Narayan Bhagvantrao Jadhav v. Shubham Housing Development Finance Company Limited

DRT14 May 2025SA/315/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Securitisation Application by borrowers challenging a Court Commissioner's notice to take physical possession of mortgaged property. The court held the application was not maintainable as earlier challenges to the same demand and order were already dismissed by the Tribunal and DRAT, and statutory procedures under SARFAESI Act were followed.

What the court decided

AI extract

Narayan Bhagvantrao Jadhav versus Shubham Housing Development… — Banking and Recovery | DRT (2025)

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Presented on: 30.08.2024 Registered on: 13.09.2024 Decided on: 14.05.2025 Duration: Y M D 00 08 14

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IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Dr. J.R. Chauhan Presiding Officer)

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SECURITISATION APPLICATION No.315/2024

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Narayan Bhagvantrao Jadhav, Age : 52 Years, Occ : Agricultural, Resident of : House No. 18, NR Jagdamba Hotel, At Post Galle Borgaon, Tq. Khultabad, Chhtrapati Sambhaji Nagar (Aurangabad) - 431102.

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Sunita Narayan Jadhav, Age : 46 Years, Occ : Housewife, Resident of : House No. 18, NR … Applicants

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Jagdamba Hotel, At Post Galle Borgaon, Tq. Khultabad, Chhtrapati Sambhaji Nagar (Aurangabad) - 431102.

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Versus

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Shubham Housing Development Finance Company Limited Address at : D-305, Ground Floor, Sarvodaya Enclave, New Delhi - 110017 Through authorized officer.

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Shubham Housing Development

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[SBJ] (SA No.315/2024) Page 1 of 19

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Finance Company Limited Address at : Shop No. A9/A10, 1^st Floor, … Respondents Gurunath Sankul, Above HDFC Bank, Kalda Corner, Chetna Nagar, Aurangabad-431 001 Through its Branch Manager.

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APPEARANCES

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For the Applicants Mr. R.D. Sakhare - Advocate

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Snehal P. Kulkarni – Advocate

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For Respondent Nos.1 and 2

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JUDGMENT (Delivered on 14^th May, 2025)

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This Securitization Application No.315/2024 has filed by the applicant against the Shubham Housing Development Finance Company Limited and its Branch Manager for setting aside the notice issued by the Court Commissioner dated 02.07.2024 and for restoration of the physical possession of the suit property i.e. All the piece and parcel of the immovable property Milkat No.48, admeasuring 5625 Sq. feet Galleborgaon, Taluka Khultabad, District Aurangabad, taken by the Court Commissioner on 19.07.2024.

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Brief facts of the application are as under :

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The applicant is a principal borrower and an agriculturist

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and the entire family depends upon agricultural income. The applicant No.2 is the co-borrower and wife of the appellant No.1. The respondents are housing finance company limited and engaged in providing financial assistance to the needy persons. The respondent sanctioned loan facility of Rs.10,28,391/- to the applicants. The respondent Finance Company has obtained security by way of mortgage of the house property of the applicants.

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It is submitted by the applicants that the account has been wrongly classified as NPA and the respondent finance company have to put strict proof regarding classification of the account as NPA in the light of the circulars and guidelines of the Reserve Bank of India. It is further submitted that the respondent finance company through its authorized officer has issued demand notice on 12.04.2018 under Section 13(2) of the SARFAESI Act but the same neither duly served nor through RPAD or by hand upon the applicants. The measures taken by the respondents are bad in law and hence, the same deserves to be quashed and set aside.

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It is further submitted by the applicants that the authorized officer of the respondent finance company has taken action

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under section 14 of the SARFAESI Act, 2002 and has taken symbolic possession of the house property of the applicant on 14.08.2018. The possession notice is not served to the present applicants. The respondent company has not complied the statutory requirement Section 14 (1) (b) (i) of the SARFAESI Act. The respondent company has not stated the total claim as on the date of filing of the application.

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The applicants further submitted that after order of the Learned Chief Judicial Magistrate, the Court Commissioner has issued notice on 15.03.2024 to the applicants thereby intimating the physical possession of the house property which was scheduled on 02.04.2024. However, the time was not mentioned in the said notice dated 15.03.2024. The applicants are residing in the said house property with other family members.

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It is further submitted by the applicants that the applicants preferred Securitisation Application No.114/2024 which was disposed off as the applicants were ready and willing to deposit Rs.3 Lacs and also ready to settle the matter and the Tribunal left to the respondent that if they wish to defer the possession by taking Rs.3 Lacs and either entered into

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one time settlement by the parties and accordingly, all the pending interlocutory applications were disposed off.

