

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RBL Bank Ltd. Branch Tripuri, Ground Floor, DLF Colony, Tripuri, Patiala, District Patiala through its Branch Manager

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ICICI Lombard General Insurance Co. Ltd. First Floor, SCO-11, Chhoti Baradri, Mall Road, Patiala through its Branch Manager

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--Respondents

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Argued by: Sh. Gaurav Goel, Advocate for Applicant (through VC)

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Sh. C.S. Pasricha, Advocate for Respondent Nos.1 to 4 Respondent No. 5 already ex parte vide order dated 06.11.2023

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FINAL ORDER

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(1) This Securitization Application was filed under Section 17 (1) of the Securitization and Reconstruction

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2 SA/164/2023

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AMARJIT KAUR VS. PEGASUS ASSETS RECONSTRUCTIONS PVT. LTD. AND OTHERS

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of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’ for brevity) for setting aside demand notice under Section 13(2) of the Act dated 27.07.2021 (Annexure P4), possession notice under Section 13(4) of the Act dated 17.11.2022 (Annexure P8) and letter dated 02.08.2023 (Annexure P9).

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(2) It was stated in the application that applicant is a widow lady and residing alone as the son of the applicant namely Sh. Lovepreet Singh has been expired; that husband of the applicant namely Sh. Rajwant Singh was the owner of the Residential House No. 129-B, Gali No. 18, Guru Nanak Nagar, Patiala, District Patiala and after the death of her husband the said house was inherited in equal shares by the applicant, her son Sh. Lovepreet Singh (now deceased) and daughter Ms. Harkamalpreet Kaur being legal heirs of Late. Rajwant Singh; that thereafter, her son and daughter transferred their shares in the above said house in favour of the applicant vide Transfer Deed No.2018-19/11/1/7096 dated 21.02.2019; that thereafter, applicant transferred the complete house in favour of her son Sh. Lovepreet Singh vide Transfer Deed No. 2019-20/11/1/1789 dated 08.05.2019; that Sh. Lovepreet Singh obtained a loan against property from the RBL Bank, Patiala (respondent No.4) to the tune of Rs.16,40,000/- by mortgaging the above said house; that the said loan was to be repaid in 180 equated monthly installments i.e., of Rs.18,640/- per month; that the said loan was sanctioned and disbursed on 24.09.2019; that applicant was kept as co-applicant in the above said loan account by the respondent No.4 as the applicant is owner in possession of the above said property and applicant was empowered and entitled to cancel the said Transfer Deed at any point of time, which was also mentioned as one of the terms and conditions of the Transfer Deed No.1789 dated 05.02.2019; that said loan account was got insured by respondent No.4 from ICICI Lombard General Insurance (respondent No.5) after getting all the documents ready which were pre-requisite for obtaining the loan from the son of the applicant as well as the applicant by stating that loan will be canceled if, they

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3 SA/164/2023

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AMARJIT KAUR VS. PEGASUS ASSETS RECONSTRUCTIONS PVT. LTD. AND OTHERS

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do not obtained the Insurance Policy from them; that unfortunately the son of the applicant namely Sh. Lovepreet Singh had expired on 05.04.2021 after a period of more than one and half year of availing the above said loan facility and Insurance Policy; that son of the applicant was paying the loan amount regularly to the respondent and paid the considerable amount to respondents till his last breath but after death of Sh. Lovepreet Singh i.e., on 05.04.2021 the family income of the applicant was stopped and the loan account was declared as NPA on 09.07.2021; that thereafter, respondent No.4 had issued illegally demand notice under Section 13(2) of the Act dated 27.07.2021 to applicant being co-applicant of Sh. Lovepreet Singh; that after the death of her son, when the applicant approached to the Manager of respondent No.4 and requested for the payment of the sum assured under the above said policy in the name of Late. Sh. Lovepreet Singh on which the concerned Branch Manager of respondent No.4 bluntly and rudely replied to the applicant by stating that bank has no concern of whatsoever with any kind of Insurance Policy; that he further told the applicant to approach the Insurance Office, if any, for any kind of claim; that applicant approached before respondent Nos. 4 & 5 several times for payment of Insurance Claim but they always kept silent and did not communicate any response to the applicant and then started putting off the matter on one pretext or the other by making lame excuses; that applicant had got served a registered legal notice dated 22.10.2021 upon the respondent Nos. 4 & 5 through his counsel Sh. Vipin Sharma through registered post dated 22.10.2021 against their illegal denial to pay the claim; that said legal notice dated 22.10.2021 issued by the applicant has replied by the respondent Nos. 3 & 4 only by stating that the respondent Nos. 3 & 4 has already assigned all its rights and liabilities in the above mentioned loan account to respondent Nos. 1 & 2; that on 23.12.2021 applicant has also filed one Consumer Complaint under Section 35 of the Consumer Protection Act before the District Consumer Dispute Redressal Commission, Patiala, against the respondent Nos. 3 & 5 for illegally rejection of the claim of the applicant and

