Allowed

M/S Blue Mountain Education Society v. M/S Piramal Capital and Housing Finance Limited and Others

DRT29 Jul 2025SA/378/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed a Securitization Application seeking to set aside issuance of notices and impugned orders regarding possession of school premises. The court held that notices were not legally issued or served. While quashing the proceedings due to this defect, the court directed the applicant to deposit Rs.02 Crores into the respondent's account within one month as a condition f

What did the court decide?

Proceedings under the Act are quashed. Applicant directed to deposit Rs.02 Crores in respondent's loan account within one month.

M/S Blue Mountain Education Society versus M/S Piramal… — Company and Corporate | 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.378/2024

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Date of Institution: 24.09.2024 Date of Decision: 29.07.2025

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M/s Blue Mountain Education Society, a Society registered under the Societies Registration Act having registered Office at 62-B, Pocket-I, Mayur Vihar, Phase-III, New Delhi, through its Authorised Signatory Mr. Jai Gupta S/o Sh. Pawan Gupta

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--Applicant

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Versus

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1.M/s Piramal Capital and Housing Finance Limited, Show Room No.6, First Floor, Raksha Business Centre, Ambala Chandigarh Highway, Village Bishanpur, MC, Zirakpur, District Mohali through its Manager

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Authorised Officer, M/s Piramal Capital and Housing Finance Limited, A 301-302, 3^rd Floor, Elante Office Complex, Industrial Area, Phase-I, Chandigarh

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M/s Piramal Capital and Housing Finance Limited, 601, 6^th Floor, Amiti Building Agastya Corporate Park, Kamani Junction Opp. Fire Station, LBS Marg, Kurla (W) Mumbai, through its Chairman

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--Respondents

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Argued by: Sh. Rakesh Gupta, Advocate for Applicant Respondents 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) to set aside letter dated 18.09.2024, whereby possession of the secured asset is fixed for 26.09.2024, demand notice under Section 13(2) of the Act dated 14.06.2021, possession notice under Section 13(4) of the Act dated 16.12.2021 and order dated 29.06.2022

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SA/378/2024 M/S BLUE MOUNTAIN EDUCATION SOCIETY VS. M/S PIRAMAL CAPITAL AND HOUSING FINANCE LIMITED AND OTHERS

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passed by District Magistrate, Sangrur under Section 14 of the Act.

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(2) It was stated in the application that applicant is a Society duly registered under the Societies Registration Act; that applicant started a School in the name of Delhi Public School, Tehsil Dhuri, District Sangrur; that since the opening and operation of the School required financial facilities, therefore applicant approached erstwhile M/s Dewan Housing Finance Corporation Ltd. having an Office in SCO No.19, Second Floor, Sector 14, Gurugram, Haryana; that the request of applicant was considered by the said finance company and vide sanction letter dated 29.12.2017, applicant was sanctioned a loan of Rs.3,50,57,025/-; that said facility was repayable in 120 monthly installments and a schedule of the repayment was attached with the sanction letter; that applicant immediately started repaying and the payment right from the month of May, 2018 to March, 2020 was paid regularly without any delay or without any fail; that because of the moratorium announced by Reserve Bank of India, the installments for the months of April to August 2020 were not paid but thereafter, it was restarted in September, 2020 and the applicant continued to pay upto December, 2020; that in consideration of the financial facility availed by the applicant, School premises was mortgaged; that owing to Covid-19 Pandemic, there was a huge financial setback suffered by the applicant and probably by all financial institutions; that however, keeping in view the fact that the applicant was still in the initial stage of its operation, applicant did not have enough financial strength to withstand the financial crises, which came with along Covid-19; that keeping in view the quality of education given by the applicant’s School, there was a steady increase in the number of students from the year of inception i.e., 2017-2018 till 2020-2021; that however because of the Covid-19 strength started depleting and the number of students decreased in the year 2021-2022 and 2022-2023; that in addition to the decline in the number of students, even fee collection dropped drastically as many students were unable to

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SA/378/2024 M/S BLUE MOUNTAIN EDUCATION SOCIETY VS. M/S PIRAMAL CAPITAL AND HOUSING FINANCE LIMITED AND OTHERS