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Aggrieved by the order of this Tribunal, dated 30.03.2024, the applicants preferred an Appeal bearing Regular Appeal (Diary) No.1230/2024 before the Hon’ble Debts recovery Appellate Tribunal alongwith Waiver Application No.392/2024. The Hon’ble DRAT passed an order that the applicant shall deposit 50% of the demand notice amount on the same date through RTGS and remaining balance amount within two weeks but due to very weak financial condition, the applicants could not deposit the balance amount and as such, the said appeal dismissed for noncompliance.

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Thereafter, the Court Commissioner issued notice on 02.07.2024 for taking possession of the suit property on 19.07.2024. The applicant has filed this SA challenging the same on the Grounds mentioned in this SA at Paragraph No.5.18 (a) to (p) and Additional Grounds at Paragraph Nos.(i) to (x).

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The applicant has filed the present Securitisation Application and thereby prayed for allowing this SA for

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setting aside the notice issued by the Court Commissioner dated 02.07.2024 and for restoration of the physical possession of the suit property taken by the Court Commissioner on 19.07.2024.

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The respondent No.1 and 2 filed their say / reply vide Exhibit-6. The respondent No.1 and 2 submitted that the applicants have availed loan of Rs.10,28,391/- which was sanctioned on 29.09.2016 and the same is not repaid till today and hence, the respondents have taken legal steps. As the applicants have not paid amount of installments as per agreement and hence, their account categorized as NPA and as such respondents constrained to issue demand notice under Section 13(2) on 12.04.2018 and the said notice was duly served upon the applicants. The paper publication was also published on 27.04.2018. Despite notice the applicants failed to pay the amount, therefore, they have issued legal notice under Section 13(4) of the SARFAESI Act on 14.08.2018 which was also duly served on the applicants and the paper publication in respect of the same was published on 18.08.2018. As such, the respondents have taken symbolic possession and filed application before the Chief Judicial Magistrate for

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[SBJ] (SA No.315/2024) Page 6 of 19

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obtaining the physical possession of the secured assets. The said application was allowed and the Court Commissioner was appointed for taking possession of the secured assets of the applicants. As such, for taking possession of the secured assets, a prior notice was issued to the applicants on 15.03.2024.

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It is further submitted by the respondent Nos.1 and 2 that the applicants challenged the action taken by the respondents by filing Securitisation Application No.114/2024 before this Tribunal which was dismissed. After passing of the order, the applicants paid Rs.3 Lacs (Rupees Three Lacs only) and have entered into agreement dated 17.05.2024 and thereby submitted that they will repay an amount of Rs.19,00,000/- (Rupees Nineteen Lacs only) as One Time Settlement amount. The applicants have also issued post-dated cheque No.940397 in favour of the respondents but the said amount is not paid by the applicants. The applicants have also filed an appeal Diary No.1230/2024 before the Hon’ble DRAT, Mumbai, which was dismissed on 26.06.2024 on the ground that the applicants failed to repay the amount which was directed by the Hon’ble DRAT.

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It is further submitted by the respondents that the applicants have forcefully taken the possession of the secured asset by entering into it and also residing in the secured assets. Therefore, the respondents have lodged report with Superintendent of Police, Aurangabad on 16.08.2024. It is also submitted that the applicants have availed loan in 2016 and the applicants have to pay total outstanding dues of Rs.31,15,128/-till 15.02.2025 of the respondents. The applicants are also refusing to pay the said total outstanding amount of the respondents.

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The respondent bank submits that the applicants are trying to misguide this Tribunal by making general statements and also trying to delay the sale of secured assets by all means including unlawful activities. There is no substance in the petition and as such the same is liable to be dismissed with heavy costs.

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The applicants have filed Rejoinder at Exhibit-7. The applicants have denied the service of Demand Notice dated 12.04.2018 which was not duly served upon them. The respondent company has to give strict proof to that effect. Without service of the demand notice dated 12.04.2018, the respondent finance company initiated action under section

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13(4) of the SARFAESI Act against the suit house property. It is the case of the applicants that if the possession of the secured asset is / was taken by the respondent finance company on 29.06.2018 and the same was published in newspaper on 18.08.2019, is against the provision of the SARFAESI Act and Rules. Therefore, the action initiated by the respondent finance company be declared as bad in law and the same deserves to be dismissed. The possession notice and the Panchanama as required under the SARFAESI Act is not given to the applicants nor any such notice was affixed at the conspicuous place of the said house property. The applicants have not complied the statutory provisions under Section 14 of the SARFAESI Act. The total claim of the respondent as on the date of filing of the application has not been stated by the respondents and debited various incidental charges to the loan account and has capitalized the same from time to time in the outstanding and has charged future and penal interest on the compounded amount which is held illegal by the Hon’ble Apex Court in the matter of Central Bank of India Vs. Ravindra and others. After mortgage of the property of the applicants in favour of the respondent Nos.1 and 2, the

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respondent has not created charge on Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI).

