Dismissed

Ankit Khandelwal v. Tata Capital and Housing Finance Ltd.

DRT19 Jun 2025SA/37/2024

Case brief

AI extract

What is this about?

In SA 37/2024, an applicant sought quashing of a failed auction and directed one-time settlement under the SARFAESI Act. The DRT held the application time-barred except for the failed auction, dismissed it due to the applicant's fraudulent conduct, and directed redemption payment.

What did the court decide?

Application dismissed; applicant directed to deposit Rs. 3,00,100/-. Course awarded.

Ankit Khandelwal versus Tata Capital and Housing… — Contract and Commercial Disputes | DRT (2025)

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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DEBTS RECOVERY TRIBUNAL, JAIPUR PRESIDING OFFICER: SH. VIMAL GUPTA

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SA No.- 37/2024

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Order Reserved on 26.05.2025.

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Order Pronounced on 19.06.2025.

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Ankit Khandelwal S/o Shri Suresh Khandelwal R/o A-133-A, Gurujambeshwar Nagar, Gandhi Path, Vaishali Nagar, Jaipur- 302021, Rajasthan.

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...Applicant/Borrower

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Versus

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Authorized officer, Tata Capital & Housing finance Ltd. , SR 1 to 5, 1st Floor, The Guman 1, F Block Vishali Nagar, Jaipur 302021.

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..….. Respondent FI

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Present:

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Mr. Palash Srivastava, Counsel for the Applicant

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Mr. Pramod Kumar, Ld. Counsel for the Respondent Bank/FI

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(Final Order)

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(19.06.2025)

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SA applicant has filed this Securitization Application (SA) before this Hon'ble Tribunal against the Respondent Bank/Financial Institution, Tata Capital and Housing Finance Ltd. The Applicant seeks, inter alia, the quashing and setting aside of the auction of the subject mortgaged property conducted by the Respondent Bank/FI, and for the securitization application to be allowed.

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Counsel for the applicant submits that applicant has availed a housing loan facility from Respondent FI bearing Loan Account Number 00000000010169534 and mortgaged Flat no. 801, 8th Floor, Wing No.1, The Crest Plot No. A-4, Airport Enclave, Jaipur. Applicant was regularly depositing the installments on time but

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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the builder has delayed the possession intentionally so in the dispute to get the possession on time, some of the installments could not be paid on time and finally the loan account was declared as NPA. It is pertinent to mention here that no notice under section 13(2) of the Act of 2002 was received by the applicant.

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It is submitted that applicant was always ready and willing to deposit the due amount and given offer of one time settlement, but no heed was paid to applicant by Respondent FI intentionally as they are in collusion with the builder and has failed to reply or pass any order on the one time settlement offer for payment of Rs.1.60 crore, sent at Respondent FI Jaipur office on 11.09.2023 but instead of deciding the offer of one time settlement, the Respondent FI has got possession of the subject mortgaged property and the decision is still pending.

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It is further submitted that in the meantime applicant got to know that a securitization application bearing no. 75/2023 was filed by Ashok Sing (builder) before Debts Recovery Tribunal, Jaipur against the auction notice dated 16.12.2022 and applicant was impleaded as respondent no.2 in that S.A but notice of S.A. could not be served upon the S.A. applicant and the same was finally decided on 31.10.2023, so the applicant immediately filed an application to get the certified copy of the S.A. along with final order dated 31.10.2023 and the same was received by the applicant on 22.12.2023 and got to know about the decision of the DRT, Jaipur by which the above mentioned S.A was disposed of with some directions.

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It is submitted that the applicant is bonafide borrower so he immediately sent a legal notice to the Respondent FI on 21.12.2023 and requested not to finalize the settlement with the builder and to not handover the copy of agreement to sale dated

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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20.01.2018 to builder and as per order dated 31.10.2023 also give one chance of settlement to borrower and further requested to provide latest statement of account.

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It is submitted that the above mentioned legal notice was served upon the Respondent FI and reply of the same was sent by respondent FI on 25.12.2023 in which they have refused to accept the proposal of the applicant.

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It is submitted that the applicant was always in contact with the Respondent FI and on 17.01.2024 while approaching the Respondent FI he got information that they have put the subject mortgaged property on auction without giving any chance of settlement to the applicant. He downloaded the copy of e-auction notice dated 13.01.2024 on 17.01.2024. It is pertinent to mention here that no bid was received so the matter was kept for argument on 26.02.2024.

