Dismissed

mohammad esa v. Iifl Home Finance Limited

DRT6 Feb 2025SA/33/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the applicant's securitisation application seeking to quash a sale notice. The court found that the respondent compliance with notice and possession provisions under the SARFAESI Act was evidenced by sufficient postal and publication proof.

What did the court decide?

The Securitisation Application was dismissed; interlocutory applications are closed.

mohammad esa versus Iifl Home Finance Limited — Company and Corporate | DRT (2025)

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IN THE DEBTS^{RECOVERYTRIBUNAL} -^II AT HYDERABAD

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DATED THIS THE SIXTH^{DAYOF FEBRUARY,2025}

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PRESENT: SH. RAIYESHWAR^{KOTHE,B'COM.,L,LB. (HONS.),IVI.A.} PRESIDING OFFICER

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SECURITISATION^{APPLICATIONNO.33 OF 2024}

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Between:

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Sri Mohammed^Esa 5/o Mohammed^Nizam Aged 45^years, Occ:^Business H. No. 19-3-294/264/R/66 P. No. 66 Part, Roshan ColonY Darga Guntal Shah Baba Vattepally, Falaknuma Hyderabad.

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Also at: H. No. 4-26-70/4/8 Suleman Nagar Hyderabad-500052.

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.......Applicant.

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And

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|IFL Home Finance Limited D. No. 5-9-22/8/501, sth Floor My Home Sarovar Plaza Secreta riat Road, Kh a irata ba d Hyderabad-500024 Rep by its Authorised Officer.

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....Respondent.

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Counsel for the Applicant : Mr.fttksrh-ffiar*b 0. tuf,ir^+aln Counsel for Respondent : Mr.N. B. Sudarshan.^{$K\b A\} 4 ffi

sA33/2024

-:ORDER:-

The Applicant filed the present Securitisation Application u/s.17(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Acl 2002") to set aside the sale notice dated 04.01.2024 fixing the date of auction as 09.02.2024,

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The case of the applicant as per the averments of securitisation application, in brief, is that applicant is the borrower and could not repay the loan due to losses in business in Covid.19 Pandemic period. Despite assuring that applicant's request to clear the overdue amount would be taken up with higher authorities, respondent bank took the physical possession of the secured asset without serving any notices under the provisions of SARFAESI Act and the Rules there under. Respondent has not followed the provisions of Rules 8(5), 8(6), 8(7) and 9(1) of the Security Interest (Enforcement) Rules, 2002. The sale notice has not been served on the applicant, neither affixed on the secured asset nor published in two newspapers.

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Respondent filed reply statement. The submissions of reply statement, in brief, are that on default in repayment by the applicant, respondent bank initiated securitisation^proceedings. The loan account was classified as NPA on 04.11.2022, issued demand notice u/s l3(2) on 77.77,2020. The^postal track reports of demand notice sent by registered post confirm delivery to the respectlve addressee. The demand notice has been^published in The New Indian Exprers andandhra Prabha ,,/,-i.*

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s^ 33/2024

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dailies on 24.LL.2022. As the applicant failed to clear the dues despite Section 13(2) notice, respondent issued Section 13(4) notice on 09.08.2023. The^possession notice has been^sentby registered post, alfixed on secured asset and^published in^The New Indian Express and Andhra Prabha dailies on^72.08.2023. These notices were followed by appointment of Advocate Commissioner u/s 14, who in turn took the^{physicalpossession} of the secured property. Subsequently, respondent^issuedthe impugned sale notice dated 04.01.2024. The impugned^sale notice has been sent to the applicant/co-borrowers by^registered post, published in newspapers on 06.01.2024 and affixed on the secured asset. Applicant has not approached^for OTS.

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Heard learned counsel appearinq for both the^parties. Perused the written arguments flled by the applicant and the^material brought on record.