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The learned counsel for the respondents filed Pursis (Exhibit-08) alongwith documents filed by the learned counsel for the respondents including Certificate of NonPerforming Asset as per RBI / NHB Guidelines dated 05.02.2018, Certified true copy of the resolution passed in the Meeting of Board of Directors of the respondent dated 16.05.2024 alongwith Annexure A to the Board Resolution, Notice u/Sec. 13(2) of SARFAESI Act published in daily Times Nation dated 27.04.2018, and in daily Marathi newspaper dated 26.04.2018 and Registration of Security Interest Acknowledgement Report of Central Registry of Securitisation Asset Reconstruction and Security Interest of India, which is taken on record. The applicants have not filed any document to rebut the evidence of the respondents.

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I have heard learned counsel for the parties at length.

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The learned counsel for the applicants argued that the Respondent Financial Company has taken possession of the

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secured asset on 19.07.2024 in view of possession notice dated 02.07.2024 in violation of provisions of the SARFAESI Act as the applicants never received Demand Notice under section 13(2) and even no publication of Demand Notice has been produced alongwith the reply. It was further argued that no date of NPA has been mentioned even in affidavit submitted before the learned Chief Judicial Magistrate and order dated 21.02.2024 has been obtained from the learned Chief Judicial Magistrate Aurangabad on the basis of false information. It was further argued that no prior notice of possession was served upon the applicants and the possession has been taken in violation of law which is liable to be restored to the applicants.

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It was further argued that the applicants submitted One Time Settlement proposal which has not been decided by the respondent Finance Company. It was also submitted that the claim of the respondents is not sustainable as the charge pertinent to the immovable property was not registered with CERSAI (Central Registry).

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It was further argued that the applicants received Court Commissioner Notice dated 15.03.2024 and immediately thereafter the applicants preferred Securitisation

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Application No.114/2024 before the DRT, Aurangabad alongwith Interlocutory Application No.592/2024 and this Interlocutory Application was disposed of by the Tribunal vide Order dated 30.03.2024 and as per this order dated 30.03.2024, the applicants handed over Demand Draft of Rs.3,00,000/- (Rupees Three Lacs only) to the respondents with One Time Settlement proposal. It was also argued that after dismissal of Securitisation Application No.114/2024, respondent through Court Commissioner again issued Possession Notice dated 29.05.2024 for taking possession on 13.06.2024 and the applicants feeling aggrieved with Order dated 30.03.2024 passed by the DRT, Aurangabad moved Appeal before the Hon’ble DRAT Mumbai vide Regular Appeal (Diary) No.1230/2024 but that was dismissed as the applicants failed to make compliance of the order of the Hon’ble DRAT Mumbai. It was also submitted that the physical possession taken by the Court Commissioner on 19.07.2024 is violated the settled principles of law as no reasonable opportunity to resolve the issue was provided and possession was taken illegally and forcibly which was a residential house and prayed for setting aside the possession notice dated 02.07.2024 and possession

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proceedings dated 19.07.2024 with the directions to the respondents to restore the possession of the secured assets to the applicants.

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On the otherside, it was argued by the learned counsel for the respondents that the respondents have made compliance of SARFAESI Act and Rules made thereunder. It was argued that a demand notice under section 13(2) of the Act was issued on 12.04.2018 for Rs.10,76,687/- but the applicant did not pay the amount and even no representation was submitted to the respondents. It was also argued that the demand notice was published in two newspapers i.e. Daily Times of India dated 27.04.2018 and in local newspaper Tarun Bharat dated 27.04.2018. It was further argued that the respondents have moved application under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate, Aurangabad and obtained order on 21.02.2024 and thereafter initiated proceedings for possession after serving notice dated 15.03.2024 issued by the Court Commissioner and thereafter the applicants filed Securitisation which was Application No.114/2024 dismissed on 30.03.2024 and the Appeal preferred by the applicants was also dismissed on 26.06.2024 by the Hon’ble

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DRAT Mumbai and by filing the present Securitisation Application, the applicant has challenged the same demand notice dated 12.04.2018 and the Chief Judicial Magistrate, Aurangabad order dated 21.02.2024 which is not maintainable.

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It was further argued that the applicants settled the loan account for Rs.19 Lacs (Rupees Nineteen Lacs only) vide Agreement dated 17.05.2024 and submitted a cheque of Rs.18,70,000/- (Rupees Eighteen Lacs Seventy Thousand only) which was dishonoured and the applicants had to surrender the possession voluntarily on 11.06.2024 but they did not make compliance of this OTS agreement and thereafter notice dated 02.07.2024 for taking possession was issued to the applicants and the possession was taken on 19.07.2024 as per law through Court Commissioner appointed by the learned Chief Judicial Magistrate, Aurangabad vide Order dated 21.02.2024. It was also argued that the charge of the respondents was registered with CERSAI (Central Registry) as per certificate produce d with the Pursis Exhibit-08 and the applicants have no merit and dismissal of the Securitisation Application No.315/2024 was prayed for.