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Subsequently, an amended SA filed by the Applicant on 26.02.2024 indicated an auction was scheduled for 28.02.2024, based on an auction notice dated 06.02.2024. However, on 28.02.2024, the Counsel for the Respondent again submitted that no bid had been received for the auction scheduled on that date.

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It is submitted that despite these previous instances of no bids being received, the Ld. Counsel for the Respondent bank submitted on 24.07.2024 that the auction of the subject mortgaged property has been successfully conducted. Thus, despite the fact that the matter was listed on several date(s) but the Respondent Bank concealed the factum of auction causing grave loss to the SA Applicant and the mandatory provisions of the SARFAESI Act 2002 and Rules made there in under were given a go-by.

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19.07.2024, the Applicant filed IA No. 1141/2024, specifically seeking details of the auction. Furthermore, on

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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24.07.2024, the Applicant filed IA No. 1186/2024 for amendment in the SA along with the amended SA, and significantly, IA No. 1187/2024 for the impleadment of the auction purchaser.

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The Applicant in pursuance of the order dated 21.02.2025, immediately impleaded all necessary parties to the SA.

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It is submitted that the SA Applicant humbly submits that neither any notice of redemption in terms of Rule 8(6) was served upon the Borrower nor any compliance of Rule 9(1) was made by Bank and auction was conducted in a botched up & clandestine manner which is liable to be quashed and set-aside.

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It is submitted that the SA Applicant also submits that the Auction Purchaser without any intimation and erroneously deposited an amount of Rs. 3,00,100/- under Section 1941A of the Income Tax Act. The said Section provides that the buyer of an immobile property must deduct TDS at 1% while making the payment to the owner or seller of the property. The SA Applicant has not claimed benefit of this amount and has instructed his CA to state in filing that this fund he is not utilizing in calculation for Income Tax and same can be refunded to the original sources. Further, in this regard Form 26B is a tax form used to request a refund of excess Tax Deducted at Source or Tax Collected at Source. If the deductor has deducted more TDS than what is required to be deducted, they can claim refund by submitting Form 26B to the Income Tax Department. Thus, the SA applicant is ready to submit necessary undertaking in this regard.

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Further, it is prayed that the hold on my savings account with HDFC Bank 50100253099813, with Gandhi Path Vaishali Branch, has resulted in blocking the amount lying therein and the SA Applicant is ready & consents to return the amount to the borrower for the amount for which he prepared the Demand Draft in the name of Bank but failed to pay the same to the Bank and

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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submit necessary documents/ instruments or amount be returned to the Builder without prejudice and subject to keeping open the legal rights. However, as the claim against the Builder remains, the SA Applicant be permitted to avail remedies under the applicable law.

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It is submitted that the applicant was always ready and willing to pay and settle the dispute, the same is clear from their representations and it is well settled law that the scheme of the Act of 2002 does not permit or postulates recovery of disputed debts. The scheme of the Act of 2002 is laid down, authorizes a secured creditor to recover debts which are undisputed and where the borrower is a willful defaulter so the e-auction notice dated 06.02.2024 is bad in the eye of law as also not maintainable.

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It is submitted that the notice under section 13(2), 13 (4) & e-auction notice dated 06.02.2024 of the Act, of 2002, the same was not published in newspaper having proper circulation at Jaipur where the mortgaged property is situated otherwise so the procedure of adopted by the non-applicant is against the provisions of the Act of 2002.

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It is submitted that the e-auction notice has referred to in sub-rule (6) Rule 8 shall also be published in two leading news paper one is vermicular language having sufficient circulation in that locality, by the authorized officer that was not complying as well as other provision of this rule was also not complied so e- auction notice dated 06.02.2024 is against the provisions of SARFEASI Act and liable to be quashed on this single ground.

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It is submitted that as per the act of 2002 and rule thereafter, the auction notice should be of minimum fifteen days but the e-auction notice dated 06.02.2024 was received to the applicant on 10.02.2024 and auction is decided on 28.02.2024,

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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while the applicant is ready to deposit the amount, so the auction notice dated 13.01.2023 itself is not proper and valid in eye of law and deserves to be quash on this ground alone.

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It is submitted by the applicant that the bad intention of the Respondent FI is clear from they did not decide the representation of the applicant and directly put the property in auction. This action of putting the property on auction of the Respondent FI is against the SARFAESI Act also.

