Dismissed

Mrs Seerisha N v. the Authorized Officer Iifl Home Finance Ltd.

DRT24 Feb 2025SA/8/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's challenge to a sale certificate issued under the SARFAESI Act. The Tribunal upheld the 1st Respondent's actions as compliant with the Act and Rules, noting proper service of notices and successful auction.

What did the court decide?

Sale Certificate dated 09.09.2022 held valid; SA dismissed.

Mrs Seerisha N versus the Authorized Officer Iifl… — Contract and Commercial Disputes | DRT (2025)

SA No.08/2023

26.02.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 26^th day of February, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 08 of 2023

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Mrs. Seerisha .N, W/o. Mr. Chandrasekhar Reddy B4, 104, Purva Windermere Apartments, Bhavani Amman Koil Street, Pallikaranai, Chennai – 601 302

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….Applicant

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-Vs-

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The Authorized Officer, IIFL Home Finance Ltd., IIFL House Sun Infotech Park Road No.16V, Plot No.B-23,

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MIDC, Thane Industrial Area, Wagle Estate,

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Thane – 400 604

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Mrs. S. Samiya W/o. Mr. A. Faize Ahmed,

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Mr. Faize Ahmed, S/o. Mr. Abdul Mazeeth Both residing at No.38/3, Rajavel Street, Perambur, Chennai – 600 011

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….Respondents

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Counsels on record / appeared:

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Counsel for Applicant : Mr. Sanjeevi Counsel for Respondent : Mr. V. Balasubramani

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:O R D E R:

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The Applicant is a borrower, who has filed the present SA impugning the Sale Certificate dated 09.09.2022 issued pursuant to the Sale conducted on 10.08.2022. The outstanding amount due as per the Sale Notice is Rs.64,65,442/- as on 15.07.2022.

SA No.08/2023

26.02.2025

The case of the Applicant is that she availed home loan of Rs.50,70,036/in the year 2017 for the purchase of the schedule mentioned property along with her husband. The 1^st Respondent disbursed the loan and the Sale Deed is registered for an amount of Rs.6,74,000/- and the Sale Agreement is Registered for an amount of Rs.56,14,148/-. The loan was granted at 80% of the property value. It is contended that the Applicant was made to sign the blank papers the contents of which is not known to the Applicant and hence the sale is not binding on her.

¶25

1.2 It is alleged that the 1^st Respondent suddenly sealed the property of the Applicant in the month of July 2022 without giving any notice and without any inventory. The Applicant was at her native place when the possession was taken and on her return back to her home she was shocked to see Applicant’s house was locked and sealed. On 20.07.2022, Applicant received a letter from the 1^st Respondent informing about the physical possession of the property through the Advocate Commissioner.

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1.3 It is contended that the Applicant requested the 1^st Respondent to give back her belongings and fixtures and other household articles. But the 1^st Respondent asked the Applicant to wait till the sale of property and the 1^st Respondent called upon the Applicant to take her household articles and some fixtures alone. On enquiry, the Applicant was informed that the belongings fixed in the property is sold to 2^nd & 3^rd Respondent, “as is where is basis and as is what is basis”. However, the Applicant vide letter dated 30.08.2022 rendered a detailed list of her belongings inside the premises, which was denied by Respondent Bank vide their letter dated 30.09.2022 and on verification of the Encumbrance Certificate, the Applicant came to know about the Sale Certificate, which is registered by the 1^st Respondent in favour of the 2^nd and 3^rd Respondents and the MOD executed by the 2^nd & 3^rd Respondents in favour of the 1^st Respondent.

SA No.08/2023

26.02.2025

1.4 It is put forth that the Respondent has not issued the Demand Notice and the Sale Notice is not affixed on the property nor published in the Newspaper, as mandated under Rule 8(6) of the Security Interest (Enforcement) Rules. Further, it is alleged that there is no 30 days or 15 days notice of sale to the Applicant and hence the Sale Certificate dated 09.09.2022 is to be set aside.

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1.5 In the grounds of the SA, it is averred that the classification of the Account as NPA is against the RBI guidelines and the 1^st Respondent has not issued proper Section 13(2) notice and no 13(4) notice before initiating the measures under SARFAESI Act.

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1.6 As the 1^st Respondent has not issued the 13(2) Demand Notice, the Applicant right under Section 13 (3-A) of the Act is impaired. The 1^st Respondent has sold the property with pre-planned to the 2^nd and 3^rd Respondents wherein they had deposited 20% more than instead of 10% of the EMD and balance they paid through the loan availed from 1^st Respondent.

