Dismissed

Gurjeet Singh Chauhan v. Gic Housing Finance Ltd. and Others

DRT22 Aug 2025SA/231/2023

Case brief

AI extract

What is this about?

This Tribunal examined an application seeking to set aside SARFAESI proceedings initiated by a housing finance company. The applicant contested the legality of notices dated 02.03.2020 and 24.04.2021 and an order for possession, citing alleged procedural flaws. The court held that no substantial irregularity was shown and dismissed the application.

What did the court decide?

The Securitization Application filed under Section 17(1) of the Act was dismissed as the applicant failed to make out a case for setting aside the proceedings.

Gurjeet Singh Chauhan versus Gic Housing Finance Ltd. and Others — 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.231/2023

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Date of Institution: 03.10.2023 Date of Decision: 22.08.2025

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Gurjeet Singh Chauhan S/o Sh. Kirpal Singh, R/o House No.1149/115, Street No.2, Ward No.7, Sarwan Park, Opp. Gehlewal Mod, Rahon Road, Ludhiana

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--Applicant

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Versus

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GIC Housing Finance Limited B-XX 550, 1st Floor, Office No.12, Pearl Palace, Ghumar Mandi, Ludhiana

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District Magistrate, Mini Secretariat, Ludhiana

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Tehsildar-cum-Executive Magistrate (East), Mini Secretariat, Ludhiana

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--Respondents Argued by: Ms. Ashmita Goel, Advocate for Applicant (through VC) Sh. Abhinav Punj, Advocate for Respondent No.1 Respondent Nos. 2 & 3 already ex parte vide order dated 07.11.2024

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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 of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’ for brevity) for setting aside order dated 14.05.2022 passed by respondent No.2, notice dated 17.08.2023 (Annexure A5) passed by respondent No.3 and order dated 11.05.2022 (Annexure A4) passed by respondent No.2 being illegal, arbitrary and against the provisions of the Act.

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(2) It was stated in the application that applicant had availed loan facilities from respondent No.1 against the mortgaged property i.e., Equitable Mortgage by deposit of Title Deed No.6264 dated 30.10.2018 over property bearing H. No. 1149/115,

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2 SA/231/2023

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GURJEET SINGH CHAUHAN VS. GIC HOUSING FINANCE LIMITED AND OTHERS

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Street No.2, Ward No.7, Khasra No.841/341, Khata No.720/823, Hadbast No.166, Sarwan Park, Opp. Gehlewal Mod, Rahon Road, Taraf Gehlewal, Ludhiana; that respondent No.1 has illegally and arbitrarily initiated the SARFAESI proceedings against the applicant by issuing notice under Section 13(2) of the Act dated 02.03.2020 to the borrower/mortgagor/guarantors; that notice under Section 13(2) of the Act was not as per the provisions of the Act and against the settled law as it is mandatory that respondent is duty bound to bifurcate the principle amount as well as the interest accrued thereon; that respondent No.1 had done it intentionally only by mentioning total aggregate outstanding amount in the notice issued under Section 13(2) of the Act as mentioned by respondent No.1 as the bank has charged exorbitant rate of interest in the loan account of the applicant; that after issuance of notice under Section 13(2) of the Act, respondent No.1 issued possession notice under Section 13(4) of the Act dated 24.04.2021 to the applicant, which was again illegal and arbitrary; that thereafter, respondent No.1 filed an application under Section 14 of the Act for taking physical possession of the mortgaged property by filing wrong and false affidavit before respondent No.2; that in the affidavit, the respondent No.1 has wrongly stated in para 9 that against the said demand notice, the borrowers had given certain objections vide letter dated NIL and the same has been considered by the secured creditor and reasons for its non-acceptance was duly sent to the borrower vide Bank’s letter dated NIL or that the borrower has not given any objections against the demand notice under Section 13(2) of the Act; that thereafter, respondent No.2 passed the orders on the application filed by respondent No.1 for taking physical possession of the mortgaged property; that thereafter, respondent No.3 in compliance of the order dated 11.05.2022 passed by respondent No.2 issued notice dated 17.08.2023 to handover the physical possession of the properties to the

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3 SA/231/2023

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GURJEET SINGH CHAUHAN VS. GIC HOUSING FINANCE LIMITED AND OTHERS

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Authorised Officer of the respondent No.1 on 14.09.2023; that all the proceedings initiated by the respondent No.1 under the Act against the applicant are illegal, arbitrary and liable to be set aside. It was further prayed that the proceedings initiated by respondent No.1 are not as per law and are liable to be quashed.

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(3) Reply filed by respondent No.1.