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It is submitted that the applicant was always ready and willing to deposit the due amount otherwise also the mortgaged property is having higher value than the amount due, which is clearly shown form the auction notice, the Respondents could have more options like one time settlement, restructure of loan account etc., as the loan is sufficiently secured by equitable mortgaged property but the all such requests were rejected by the respondent FI and they did not give second chance to get the finance facility form the sources and initiated proceeding under the Act of 2002 and issued e-auction notice dated 06.02.2024, such conducts of the Respondent FI are against the policy and guidelines of the Reserve Bank of India.

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Concluding the arguments on behalf of the applicant, Counsel for the applicant prayed to allow the Securitization Application No. SA/37/2024. The e-auction notice dated 06.02.2024 may kindly be quashed and set aside and further if any proceeding under section 13(2) and proceedings u/s 13(4) are done may kindly be quashed and set aside and further all the action taken against the applicant during pendency of this S.A may kindly be quash and set aside. The Respondent FI may be directed to accept the one time settlement offer and finally settle the loan account. Award cost in favour of the applicant for the illegal action taken by the non-applicant.

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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In reply of the all the objections taken by the applicant Counsel for the Respondent submits that applicant has challenged entire proceedings of respondent whereas as per settled law any action of secured creditor can be challenged within a period of 45 days from the date of action. In the present matter applicant was very well aware of entire proceedings but despite that he remained silent and intentionally challenged the same after a long delay, therefore apart from auction notice (which resulted into failure) all proceedings are time barred and applicant is debarred from challenging the same. It is further submitted that since auction resulted into failure therefore present SA has become infracutous and deserves to be dismissed.

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It is submitted that in the present application, applicant had only taken a ground of OTS (one time settlement) which respondent FI had already rejected however it is to be submitted that Hon’ble Supreme court in various judgment had already held that no borrower can, as a matter of right pray for a grant for benefit of one time settlement therefore in light of precedent present SA application filed by Applicant is devoid of merit.

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It is submitted that SA applicant’s right to redemption under section 13(8) has already been closed once the auction notice has been published. It is further submitted that so far as challenge of auction is concerned the same is within limitation and all other challenges are time barred and applicant is deprived from challenging the same and no bid came in auction.

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In response to the submission of the applicant that they have deposited regular payment, the respondent vehemently denied the same and submitted that the same is proved from the fact that account was classified as NPA and proceedings under SARFAESI Act has been initiated. It is vehemently denied that demand notice under Section 13(2) was not served upon

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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applicant. The contrary fact is this that applicant was aware of entire proceedings and demand notice was also served upon him.

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Counsel for the Respondent argued that applicant was never ready and willing to make payment of respondent FI and further that applicant can’t claim settlement as a matter of right nor the same is within the purview of Section 17 of SARFAESI Act. It is further denied that there is any collusion between respondent FI and builder and contentions taken herein are absolutely false. It is relevant to mention here in the SA filed by builder vide title as Ashok Singh vs Tata Capital Housing Finance Limited, where SA applicant had avoided the proceeding, it came to knowledge of respondent that SA applicant had cancelled the unit and builder had agreed to sold the said mortgaged property to some other person. The said facts clearly show SA applicant in connivance with builder to give wrongful loss to the respondent and to gain to them self for which respondent had taken action under applicable law.

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It is submitted by the Respondent FI that so far as the facts related to filing of SA No. 75/2023 are concerned. Rest of the pleas are not related to respondent FI, however it is pertinent to mention here that applicant was very well aware of the proceedings of above said SA No. 75/2023 and the same is proved from the notice dated 28.09.2023 wherein applicant stated that “without prejudice to the legal rights and contentions available to us in the pending proceedings before Hon’ble DRT” but despite that applicant did not appear before Hon’ble Tribunal rather acted at the instance and in collusion with builder.

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It is submitted that applicant’s notice was replied by respondent and applicant can’t state as to not to finalize settlement as the same was done as per the order of this

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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Tribunal. It is also submitted that builder failed to honor the OTS as per order of this Tribunal therefore respondent revoked the same. It is further submitted that this Tribunal did not grant any opportunity to applicant and applicant is misinterpreting the order passed by this Tribunal.

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It is submitted that respondent put the property to auction as per the provisions of law and no buyer turned up therefore the said auction resulted into failure. It is further submitted that applicant can’t claim OTS as a matter of right and in reply to notice dated 21.12.2023 respondent has also cleared the said fact. It is further replied that OTS is not within the purview of Section 17 of SARFAESI Act. It is also to be submitted that SA applicant had also lost its right to redemption as per section 13(8) of SARFAESI act and precedent of Hon’ble Supreme court.