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pay the School Fee because of financial crises faced by their families and at the same time applicant was duty bound to pay the staff so that they do not starve; that therefore, applicant was not able to pay the installments w.e.f. January, 2021; that in the meantime, there was a huge financial crises and the financial institution which had given finance to the applicant i.e., M/s Dewan Housing Finance Corporation Ltd. having registered Office in Mumbai itself went into severe litigation and the functioning of M/s Dewan Housing Finance Corporation Ltd. was complete disrupted; that M/s Dewan Housing Finance Corporation Ltd. was itself into litigation, the matter having gone to various forums including learned National Company Law Tribunal, etc.; that applicant got in touch with the management of the erstwhile M/s Dewan Housing Finance Corporation Ltd. and applicant was told that the loan account of the applicant can be settled for a very meagre amount and the amount demanded was Rs.1 Crore; that before the One Time Settlement negotiated between the applicant and the erstwhile M/s Dewan Housing Finance Corporation Ltd. could be materialized, the applicant was informed that the said financial institution has been taken over by respondents; that although the so-called assignment of the financial debt of the erstwhile M/s Dewan Housing Finance Corporation Ltd. could not have been taken over the respondents without the consent of the applicant or at least without proper intimation to the applicant, yet it appears that the same was taken over by respondents without any intimation to the applicant; that applicant received a notice from Sh. R.L. Motwani, allegedly issued at the instance of erstwhile M/s Dewan Housing Finance Corporation Ltd. asking for overdue of Rs.14,62,052/-; that applicant was shocked to receive a communication from Tehsildar, Dhuri, Sangrur in which the applicant was informed that Tehsildar intends to take over the physical possession of the School building owned by the applicant presumably on the basis of some orders passed by District Magistrate, Sangrur in which the applicant was informed that the Tehsildar will take over the physical possession; that in

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4 SA/378/2024 M/S BLUE MOUNTAIN EDUCATION SOCIETY VS. M/S PIRAMAL CAPITAL AND HOUSING FINANCE LIMITED AND OTHERS

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the said communication the Tehsildar has not mentioned as on what date any authorization was given by District Magistrate, Sangrur to Tehsildar to take over the actual physical possession; that inspite applicant requested Tehsildar to give the copy of the order passed by District Magistrate, Sangrur, if any, no copy of the order was ever supplied to the applicant by any of the respondents and as such applicant was unable to place on record any order allegedly passed by the District Magistrate, Sangrur under Section 14 of the Act; that applicant went from pillar to post to find out what happened and it was thereafter that a photocopy of the demand notice issued by the erstwhile M/s Dewan Housing Finance Corporation Ltd. dated 14.06.2021 was given to the applicant; that applicant was also given a copy of the possession notice issued by respondents dated 16.12.2021; that after receiving the communication from the Tehsildar, applicant immediately tried to contact respondents so that a solution could be found out and wanted to settle the whole issue with respondents by offering a sum of Rs.02 Crores towards full and final satisfaction and also enclosed a Demand Draft of Rs.20 Lacs with the request that the same may be kept in no lien account till the one time settlement offer given by the applicant is settled; that when applicant visited the Office of respondents, applicant shocked to know that there is no such office exists and the said premises which was earlier possessed by M/s Dewan Housing Finance Corporation Ltd. stood vacated long ago; that then applicant immediately sent a representation to Head Office of respondents with demand draft of Rs.20 lacs with the prayer that the applicant wants to settle the dues of respondents; that since applicant failed to get any response from respondents, it constrained to file a CWP No.29465/2022 before Hon’ble High Court of Punjab and Haryana and taking cognizance of the same the Hon’ble High Court was pleased to grant interim protection subject to deposit of Rs.20 Lacs; that after the interim order, applicant approached respondents along with the certified copy of the order and a demand draft of Rs.20 Lacs but respondents refused to accept

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SA/378/2024

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M/S BLUE MOUNTAIN EDUCATION SOCIETY VS. M/S PIRAMAL CAPITAL AND HOUSING FINANCE LIMITED AND OTHERS

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the same and this fact was duly observed by the Hon’ble High Court in its order dated 09.01.2023 and further after the intervention of the Hon’ble High Court, demand draft of Rs.20 Lacs was accepted by respondents, which is still lying in no lien account and is yet to be appropriated by the respondents; that CWP No.29465/2022 was withdrawn by the applicant on 11.10.2023 with a liberty to avail the possible remedies in accordance with law; that applicant was waiting for the positive response from the respondents regarding settlement but all of sudden the applicant was shocked to get a letter dated 12.07.2024 from Tehsildar, Dhuri on the ground that the respondents intend to take physical possession of the property in question; that however, applicant immediately met the respondents and told them that where is the question of taking physical possession when settlement is going on; that on the personal visit of the petitioner, respondents assured the applicant that notice dated 12.07.2024 has been sent erroneously and they will not act upon the same and applicant was told to wait for the response of his communication dated 06.12.2023; that respondents kept their promise and nobody visited the premises on 12.07.2024 in terms of notice dated 05.07.2024; that again applicant was shocked to receive the communication dated 18.09.2024 vide which the respondents again threatened the applicant to dispossession. It was further argued that action of the respondents in trying to dispossess the applicant from the School building owned and possessed by the applicant is completely illegal and the same is liable to be set aside.