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SA/164/2023

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AMARJIT KAUR VS. PEGASUS ASSETS RECONSTRUCTIONS PVT. LTD. AND OTHERS

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the same is now pending for further orders; that in the first week of the May, 2023 the Officials of the respondent Nos. 1 & 2 came to the house of the applicant and directed the applicant to hand over the vacant possession of the mortgage house within 15 days, otherwise they will forcibly dispossess the applicant from the said house as they have already issued possession notice under Section 13(4) of the Act; that then applicant came to know that the respondent Nos. 1 & 2 has already issued notice dated 17.11.2022 under Section 13(4) of the Act, which was never served upon applicant; that thereafter, some persons visited the house of the applicant and pasted the order/letter dated 02.08.2023 for taking possession of the house of the applicant at the outside wall of the house; that applicant was shocked when some Officers came and pasted the abovesaid notice on the wall of the house and threatened the applicant to vacate the house otherwise she will be forcibly dispossessed from the said house; that applicant had approached the Hon’ble High Court of Punjab and Haryana, Chandigarh against the illegal action of the respondents by filing CWP No.11013/2023 but the same has been dismissed with liberty to avail the alternative remedy as per law; that applicant has no other residential house as the house mortgaged with the respondent is the only residential house of the applicant; that applicant is willing to settle the account with respondents; that applicant is not willful defaulter, it is the circumstances as explained above and made the account as bad one for no fault of applicant. Therefore, it was prayed that the SA may kindly be allowed.

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(3) Reply filed by respondent Nos. 1 & 2. (4) It is stated in the reply that earlier applicant had filed CWP No.11013/2023, which came to be dismissed as withdrawn vide order dated 28.07.2023 laying challenge to the SARFAESI action of the Bank; that it is incorrect to allege by applicant that the applicant is entitled to cancel the Transfer Deed since the property has been mortgaged specifically to secure the loan; that loan in question was not paid regularly; that due to the consistent default, the account had to be classified as NPA on 09.07.2021 in accordance with

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5 SA/164/2023 AMARJIT KAUR VS. PEGASUS ASSETS RECONSTRUCTIONS PVT. LTD. AND OTHERS

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RBI Guidelines; that thereafter, applicant was served with demand notice (Annexure P4), which reveal that the loan of Rs.16.40 Lacs, which was sanctioned on 11.09.2021 and having an outstanding of Rs.16,91,648.88p as on 27.07.2021; that service of demand notice was not disputed by applicant in the present Securitization Application; that property in question was specifically mortgaged to secure the debt availed and thus the secured creditor has got all rights to enforce the said mortgage to recover its dues; that after the service of demand notice, applicant had failed to repay the dues of the Bank; that respondents are proceeding in accordance with law as the applicant despite service of the statutory notices, has failed to repay the dues in the loan account; that applicant is only trying to mislead the Hon’ble Tribunal by making bald statements with the sole intention to circumvent repayment of the dues of the loan; that applicant had been made available substantial time to repay the dues but applicant has chosen not to pay the dues; that therefore, respondent Nos. 1 & 2 had issued possession notice under Section 13(4) of the Act dated 17.11.2022, which was duly served upon applicant as per Rules; that the said notice was also affixed on the property and the same was published in the newspaper as per Rules; that applicant was aware of the entire process initiated by the respondents and thus it is incorrect to say that the applicant felt shocked of the notice found pasted; that the said contention is baseless and mischievous; that respondents have got all sympathy with the applicant however, it is incorrect to allege that the respondents are trying to dispossess the applicant; that the house was specifically mortgaged to secure the debt availed; that no proposal is pending with the respondents regarding settlement; that applicant is not coming ahead to repay the dues and deliberately avoiding the repayment; that the intention to repay would not be sufficient until and unless the payment is made; that alleged consumer compliant has got no role to play with the action taken under the Act. It was further submitted that applicant had never approached this Tribunal with clean hands.

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6 SA/164/2023 AMARJIT KAUR VS. PEGASUS ASSETS RECONSTRUCTIONS PVT. LTD. AND OTHERS

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Therefore, it was prayed that the SA may kindly be dismissed.

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(5) No replication to the reply filed by respondent Nos. 1 & 2.

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(6) I have heard arguments advanced by Sh. Gaurav Goel, Advocate appeared through Video Conferencing and Sh. C.S. Pasricha, Advocate and gone through the record carefully.