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1.7 There is no compliance of Rule 8 of the Security Interest (Enforcement) Rules and the 1^st Respondent has failed to follow the procedure. The Sale Notice is not affixed nor published in two leading Newspapers and the sale notice does not contain proper measurement and identification of the Secured Asset.

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1.8 It is alleged that the 1^st Respondent has not made proper valuation of the property from an approved valuer and have valued the property very low. On these grounds, the Applicant prayed to set aside the sale certificate dated 09.09.2022 pursuant to sale conducted on 10.08.2022.

SA No.08/2023

26.02.2025

The 1^st Respondent Bank has filed the counter affidavit inter-alia contending that they are registered under Section 29(A) of National Housing Bank Act 1987 and also notified as Financial Institution by the Department of Finance (Central Government) in exercise of the Powers conferred by the sub clause (iv) of Clause (m) of Sub Clause (1) of Section 2 of Securitization and Reconstruction of Financial Assets and Enforcements of Security Interest Act, 2022 (hereinafter referred to as Act) and on the strength of the said notification the Respondent is entitled to initiate measures under the provisions of SARFAESI Act of Enforcement of Security Interest created upon the Secured Asset.

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2.1 During the course of the Respondent business, the Applicant had approached, the 1^st Respondent for Credit facility for a sum of Rs.50,70,036/-, which was sanctioned vide Loan A/c No.793638. The Applicant accepted the sanctioned loan amount and executed the loan agreements agreeing to repay the loan in 36 monthly installments of Rs.45,128/-.

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2.2 The Applicant also deposited the Title Deed respect of all that piece and parcel of the property being Apartment No.B-206, 2^nd Floor, Block B, IS Marakesh, having super built up area 1370 Sq.ft., comprised on Survey No.4/7A1, 4/6A2, 4/2, 4/3, 3/5, 3/3, ¾, 4/4B, 3/1A, 3/2, 3/6 part situated at Karanai Puducherry Village, Chengalpet Taluk, Kancheepuram District, Tamil Nadu (hereinafter referred to as “the Property/Secured Assets”) fully described in the schedule mentioned in demand notice.

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2.3 As the Applicant failed to adhere to the terms of the agreement and defaulted in the monthly repayments, the Account of the Applicant was classified as NPA on 03.02.2020 under Section 2(o) of the Act.

SA No.08/2023

26.02.2025

Subsequently, the 1^st Respondent has issued demand notice under Section 13(2) on 24.02.2020 calling upon the Applicant to discharge the liability within 60 days from the date of receipt of the demand notice.

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2.4 The demand notice sent to the Applicant is duly served and the tracking consignment is enclosed along with the Counter Affidavit. Further, the Respondent has effected the Newspaper Publication in English Newspaper “Business Standard” on 27.02.2020 and Tamil Newspaper “Hindu Tamil” on 27.02.2020.

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2.5 The Applicant despite having knowledge of the statutory notice failed to discharge their liability within the statutory period, hence the Respondent Bank issued Possession Notice under Section 13(4) on 16.06.2020, which was also published on 17.06.2020 in English “Business Standard and Tamil Makkal Kural”.

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2.6 The Applicant, however, failed to clear the liability, hence, the 1^st Respondent issued notice of First sale and issued sale dated 09.02.2021 and the same was published in 10.02.2021 in English “Business Standard and Tamil Daily Hindu Tamil”. However, the Applicant did not make any attempt or show willingness to repay the loan dues and as such the sale did not took place in the absence of the bidder. Hence, the 1^st Respondent proceed with issuing 15 days Auction Second Sale Notice dated 21.07.2022 and the same was published in English “Indian Express” on 23.07.2022 and Tamil Daily “Dinakaran” on 23.07.2022 and the sale was taken place with successful bidder. The 1^st Respondent registered the Sale Certificate on 09.09.2022 with successful bidder.

SA No.08/2023

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2.7 The 1^st Respondent in their Counter to Para 5 of averments in Para (5.1 to 5.2) are partly denied. It is admitted that the Applicant had availed credit facility and executed loan agreement by agreeing to the terms and conditions, the Applicants were not prompt in repayment. Under these circumstance, despite several request and reminder, the Applicant failed to repay the due on time and as such their account was classified as NPA on 03.02.2020 and initiated measures under Section 13(2) and 13(4) of SARFAESI Act.