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(3) After service of notices upon respondents none has appeared and no reply was filed. Respondent were proceeded ex parte on 07.11.2024.

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(4) I have heard arguments advanced by Sh. Rakesh Gupta, Advocate and gone through the record carefully. None is present on behalf of respondents. (5) It was argued by Sh. Rakesh Gupta, Advocate that notices under Section 13(2) of the Act dated 14.06.2021 and 13(4) of the Act dated 16.12.2021 were not issued in accordance with the

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6 SA/378/2024

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M/S BLUE MOUNTAIN EDUCATION SOCIETY VS. M/S PIRAMAL CAPITAL AND HOUSING FINANCE LIMITED AND OTHERS

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provisions of the Act and the same were never served upon applicants as per Rule 8 of the Security Interest (Enforcement) Rules, 2002. It was further argued that applicant came to know about the notices under Section 13(2) & 13(4) of the Act only when applicant receive a communication from Tehsildar, Dhuri, Sangrur in which the applicant was informed that Tehsildar intends to take over the physical possession of the School building owned by the applicant presumably on the basis of some orders passed by District Magistrate, Sangrur but no copy of the order under Section 14 of the Act dated 29.06.2022 was received/served upon the applicant. (6) Perusal of record shows that there is no rebuttal on behalf of respondents to the allegations advanced by applicant. Nothing is on record to show that notices under Section 13(2) & 13(4) of the Act were served upon applicant in accordance with law. Nothing is on record to show that SARFAESI proceedings initiated by respondents were in accordance with the Act and Rules made thereunder. (7) In light of above facts and circumstances, this Tribunal has no other option to accept the contentions of applicant as true. Non receiving of demand notice is fault on the part of respondents. Accordingly, present SA is liable to be allowed.

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(8) Annexure A18 is a copy of statement of account filed by applicant itself along with the SA, which shows that total Rs.4,38,78,828.22p was outstanding on 24.01.2023 upon applicant. (9) In the Securitization Application, applicant itself stated that applicant tried for settlement with the respondents under OTS and offered Rs.02 Crores for the same. It is established law that OTS is not a birth right of any borrower. Applicant has availed a loan of Rs.3,50,57,025/- on 29.12.2017 from M/s Dewan Housing Finance Ltd., which was taken over by the present respondents. Applicant is running a School in the name of Delhi Public School. Admittedly, applicant is earning a lucrative sum from the School but it reveals from the facts of the SA that applicant does not want to repay the loan outstanding and it is interested only in the OTS. When applicant wants to settle the

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7 SA/378/2024 M/S BLUE MOUNTAIN EDUCATION SOCIETY VS. M/S PIRAMAL CAPITAL AND HOUSING FINANCE LIMITED AND OTHERS

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loan outstanding with Rs.02 Crores, this alone facts shows that applicant has sufficient amount to repayment/part repayment but he does not want to deposit the loan outstanding misusing the scheme of OTS.

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(10) In the SARFAESI Act nowhere it is provided that applicants have any right not to deposit their outstanding dues.

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(11) Since Rs.4,38,78,828.22p was outstanding upon the applicant on 24.01.2023 and applicant has never said that it has deposited even a single penny with the respondents, therefore it is directed that applicant will deposit Rs.02 Crores in its loan account with respondents within a period of one month from today.

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(12) With this condition, SA is allowed . Proceedings initiated by respondents under the Act are hereby quashed. It is made clear that respondents may initiate fresh SARFAESI proceedings under the Act in accordance with law.

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Record be consigned to record room after due compliance.

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Date: 29.07.2025

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Pronounced by me in the open Tribunal.

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(MRIDULESHKUMARSINGH) Presiding Officer, DRT-III, Chandigarh

M/S Blue Mountain Education Society v. M/S Piramal Capital and Housing Finance Limited and Others

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M/S Blue Mountain Education Society v. M/S Piramal Capital and Housing Finance Limited and Others

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