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(7) Sh. Gaurav Goel, Advocate argued that possession notice under Section 13(4) of the Act dated 17.11.2022 was not issued as per Rules and not served in compliance of Rules. It was further argued that the said notice was not published in leading newspapers.

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(8) Per contra , Sh. C.S. Pasricha, Advocate argued that possession notice under Section 13(4) of the Act dated 17.11.2022 was issued and served strictly in accordance with law. It was further argued that copy of possession notice is annexed as Annexure R1 (Colly). It was further argued that copies of receipts of registered posts along with tracking reports are also filed with Annexure R1 (Colly), which shows that notice was served upon applicant. It was further argued that possession notice was duly published in the newspapers, which have wide circulation. It was further argued that possession notice was also pasted on the secured asset. All evidences of the above facts have been annexed along with the reply.

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(9) In light of above factual position and evidences on record, this Tribunal is of the considered opinion that the possession notice was prepared and served upon applicant as per Rules. Nothing is on record which can show that possession notice was defective or not served according to Rules. (10) Sh. Gaurav Goel, Advocate further argued that a fraud was committed by respondents.

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(11) Per contra , Sh. C.S. Pasricha, Advocate argued that no fraud was committed by respondents and they have initiated the proceedings under the Act strictly in accordance with law.

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(12) Neither in the application nor during the course of arguments, it was explained as to what type of fraud was committed by respondents. No specific details or facts of fraud were provided in the application

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7 SA/164/2023 AMARJIT KAUR VS. PEGASUS ASSETS RECONSTRUCTIONS PVT. LTD. AND OTHERS

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neither disclosed during the course of arguments. It was necessary for the applicant to disclose the complete facts of fraud, only thereafter it may be said that the alleged fraud was committed.

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(13) Therefore, it reveals that no fraud was committed by respondents as stated by the applicant. (14) Sh. Gaurav Goel, Advocate further argued that applicant is ready to settle the matter with respondents but despite of readiness of applicant, respondents are not ready for the settlement/OTS.

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(15) Settlement of any loan account under OTS or otherwise is the sole prerogative of secured creditor i.e., Bank/FI. Any borrower has no right to compel the secured creditor to settle the loan account under OTS or otherwise.

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(16) During my day-to-day work in the Tribunal, it has came in the knowledge that every second borrower wants for settlement under OTS and not for deposit of total outstanding amount. Since Banks/FIs accepts the OTS proposals at very low amount in comparison to the total outstanding, this ailment is growing on day by day.

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(17) As per established law this Tribunal has no authority for mediation regarding settlement of loan account between borrower and bank/FI.

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(18) In the Act nowhere it is provided that on the ground of non-settlement of loan under OTS by secured creditor this Tribunal can set aside the SARFAESI proceedings. In fact, it is settled law that any borrower cannot claim as a right that OTS proposal submitted by him/her/it must be accepted by the Bank/FI.

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(19) Sh. Gaurav Goel, Advocate further argued that respondent Nos. 4 & 5 had not given/communicate any response to the applicant regarding Insurance Policy and failed to pay the insured amount to the applicant. It was further argued that applicant has also filed a Consumer Complaint in this regard but the same is pending.

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(20) In fact, insurance claim and consumer complaint have no relevance in the SARFAESI Act. While insurance claim and consumer complaint can arise from situations related to secured assets, they generally have no direct relevance to the proceedings

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8 SA/164/2023

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AMARJIT KAUR VS. PEGASUS ASSETS RECONSTRUCTIONS PVT. LTD. AND OTHERS

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under the Act. The SARFAESI Act primarily deals with the rights and remedies of secured creditors i.e., Banks/Financial Institutions to recover their dues by taking possession and selling the secured assets. Consumer complaints, on the other hand, fall under the purview of consumer protection laws and insurance claims are handled bases on insurance contracts. (21) In light of above, there is no relevance in the above said argument of Sh. Gaurav Goel, Advocate. (22) After the consideration of all facts and circumstances as well as evidence on record, there is no illegality or irregularity shown in the proceedings initiated by respondents under the Act and no case is made out in favour of applicant and this SA deserves to be dismissed.

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(23) Accordingly, SA is dismissed. Any other IA pending stands disposed of accordingly. Record be consigned to record room after due compliance.

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Date: 27.06.2025

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Pronounced by me in the open Tribunal.

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(MRIDULESHKUMARSINGH) Presiding Officer, DRT-III, Chandigarh

Amarjit Kaur v. Pegasus Assets Reconstruction Pvt. Ltd. and others

Case brief

What is this about?

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Amarjit Kaur v. Pegasus Assets Reconstruction Pvt. Ltd. and others

Case brief

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