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2.8 The Respondent denies the non-compliance of the procedure under Rule 8(5) & 8(6) of Security Interest (Enforcement) Rules, 2002 read with Section 13(8) of SARFAESI Act. The Respondent has proceeded to recover the legitimate dues after giving due credit payment made by the Applicant and classified the Loan Account as NPA prior to COVID Pandemic. The 1^st Respondent Bank has obtained a valuation report from the authorized valuer and fixed the reserve price accordingly. On the other hand, the Applicant has not filed any documents to prove that the mortgaged property is undervalued. Hence, the Respondent denies all the averments made by the Applicant with supporting documents and prays for the dismissal of the present SA.

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Heard both the Counsels representing the respective parties.

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It is manifest from the records that the Applicant Mrs. N. Seerisha along with her husband Mr. Chandrasekhar Reddy availed the Housing Loan, which was sanctioned by the 1^st Respondent vide sanction letter dated 30.05.2017 for an amount of Rs.50,70,036/-. The 2^nd and 3^rd Respondents are the successful bidder, who have participated in the auction conducted by the 1^st Respondent pursuant to Sale Notice dated 21.07.2022. As the

SA No.08/2023

26.02.2025

2^nd and 3^rd Respondents are the successful bidders, who have paid the entire consideration, the sale certificate is issued by the 1^st Respondent, which is Registered in the Office of The SRO, Guduvancherry on 09.09.2022.

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3.1 The Applicant admits the availing of the facility and the default in the repayment in Para 5.1 & 5.2 of the averments in the SA. In fact, the Applicant does not dispute creating of the mortgage by deposit of Title Deeds, which constitutes as secured asset favoring the 1^st Respondent towards the credit facility availed by them. Though the Applicant has challenged the Sale Certificate has not challenged the first sale notice dated 09.02.2021 and the sale did not materialized for want of bidders.

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3.2 It is contended by the Applicant that the 1^st Respondent has not issued the Section 13(2) demand notice to all the parties. On the other hand the Respondent Bank have produced section 13(2) demand notice dated 24.02.2020 at Page 17 of the Counter typed set along with the postal receipt for having sent the notice and the postal tracking report from Page 17 to 38.

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3.3 It is seen that the notices have been sent to the borrower Mrs. N. Seerisha Chandrasekar at the Secured Asset (1) Apartment No.B-206, 2^nd Floor, Block B, IS Marakesh, situated at Karanai Puducherry Village, Chengalpet Taluk, Kancheepuram District, Tamil Nadu – 603 202 ; (2) M/s. SVR Enterprises Pvt. Ltd., Plot No.101, Door No.7, VGP Shanti Nagar, 1^st Main Road, Narayanapuram, Kanchipuram, Tamil Nadu 601 302; and (3) Flat No.C-139, 1^st Floor, Sis Danube Apartments, Jayachandran Nagar, 1^st Main Road, Pallikaranai, Chennai, Tamil Nadu – 601 302.

SA No.08/2023

26.02.2025

3.4 Further, it is seen from the postal tracking report from Page No.44 to 61, the item is delivered on 28.02.2020, 29.02.2020, 06.03.2020, 09.03.2020, and 11.03.2020. The possession notice dated 16.06.2020 issued under Section 13(4) subsequent to the demand notice under Section 13(2) is also published in the leading Newspapers on 17.06.2020 in English “Business Standard and Tamil Makkal Kural”.

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3.5 Thus, it is evident that the 1^st Respondent after classifying the Account as NPA, as per RBI guidelines has issued Section 13(2) Demand Notice, demanding the Applicant to repay the outstanding amount due within 60 days failing which the Respondent would move further under the SARFAESI Act and it is also seen that the attention was drawn to subsection 13(3) and 13(8) of the SARFAESI Act, to liquidate the liability failing which the Respondent, as Secured Creditor would proceed further under the 13(4) notice.

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3.6 As the Applicant did not liquidate the liability within the period of 60 days, as mandated under Section 13(2) of the Act, the Respondent Bank has proceeded further in issuing the Possession Notice dated 16.06.2020, which was also sent by RPA and the postal track reports produced by the Bank from Page No. 41 to 61 clearing evidences that duly served the 13(4) Possession Notice.

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3.7 In furtherance to the measure, the 1^st Respondent has also published the 13(4) possession notice in leading Newspapers on 17.06.2020 in English “Business Standard and Tamil Makkal Kural”. Additionally, the 1^st Respondent has also affixed the 13(4) Possession Notice and the photo affixture of the 13(4) notice is produced by the 1^st Respondent at Page 34 of the typed set. Hence, the contention of the Applicant that no Section

SA No.08/2023

26.02.2025

13(4) possession notice is served on the Applicant and the 1^st Respondent has not followed the Rules, as required fails.

