Dismissed

Pyare Lal v. India Infoline Home Finance Limited

DRT27 Mar 2025SA/292/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Securitization Application challenging a sale of secured assets under the SARFAESI Act. The Tribunal held that since service of Section 13(2) and 13(4) notices was proved via postal receipts and tracking reports, non-service of the auction notice was not believable, leading to dismissal.

What did the court decide?

The Securitization Application was dismissed and all pending Interim Applications were disposed of accordingly.

Pyare Lal versus India Infoline Home Finance Limited — Banking and Recovery | DRT (2025)

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SA No.292 of 2023

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA No. 292 of 2023 Pyare Lal and another Versus India Infoline Home Finance Limited and others

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Dated: 27.03.2025 Item No. 01

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Argued by: Sh.Ankit Kaushal, Counsel for the Applicants. Sh.Vineet Sehgal, Counsel for Respondent FI. Sh.Harish Mahajan/Auction Purchaser in person.

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Pyare Lal and another (Applicants) have filed this

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Securitization Application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), against the Managing Director, India Infoline Home Finance Limited and others (Respondents).

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Admittedly, on 12.04.2021, Respondent FI sanctioned a housing loan of Rs. 17.34 lacs to the Applicants, which was repayable in monthly installments of Rs. 18,000/- each. To secure the loan, Applicants had created security interest in respect of plot No. 10, Khasra No. 2896/731, land area admeasuring 663 sq. ft, 1125 sq. ft carpet area and 1324 sq. ft. super build up, Vakia Rakba Tung Pai Sub Urban, Abadi Barat Nagar, Amritsar. Applicants could not repay the loan as per the repayment schedule and on 09.12.2022, Respondent FI declared the account NPA. On 22.12.2022, it issued the notice under Section 13(2) of the SARFAESI Act, demanding a sum of Rs.18,52,639/- due as on 15.12.2022. Since, Applicants failed to make the payment, on 03.03.2023, it issued the notice under Section 13(4) and on 09.06.2023, Respondent FI took the physical possession of the

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SA No.292 of 2023

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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property. On 14.08.2023, Respondent FI issued the auction notice in respect of the secured asset, fixing the reserve price at Rs.17.26 lacs. At that time a sum of Rs. 20,25,207/-as on 02.08.2023 was due from the Applicants. The auction was fixed up for 31.08.2023. Shri Harish Mahajan was the auction purchaser, who gave the bid of Rs. 17.26 lacs. The property was sold at the reserve price. The sale certificate was issued in his favour on 26.09.2023. On 28.09.2023, Applicants filed the present SA.

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Initially, Applicants had not impleaded the auction purchaser as party to the present SA. However, 27.10.2023, Applicants moved an application for impleading the auction purchaser as party and for amendment of the SA. This application was allowed by this Tribunal vide order dated 30.10.2023 and notice was issued to the auction purchaser, for 01.11.2023.

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Auction purchaser has appeared in this case. However, he has not filed any reply to the amended SA.

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Applicants, in the present SA, have alleged that they were never served with demand notice dated 22.12.2022. It is also stated that the notice is vague. Applicants have been making the payment of the installments regularly. It is alleged that on 03.03.2023, Respondent FI had issued the possession notice, which was never served upon them. The notice was not affixed on the property and publication was also not done. Further, Respondent FI did not serve them the sale notice.

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SA No.292 of 2023

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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On these grounds, Applicants filed the present SA for setting aside the SARFAESI action initiated by the Respondent FI.

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Respondent FI, in the written statement, has denied the case of the Applicants. It is alleged that all the formalities which are required to be complied with by the creditor, were complied with. Applicants were duly served the notices under Section 13(2); 13(4) as well as auction notice. It is submitted that there is no merit in the present SA and the same be dismissed.

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I have heard Mr.Ankit Kaushal, counsel for the Applicants and Mr.Vineet Sehgal, counsel for Respondent FI.

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Mr.Ankit Kaushal, counsel for the Applicants has argued that though Respondent FI has alleged that it has followed proper procedure and complied with the SARFAESI Act, yet, it failed to produce on record any material to show that the notices under Section 13(2); 13(4) and auction notics were duly served upon the Applicants. He further argued that there is no CERSAI registration. Mr.Kaushal submitted that Respondent FI itself had valued the property at Rs. 21,57,028/-. However, it fixed up the reserve price at Rs. 17.26 lacs and the property was sold at the reserve price. Counsel further submitted that the Applicants were never served with the auction notice. Accordingly, it is submitted that the sale is required to be set aside.

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Per contra , Mr.Sehgal, counsel for the Respondent FI has argued that the notices under Section 13(2) and 13(4) of the

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SA No.292 of 2023

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SARFAESI Act were duly served upon the Applicants. He has also produced the tracking report in respect of notice under Section 13(2) and 13(4). He further argued that though respondent FI has not produced on the record the tracking report in respect of the auction notice, yet, the auction notice was duly served upon the Applicants. Mr.Sehgal further submitted that the Applicants have not raised any objection in respect of CERSAI registration in the SA. Winging up his arguments, Mr.Sehgal submitted that the Hon’ble Supreme Court in Contempt Petition No. 158-159 of 2024, titled Celir LLP versus Mr. Sumati Prasad Bafna and others, decided on 13.12.2024 has held that the confirmed auctions should not be set aside unless there are glaring violations in conducting the auction. Mr.Sehgal submitted that there is no merit in the present SA and the same be dismissed.

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Mr. Harish Mahajan/auction purchaser states that he is a bona fide purchaser. He further submitted that after purchasing the property, he has made some improvement and spent around Rs.7-8 lacs on the same.

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I have considered the rival contentions.

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Applicants have challenged the auction on the ground that the notices under Section 13(2) and 13(4) of the SARFAESI Act and the auction notice was not served upon them. On the other hand, IIFL (Respondent FI) has produced on the record the postal receipts of the notices under Section 13(2) and 13(4) and the tracking reports. Further, the Applicants have alleged that they were not served with the auction notice. On the other hand, IIFL has produced on the record

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SA No.292 of 2023

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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postal receipt and publication. However, they have not produced on record the tracking reports. I am of the considered view that since the notices under Section 13(2) and 13(4) of the SARFAESI Act were duly served upon the Applicants at the same address, it is not believable that the auction notice was not served upon them at the given address. As far as CERSAI registration is concerned, Applicants have not raised this plea in the Securitization Application.

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Having considered whole of the case, I am of the considered view that there is no merit in the present SA. The same is hereby dismissed . 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/27.03.2025

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

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Pyare Lal v. India Infoline Home Finance Limited

Case brief

What is this about?

What did the court decide?

Pyare Lal v. India Infoline Home Finance Limited

Case brief

What is this about?

What did the court decide?

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