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It is submitted that applicant is admitting that sale notice has been received by him and so far as other borrower/guarantors are concerned, in that regard it is submitted that no such borrower/co-borrower/guarantor has appeared before this Tribunal and stated that the sale notice was not received by them. It is further replied that respondent served auction notice on all persons on all addresses available with them.

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It is submitted that applicant is not at all aggrieved by any action of respondent FI and has filed present SA just to delay the recovery proceedings of respondent FI.

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It is submitted that from the reply submitted herein above, it is very much clear that there is nothing illegal in the actions taken by the Respondent FI. It is submitted that possession notice was duly sent to applicant as well as published in two leadings newspapers. It is submitted that auction notice was also

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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duly published in two leading newspapers and the same is annexed with reply to SA.

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It is submitted that applicant is admitting that auction notice was received by him on 10.2.2024 and auction is on 28.02.2024 and therefore there is a clear gap of 15 days. It is further submitted that applicant has lost his right of redemption and law is settled in this regard by Hon’ble Apex Court. It is further replied that applicant has stated in this Para that auction notice dated 13.01.2024 is not proper and valid whereas no auction was conducted on 13.01.2024.

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It is submitted that applicant was never ready to deposit the amount and is making false statement. It is replied that even no buyer turned up in the previous auction revealing that the property did not fetch the value mentioned in the auction notice and if applicant really feels that the property is of much high value he could have participated in the auction or brought any buyer who is ready and willing to purchase the same but did not do anything showing that applicant is making false statement. It is vehemently denied that any act of respondent is against the guidelines of RBI. On the contrary law is settled that after receipt of demand notice borrower is under statutory liability to make payment as per demand notice within a period of 60 days which applicant failed to do so.

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It is submitted that in view of the reply submitted herein above it is clear that entire action of respondent FI is as per law and applicants miserably failed to point out any illegality in the action of respondent FI and therefore applicants are not entitled to any kind of relief as prayed by them. It is submitted that so far as prayer of quashing of demand notice and possession notice are concerned the same are time barred and deserves to be rejected. Further that so far as prayer as to auction is concerned, it is

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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submitted that auction turned unsuccessful and thus SA of applicant has become infractuous.

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It is therefore humbly prayed by the Respondent FI that this SA filed by the applicants being devoid of merits and actions of respondent FI being in accordance with the provisions of SARFAESI Act 2002 and rules made therein, may kindly be dismissed with cost. Also present SA deserves to be dismissed as being infractuous.

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Heard arguments and perused the record.

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As per Respondent FI the challenge to Securitization action is time barred and only challenge which is within limitation is auction which failed.

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The applicant deliberately did not appear in SA filed by the builder through Sh. Ashok Singh, Authorized Representative and kept a watch on proceedings.

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He got his money back from builder and got agreement cancelled. To clear the liability of builder he got prepared the Demand Drafts in favour lender, gave copy to builder to show that liability of Lender will be cleared but mischievously, Demand Drafts were shown, but never given to bank, thus he played fraud with respondent FI and builder both.

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Once the agreement was cancelled, the builder sold the property to some other person and the applicant enjoyed the money. Again some agreement was made for the property.

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Once the agreement was cancelled, the applicant cannot rely upon the same to claim the relief for the said property, may be later he again had some agreement.

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The Tribunal is of the opinion that the applicant is trying to arm-twist builder for any amount which might be due to him, but for that he has remedies as per law. He lost any right over the said property as no charge was be created.

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Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

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The property reverted back to builder, but with right of bank to recover its dues. In light of this, this Securitization Application stands dismissed with direction to applicant to deposit Rs. 3,00,100/- with respondent FI.

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The substantial amount was still lying in Saving Bank Account of applicant which was got attached. The parties who do not come with clean hands before the Court are not entitled for any relief. The applicant is not the owner of said property having received his money back and getting cancelled the agreement.

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The Securitization Application is dismissed with cost of Rs. 50,000/- payable to DRT Bar Association, Jaipur.

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File be consigned to record, as per rules. Copy of order be uploaded on website.

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(Vimal Gupta) Presiding Officer Debts Recovery Tribunal, Jaipur

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Ankit Khandelwal v. Tata Capital and Housing Finance Ltd.

Case brief

What is this about?

What did the court decide?

Ankit Khandelwal v. Tata Capital and Housing Finance Ltd.

Case brief

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