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(4) It is stated in the reply that the present application is not maintainable being gross abuse of process of law; that applicant has himself admitted the fact that he has approached the respondent No.1 for financial assistance and therefore, he is liable for repayment of the dues amount towards the loan facility availed from the respondent No.1; that applicant has deliberately concealed various important and relevant material facts before this Tribunal, which were supposed to be stated prima facie ; that immovable property mortgaged against the loan facility assigned to the applicant has been directed to be attached/auctioned by the Hon’ble Court of Civil Judge Junior Division Ludhiana, vide order dated 06.10.2023; that applicant has intentionally and knowingly having malafide intentions despite having knowledge of the aforementioned fact has decided not to disclose the same before this Tribunal; that it is necessary to submit here that the applicant had himself handed over the Sale Deeds to respondent No.1 for getting financial assistance, which clearly shows that the property in question was executed in favour of the erstwhile owner from whom the property in question was purchased by applicant and the said loan facility was availed by him to purchase the property in question only; that moreover, along with the Sale Deeds executed in favour of the erstwhile owner, a latest jamabandi whereby the ownership of the property in question was mutated from Sh. Kirpal Singh in favour of the erstwhile owner was also submitted along with the KYC documents of the erstwhile owner from whom the property in question

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SA/231/2023

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GURJEET SINGH CHAUHAN VS. GIC HOUSING FINANCE LIMITED AND OTHERS

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was purchased by applicant and mortgaged with the respondent No.1; that in the year, 2018 applicant had approached the respondent No.1 to avail the Housing Loan Facility amounting to Rs.22,71,825/by mortgaging the property in question; that the said loan was sanctioned to applicant and a Loan Agreement dated 25.09.2018 was executed between the respondent No.1 as well as the applicant; that as per the terms and conditions of the loan facility sanctioned to applicant, he was required to mutate his name in the relevant revenue records and thereafter, the same was to be submitted with the respondent No.1; that respondent No.1 after withholding an amount of Rs.1,00,000/- out of total sanctioned loan amount of Rs.22,71,825/- handed over two disbursement cheques of Rs.9,25,000/each to the respective seller(s) of the property in question at the time of registration of the Sale Deed and one disbursement cheque of Rs.3,00,000/- for construction on the property in question; that Sale Deed pertaining to the secured asset in favour of the applicant/borrower i.e., Sh. Gurjeet Singh Chauhan was handed over and still in the possession of the respondent No.1; that Officials of respondent No.1 again requested the applicant herein to ensure mutation of his name in the relevant revenue records and thereafter submit the latest jamabandi with the respondent No.1 for its records in terms of the Loan Agreement; that however, for the reasons best known to Sh. Gurjeet Singh Chauhan he kept on delaying the same and he never submitted the latest jamabandi/revenue records with the respondent No.1; that applicant started committing defaults in repayment of his monthly installments qua the loan amount disbursed to him by the respondent No.1 and in terms of the Loan Agreement as well as after the due compliances of the provisions/procedures provided under the Act, respondent No.1 initiated the recovery proceedings against the said applicant; that respondent No.1 was constrained by the defaults committed on part of the applicant proceeded for

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5 SA/231/2023

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GURJEET SINGH CHAUHAN VS. GIC HOUSING FINANCE LIMITED AND OTHERS

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recovery of its dues in terms of the scheme as envisaged under the Act, to take over the possession of the property; that subsequent to non-compliance of the notice under Section 13(2) of the Act on part of the applicant, respondent No.1 approached the District Magistrate, Ludhiana seeking assistance in taking over the possession of the property mortgaged against the loan facility; that District Magistrate after finding all the documents in place and being satisfied with the records produced by the respondent No.1 was pleased to direct the concerned authorities to take the possession of the mortgaged property in question and handover the same to the respondent vide order dated 17.08.2023; that the present SA filed by applicant is an attempt to delay the furthermore entangle the process of recovery of legitimate dues by the respondent No.1; that applicant herein has failed to prove any material irregularity on part of the respondent No.1 and procedural flaw while initiating proceedings under the Act. It was further submitted that applicant has not approached this Tribunal with clean hands and has concealed relevant and material facts. Therefore, the present SA is liable to be dismissed.

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(5) No replication filed by applicant to the reply filed by respondent No.1.

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(6) After service of notices upon respondent Nos. 2 & 3 none had appeared on their behalf and no reply was filed. Respondents Nos. 2 & 3 were proceeded ex parte on 07.11.2024.

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(7) I have heard arguments advanced by Ms. Ashmita Goel and Sh. Abhinav Punj, Advocates and gone through the record carefully.