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3.8 In spite of receipt of statutory notices, the Applicant did not liquidate the liability, hence the 1^st Respondent has issued the sale notice dated 09.02.2021, which is also sent by RPA and the postal track report is also produced to substantiate their claim. It is also seen from the records that the 1^st Respondent has published the Sale Notice in English and Tamil Newspapers, as required under the Act.

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3.9 The 1^st Respondent has also obtained the valuation report from their approved valuer, which is produced at Page No.98 of the typed set before auctioning the property and the valuation report issued by the approved valuer have complied with the requirements for valuation and have fixed the value at Rs.61,65,000/-, taking into consideration, the appreciation and the value of similar property around the locality.

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3.10 Though the Applicant contends that that 1^st Respondent has under valued the property has not produced any valuation from an independent and from the approved valuer, to counter the valuation of the 1^st Respondent. A mere allegation of under valuation would not sustain without any supporting documents. Hence, the contention that the property under valued cannot sustain.

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3.11 As the First sale did not materialized, the 1^st Respondent issued the Second Sale Notice dated 21.07.2022 notifying the property to be sold on 10.08.2022. The sale notice clearly reflects the issuance of demand notice on 24.02.2020 and the date of physical possession on 20.01.2021 and the total outstanding due as on 15.07.2022.

SA No.08/2023

26.02.2025

3.12 The sale notice was sent by RPAD and the postal track reports clearly reflects the service of the Second Sale Notice dated 10.02.2021. As per the procedure, the Respondent Bank has published the Second Sale Notice in the English and Tamil Newspapers. The sale was successfully held and the successful bidders 2^nd and 3^rd Respondents herein have paid the entire sale consideration, hence, the 1^st Respondent, as Secured Creditor has executed the Sale Certificate, which is registered in the Office of The SRO, Guduvancherry, vide Document No.15176 of 2022.

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3.13 It is evident from the documents produced by both the Parties, the 1^st Respondent has followed all the procedures as mandated under the Acts of the Rules. In fact, the 1^st Respondent has initiated measures after classifying the Account as NPA, as per the RBI guidelines and had proceeded in issuing Section 13(2) Demand Notice dated 24.02.2020, Section 13(4) Possession Notice dated 16.06.2020. As the Applicant did not liquidate the liability, as mandated, the Bank has proceeded and issued Two Sale Notices of which the First Sale Notice dated 09.02.2021 did not materialized for want of bidders. Hence, the Bank has issued the Second Sale Notice dated 21.07.2022 giving 15 days notice, as per the Act.

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3.14 The 1^st Respondent has followed all the procedures as prescribed under the Acts of the Rules and have established the due compliance of the measures in accordance with the Act. On the other hand, the Applicant failed to make out any violation or infirmities in the measures taken by the 1^st Respondent and had failed to establish the irregularities in the procedure, as required while proceeding under SARFAESI Act.

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3.15 It is pertinent to note that the Applicant have received the statutory notices and is fully aware of the Section 14 order; taking of the physical

SA No.08/2023

26.02.2025

possession of the secured asset and have not made any attempt to liquidate the liability due to the 1^st Respondent. On the other hand, the Applicant willingly waved her right to redeem the property under Section 13(8) of the Act, which was clearly notified by the 1^st Respondent, the redemption clause available to them in the Section 13(2) Demand Notice.

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3.16 The records of the case clearly reflects that the Applicant had acknowledged the sale and the party in person was present before this Tribunal on 10.01.2024 conceded that the sale is conducted by the 1^st Respondent and she may be permitted to remove the belongings from the property.

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3.17 Even otherwise, the 1st Respondent, as a secured creditor has initiated the measures and have established the due compliance of the procedures, as required under the Act and Rules made thereunder. As the Applicant has failed to make out a case, for interference of this Tribunal in setting aside the Sale Certificate dated 09.09.2022, the present SA fails.

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Upon examination of all the facts, the documents made available by both the parties, the Tribunal comes to conclusion that the measure initiated by the 1^st Respondent are in accordance with the prescribed procedures under the Act and the Rules made thereunder. The Statutory Notices under Section 13(2) dated 24.02.2020 and 13(4) dated 16.06.2020 and the Second Sale Notice dated 21.07.2022 and the Sale Certificate dated 09.09.2022 are held as valid measures taken by the 1^st Respondent under the Act.

SA No.08/2023

26.02.2025

Accordingly, SA stands dismissed. Interim order granted, if any stands vacated and the pending IAs are closed in terms of this order. No order as to cost.