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After having heard both the sides and going through the material on record, I am of the considered view that the present Securitisation Application No.315/2024 is devoid of merits and the same is liable to be dismissed for the reasons recorded hereinafter.

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REASONS

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The respondents have produced on record vide Pursis Exhibit-8 that the charge pertaining to mortgage of immovable property was registered with the Central Registry of Securitisation Assets Reconstruction and Security Interest of India (CERSAI) as per registration of Security Interest acknowledgement report.

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It is the admitted case of the applicants that against the possession notice dated 15.03.2024 issued by the Court Commissioner in view of learned Chief Judicial Magistrate, Aurangabad order dated 21.02.2024 for taking physical possession of the suit property on 02.04.2024, the same was challenged by the applicants by filing Securitisation Application No.114/2024 before this Tribunal. This Tribunal vide Order dated 30.03.2024 produced by the applicants as Annexure A-6, SA No.114/2024 was disposed of and file was consigned to the record room. This SA

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No.114/2024 was filed by the applicants and challenged Demand Notice dated 12.04.2018 issued by the respondents under section 13(2) of the SARFAESI Act as well as Order dated 21.02.2024 passed by the learned Chief Judicial Magistrate, Aurangabad under Section 14 of the SARFAESI Act in Criminal Misc. Application No.2807/2019 as illegal, null and void and liable to be quashed and set-aside. A copy of Securitisation Application No.114/2024 has been produced on record by the applicants as Annexure-A-5 (Page 42 of the SA). This Securitisation Application of the applicant was dismissed / disposed of by the DRT Aurangabad vide Order dated 30.03.2024. The applicants preferred Appeal against this order before the Hon’ble DRAT, Mumbai and vide Order Annexure A-9 dated 11.06.2024, the applicants were directed to deposit 50% of the Demand Notice amount but the applicants failed to make compliance of this order of the Hon’ble DRAT, Mumbai and ultimately the Appeal filed by the applicants was dismissed on 26.06.2024 for non-compliance of the order and copy of the same order has been placed on record by the applicants at Page No.91 of the Securitisation Application.

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When SA No.114/2024 was dismissed by the DRT, Aurangabad on 30.03.2024 and Appeal against this order was also dismissed by the Hon’ble DRAT, Mumbai on 26.06.2024, then filing of the present Securitisation Application No.315/2024 challenging the same demand notice dated 12.04.2018 as well as same Chief Judicial Magistrate, Aurangabad Order dated 21.02.2024 is not maintainable. Even order of the Hon’ble DRAT, Mumbai dated 11.06.2024 Annexure A-9 is appreciated, the demand notices were published in two newspapers including vernacular newspaper. Even both the publication have been produced on record by the respondents as per Pursis Exhibit-08. After publication of Demand Notice in two newspapers it cannot be said that the Demand Notice was not in the knowledge of the applicants. A proper notice of possession Annexure-08 dated 02.07.2024 was given to the applicants through Court Commissioner and Court Commissioner had taken possession of the secured asset on 19.07.2024 and thereafter handed over to the Authorised Officer of the Respondents. Panchanama as well as Taba Pavti were prepared and the copies of the same have been produced on record as Annexure A-11 by the applicants. It

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was nowhere pleaded and submitted during the course of arguments that both these documents suffered from any illegality. Therefore, the possession has been taken by the respondents by following proper procedure under the SARFAESI Act and Rule made thereunder.

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It may be noted here that the symbolic possession was taken by the respondents on 14.08.2018 and physical possession was taken on 19.07.2024 and publication of physical possession notice was also made on 18.08.2019. It is worthwhile to mention here that the applicants even tried to interfere with the possession of the respondents as after taking possession, the applicants tried to enter forcibly into the premises and the respondents lodged complaint Exhibit R-3 with Superintendent of Police, Aurangabad on 16.08.2025. Therefore, there is no apparent illegality in the possession proceedings conducted by the respondents at the time of taking physical possession of the secured asset on 19.07.2024 and possession to the applicants can only be restored if there is fundamental breach of the provisions of the SARFAESI Act and Rules made thereunder. Therefore, the applicants are not entitled for restoration of possession and the demand notice dated 12.04.2018 and the order of

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learned Chief Judicial Magistrate dated 21.02.2024 are not liable to be set-aside on any of the grounds as alleged in the Securitisation Application and present Securitisation Application No.315/2024 is liable to be dismissed.

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