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(8) Ms. Ashmita Goel, Advocate argued that respondent No.1 has not initiated SARFAESI proceedings as per law. It was further argued that respondent No.1 had issued notice under Section 13(2) of the Act dated 02.03.2020 thereafter, possession notice dated 24.04.2021 under Section 13(4) of the Act was issued. It was further argued that respondent No.1 has not bifurcated the principal

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6 SA/231/2023

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GURJEET SINGH CHAUHAN VS. GIC HOUSING FINANCE LIMITED AND OTHERS

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amount and interest, which was mentioned in the demand notice. It was further argued that application under Section 14 of the Act filed by respondent No.1 for taking physical possession of the mortgaged property by filing wrong and false affidavit before District Magistrate. Therefore, it was prayed that the illegal proceedings initiated by respondent No.1 are liable to be set aside.

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(9) Per contra , Sh. Abhinav Punj, Advocate argued that notices under Section 13(2) & 13(4) of the Act were served upon applicant strictly in accordance with law. It was further argued that applicant himself admitted that notice under Section 13(2) & 13(4) of the Act were received. It was further argued that no representation under Section 13(3-A) of the Act was sent to respondent No.1. It was further argued that order under Section 14 of the Act was passed by the District Magistrate concerned after due consideration of nine-point affidavit. It was further argued that applicant has no opportunity to say the said order was passed without any affidavit or incorrect affidavit. It was further argued that that applicant herein has failed to prove any material irregularity on part of the respondent No.1 and procedural flaw while initiating proceedings under the Act.

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(10) It was admitted by learned counsel for applicant that applicant has availed loan from respondent No.1 and applicant has not deposited the amount till date. It was further admitted that notice under Section 13(2) of the Act was received by applicant. It was further admitted that no objections were raised by applicant under Section 13(3-A) of the Act. It was further admitted that possession notice under Section 13(4) of the Act was also served upon applicant.

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(11) Copy of order passed by the District Magistrate, Ludhiana under Section 14 of the Act in this matter was filed by applicant with the SA as Annexure A4. Ms. Ashmita Goel, Advocate had objected this order on the ground that in the nine-

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SA/231/2023

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GURJEET SINGH CHAUHAN VS. GIC HOUSING FINANCE LIMITED AND OTHERS

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point affidavit (Annexure A3) at point No.9 vague information was provided. It reveals that it is deposed in the affidavit that against the said demand notice borrowers has given certain objections and the same were replied OR the borrower has not given any objections against the demand notice. Ms. Ashmita Goel, Advocate argued that applicant has not sent any representation under Section 13(3-A) of the Act, therefore the deposition at point No.9 in the affidavit was incorrect and on the basis of it, order passed under Section 14 of the Act is illegal. This Tribunal is not accepts this argument because both facts have been deposed in the affidavit as mentioned above. Therefore, maximum it can be said that the Authorised Officer had no knowledge on the above point at the time of deposition of the affidavit. It cannot be inferred that wrong, false or incorrect information was provided and in light of these facts order passed under Section 14 of the Act cannot be held as illegal.

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(12) Ms. Ashmita Goel, Advocate also prayed in the SA that order dated 14.05.2022 passed by respondent No.2 may be set aside being illegal and arbitrary. Applicant has not filed any such order dated 14.05.2022 with the SA nor thereafter. Therefore, no adjudication is required regarding the above relief.

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(13) In the SARFAESI Act nowhere it is provided that applicant has any right not to deposit his/her outstanding dues.

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(14) Notices under Section 13(2) & 13(4) of the Act as well as the possession notices were duly served upon applicant as per the above discussion and evidence available on the record.

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(15) No substantial irregularity shown in the service of demand notice or any other notices. (16) Hon’ble Supreme Court in M/s L & T Housing Finance Limited vs. M/s Trishul Developers in Civil Appeal No.3143/2020 decided on 27.10.2020 has observed that trivial procedural lapse is not a ground of nullify SARFEASI proceedings initiated by secured creditors, if no

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8 SA/231/2023 GURJEET SINGH CHAUHAN VS. GIC HOUSING FINANCE LIMITED AND OTHERS

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substantial prejudice was caused to borrower. It is further observed by Hon’ble Supreme Court that proceedings initiated under the SARFEASI Act by the secured creditor cannot be nullified merely on the ground to technical defect and procedural lapse unless substantial prejudice was caused to the defaulters.

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(17) Applicant could not established any substantial prejudice caused to him by the initiation of SARFAESI proceedings. Admittedly, there is outstanding in the loan account of applicant and admittedly, he has not deposited the same. (18) In the above facts and circumstances, in the considered opinion of this Tribunal, no case is made out by applicant in his favour. Resultantly, this SA is liable to be dismissed. SA is dismissed.

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Record be consigned to record room after due compliance. Date: 22.08.2025 Pronounced by me in the open Tribunal.

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(MRIDULESHKUMARSINGH) Presiding Officer, DRT-III, Chandigarh

Gurjeet Singh Chauhan v. Gic Housing Finance Ltd. and Others

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Gurjeet Singh Chauhan v. Gic Housing Finance Ltd. and Others

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