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to Steno (Sudhakar), transcribed by him, corrected, signed and pronounced by me on this the 26^th day of February, 2025)

SA No.08/2023

26.02.2025

ANNEXURES

INDEX TO THE TYPED SET OF DOCUMENTS FILED BY THE APPLICANT

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Copy ofSanction Letterdated 30.05.2017	A-1
2.	Copy ofStatement of Account	A-2
3.	Copy ofConstruction Agreement dated 05.05.2017	A-3
4.	Copy ofSaleDeed dated 05.06.2017	A-4
5.	Copy of MODdated 05.06.2017	A-5
6.	Copy of Agreementfor Interior Workdated12.06.2017	A-6
7.	Copy of Sale Notice issued by the 1^stRespondent dated 21.07.2022	A-7
8.	Copy of WarrantAffixedintheProperty	A-8
9.	Letter requesting 1^stRespondent to handover the Applicant belongings dated 30.08.2022	A-9
10.	Reply by the1^stRespondent dated 30.09.2022	A-10
11.	Copy of MOD by 2^nd, 3^rdRespondent in favour of 1^st Respondent dated 09.09.2022.	A-11
12.	Certified copy of Sale Certificate issued by the 1^stRespondent in favour of 2^ndand 3^rdRespondent dated 09.09.2022.	A-12
13.	Copy ofGasBill	A-13

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

SA No.08/2023

26.02.2025

LIST OF DOCUMENTS FILED BY THE RESPONDENT

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Exhibits on the part of the Respondent:

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Sl. No.	Description of Documents	Exhibit No.
1.	Copy of Mortgage Deed of Deposit Title Deed dated 05.06.2017	R-1
2.	Copy of 13(2) Demand Notice with Postal Receipts and Tracking Consignment dated24.02.2020	R-2
3.	Copy of Demand Notice Paper Publication (English- Business Standard & Tamil – Makkal Kural) dated 27.02.2020	R-3
4.	Copy of Possession Notice under Section 13(4) with Postal Receipts and Tracking Consignment dated 16.06.2020	R-4
5.	Copy of Possession Notice Paper Publication (English – Business Standard) dated17.06.2020	R-5
6.	Copy of Possession Notice Paper Publication (Tamil – Makkal Kural) dated17.06.2020	R-6
7.	Copy of Possession Notice Affixture Photos dated 17.06.2020	R-7
8.	Copy of Sale Notice along with Receipts and Tracking Consignment dated 09.02.2021	R-8
9.	Copy of Sale Notice Paper Publication – English Business Standard dated10.02.2021	R-9
10.	Copy of Sale Notice Paper Publication – Tamil (Makkal Kural) dated10.02.2021	R-10
11.	Copy of Valuation Report dated 18.07.2022	R-11
12.	Copy of Second Sale Notice along with Receipts, Tracking Consignment & Paper Publication (English – Business Standard & Tamil – Makkal Kural) dated 21.07.2022.	R-12
13.	Copy ofSale Certificate dated 09.09.2022.	R-13

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

SA No.08/2023

26.02.2025

SCHEDULE OF PROPERTY

¶117

SCHEDULE - A

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All that piece and parcel of the property bearing Apartment No.B-206, 2^nd Floor, Block B, SIS Marakesh, having super built up area 1370 Sq.ft., comprised in Survey No.4/7A1, 4/6A, 4/7A2, 4/3, 3/5, 3/3, 3/4, 4/4B, 3/1A, 3/2, 3/6 part situated at Karanai Puducherry Village, Chengalpet Taluk, Kancheepuram District, Tamil Nadu and bounded on the

¶119

North by:S.No.2,S.No.4/4A,S.No.4/4C,4/7B,4/7C & Karanai Puducherry Main Road, South by : S.Nos.4/1A, 4/10 & OSR Land in 6/1, 3/6 (Part)

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East by : S.No.4/7B, 4/7C, 4/6B, 4/1A & 4/10

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West by : Urappakkam Village Boundary

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Situated within the Sub-Registration District of Guduvanchery and Registration District of South Chennai.

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SCHEDULE - B

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Title Document relating to the Schedule-A property deposited by the Owner with the Lender.

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Original – Construction Agreement dated 05.05.2017 Registered as Document No.5334/2017.

¶126

Original – Sale Deed dated 05.06.2017 Registered as Document No.5335/2017.

¶127

Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

Mrs Seerisha N v. the Authorized Officer Iifl Home Finance Ltd.

Case brief

What is this about?

What did the court decide?

Mrs Seerisha N v. the Authorized Officer Iifl Home Finance Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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Case details

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