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Learned counsel appearing for the applicant submits that^postal track reports show the notices were returned back to the sender with different endorsements of the postal department. Therefore, the notices cannot be deemed to have been served on him. The respondent has not registered the^{securitieswith} the Central Registry in compliance of Section 26-D. Despite the impugned sale notice has been stayed by this Tribunal vide order daled 25.0t.2024 in IA.198 of 2024, respondent issued another e-auction sale notice dated 28.08.2024 for sale of^property on 20.09.2024. Learned counsel would further submit that the respondent was desperate to dispose of the Property.^The amounts deposited by the applicant have not been duly accounted for while computing the outstanding dues. Learned ffir*"

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sA33l2024

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counsel relied on the^judgment of^{Hon'ble Kerala High Court in} batch of^petitions in OP^{(DRT) No.360} of^{2022 in limmyThomas} vs. Indian Bank decided on 24.05.2023.

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Learned counsel for the respondent, while^{reiterating the} pleadings taken in the reply statement, prayed for dismissal of the SA submitting that the^{respondent. bank took all the} securitisation measures in accordance^with the^{provisions of the} SARFAESI Act and the Rules^{there under.}

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7. Now the^points that arise for adjudication are: -

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i) llhether lhe Applicants made out any valid ground for quashing the sale notice dated 04.01 .2024 issued by the respondent against the SA schedule property under the provisions of Securitisation Act? To what relieJT

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Point No.(i):

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The auction notified under the impugned^{sale. notice dated} 04.01.2024 slating for 09.02.2024 was reportedly^not materialised. Accordingly, the SA becomes infructuous as far^as the sale notice dated 04.01.2024 is concerned. As^{per the} written arguments filed by the applicant, respondent bank issued another sale notice on 28.08.2024^putting the auction^of property on 20.09.2024, However, pleadings were not amended. Respondent filed reply statement on 05.11.2024, but there^{is no} whisper of the alleged fresh sale notice dated 28.08.2024 or^the outcome of the sale^pursuant to the second^sale notice.^Hence Av<..c (-/ 'o'Y''

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sA3312024

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nothing remains for adjudication as far as sale notices are concerned.

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As regards the grievance oF the applicant relating to compliance of provisions of Section 13(2), respondent placed material papers vide pages 48 to 60 evidencing service of demand notice dated 77.77.2022 to the borrower and co-borrowers. Respondent bank placed six photostat copies each of registration slips and postal track reports. Of these, four of the postal track reports confirm delivery. h addition to this, respondent placed Photostat copies of newspapers showing publication of demand notice vide page Nos. 61 and 62 of the material papers filed along with the reply statement. Such is the proof, I do not find any violation of provisions of the SARFAESI Act in serving the demand notice u/s 13(2) on the part of the respondent.

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As regards the compliance of Section 13(4) of the SARFAESI Act read with Rules 8(1) and 8(2), respondent placed sufficient proof vide material papers at page Nos. 78 to 82 in support of servin9 possession notice on the borrowers/co-borrowers, affixture on secured asset and^publication in two newspapers. Applicant contended in^page of written arguments, the^postal track reports relied on by the respondent establish that in some cases the possession notices sent by registered post have been returned due to insufficient address, whereas in some other cases those notices were returned for the reason of addressee cannot^be located and the door locked. At the same time, it^{is not the case} of the applicant that the notices were not sent at^correct addresses. The respondent Company has dispatched^possession notice to the borrower/co-borrowers by red post, affixed it ftr,/ - I

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sA3312024

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on the^{secured assetand published in two newspapers' Thus' I} do not^{see any flaw on the part of respondent Company in} complying^{Rules 8(1) and 8(2) ofSecuritvInterest} (Enforcement)^{Rules,2002' Accordingly'SA is liable to be} dismissed.

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Point No.(ii):

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In^{the result,the SA is dismissed'}

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12.consequently,InterlocutoryApplicationspending,ifany'shall stand closed'^{No order as to costs'}

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Communicate^{a copy of this order to the parties concerned'}

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(Dictoted to the^{Steno, tronscribedby him' corrected'signedond pronounced by me in} 'the open court on this the Sixth doy of Februory' 2025)'

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%rPe

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PRESIDING OFFICER

mohammad esa v. Iifl Home Finance Limited

Case brief

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mohammad esa v. Iifl Home Finance Limited

Case brief

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