Dismissed

I Umarani v. Canfin Home Ltd.

DRT6 Feb 2025SA/388/2022

Case brief

AI extract

What is this about?

The Tribunal dismissed the Securitization Application filed by a co-borrower challenging the recovery measures taken by a housing finance company. The Tribunal held that the bank complied with statutory procedures under the SARFAESI Act, notices were duly served, and the Section 14 order by the Magistrate was valid and not subject to further interference.

What did the court decide?

Securitization Application dismissed; Section 14 order dated 12.08.2022 held valid; interim order vacated; no order as to cost.

I Umarani versus Canfin Home Ltd. — Banking and Recovery | DRT (2025)

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SA No. 388 of 2022 (C)

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06.02.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 06^th day of February, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 388 of 2022

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Mrs. I. Umarani W/o. Mr. P. Isvarane, No.79, 2^nd Main Road, Moogambigai Nagar, Puducherry 605 004 ….Applicant -Vs- The Authorized Officer, CANFIN Homes Ltd., Puducherry Branch, No.115, 1^st Floor, Vaisyal Street, Puducherry - 605 001 ….Respondent Counsels on record / appeared: Counsel for Applicant : Mr. A. Periyasamy Counsel for Respondent : M/s R. Gopinath

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ORDER ON SA No. 687/2023

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The present Securitization Application [SA] is filed on 13.09.2022 under sub section [1] of S.17 of the Securitization And Reconstruction of Financial Asset and Enforcement of Security Interest Act,2002 (for short the „Act‟) challenging the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

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The applicant has challenged S.14 Order dated 12.08.2022 in Crl. M.P No. 5949/2022 passed by the Hon‟ble CJM at Puducherry.

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SA No. 388 of 2022 (C)

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06.02.2025

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2. Pleadings of the applicant:

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2.1 The case as put forth by the applicant in the present SA is that she is co borrower who had availed loan along with her husband, Mr. Isvaran. The applicant and her husband availed a housing loan for the construction of a house at Puducherry on 30.08.2013 and subsequently availed a mortgage loan of Rs. 7 lakhs, which was repayable in 120 monthly installments of Rs.10869/- and had mortgaged the property situated at Moogambigai nagar, 2^nd main road, Ninarmandapam, Mudaliarpet Commune, Pondicherry favoring the respondent bank as collateral security towards the loans availed.

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2.2 It is contended that they were repaying the loan without any default for more than two years. However, due to the circumstances beyond their control, the loan was not repaid in time due to non payment of salary of her husband by the Puducherry Housing Board. Hence the account of the applicant was classified as NPA, way back in 2016 and the bank initiated the measures under the SARFAESI Act. The applicant and her husband managed to remit the amount with the help of the Honble Tribunal and the respondent bank dropped all the proceedings under the measure.

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2.3 It is further contended by the applicant that due to non payment of salary to her husband by the State it was difficult to make out their livelihood and run the family with grown up children. However, they‟ve repaid the loan amount and have been requesting for One Time Settlement

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SA No. 388 of 2022 (C)

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06.02.2025

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seeking for some concession in the rate of interest, waiver of penal interest from the respondent bank and the respondent bank where merciless, have not considered the OTS.

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2.4 Subsequent to the issuance of the possession notice, the respondent bank has filed application before the Ld. CJM for taking physical possession of the living house under section 14 of the Act.

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2.5 In the grounds of the SA, it is contended that the bank has initiated measures under the Act is bad in law and on the facts. The bank ought not to have initiated the measures under SARFAESI Act, when the applicant husband is not receiving the salary from the employer and the loan itself was granted on the basis of the earning capacity of the husband which is a classic case of “Forge Majeur”as State on one hand as abdicated its responsibility in not paying the salary to its employees. The payments made in the loan account has been not duly credited and the demand made is excessive.

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2.6 The action of the secured creditor in obtaining an order from the magistrate is nothing but a malafide action and opposed to principles of equity and fair play. The secured curator has approached the magistrate after a long lapse of six years from the date of issuance of the demand notice, which is barred by limitation and is non est in the eye of law

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SA No. 388 of 2022 (C)

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06.02.2025

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2.7 The Ld. Magistrate ought not to have entertained a belated and a time barred application and the same is very opposed to the scheme of thee Act. Hence, the order passed by the magistrate suffers from non-application of mind which is unenforceable, unenforceable in the eye of law. On these grounds, the applicant sought to declare that the measure taken by the respondent bank in proceeded to take possession be stayed.

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3. Objections of the respondent bank.

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3.1 Per contra, the respondent bank has denied and countered all the contentions of the applicant in the SA. It is specifically stated that the applicant is not entitled to rewrite the loan agreement and the averments in SA are false, frivolous and in violation ot the agreed terms of the loan agreement.

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3.2 The case of the respondent bank is that the applicant had vailed loan of Rs.5,000/vide loan account No.109201003014; another loan of Rs.7,00000/- vide sanction letter dated 31/8/2013. In acceptance of the terms and conditions of sanction, the applicant has executed loan agreements, executed registered memorandum of deposit of title deeds dated 25/09/2013 registered as Doc. No.5077/2013 in the Office of the District Registrar, Puducherry and the applicant had deposited original title Sale deeds dated 14.11. 2022 which is registered as document number 4415/2002 and the original sale Deed dated 15/5/1987 document number 1109/1987 in the Sub Registrar Office, Poducherry.

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SA No. 388 of 2022 (C)

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06.02.2025

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3.3 The applicant started to pay the EMI from month to month on October 2013 and the EMI for the month of January, 2014 was defaulted. The applicant‟s repayment of EMI was interrupted and there was no continuous repayment of the EMI on a monthly basis. Hence the bank has initiated the SARFAESI after the month of April 2007. However based on humanitarian grounds, the applicant was given sufficient time to repay..

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3.4 Though the applicant was given sufficient time before initiating the SARFAESI measure, the applicant quoted personal reasons for nonrepayment and failed to repay, which is not admissible,

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3.5 The respondent is a housing finance company, incorporated under the Company‟s act 1956 sponsored by Canara Bank, which is regulated by the directives of the National Housing Board. As a responsible corporate body, the bank has followed all the procedures as enumerated under the SARFAESI act. Even after giving innumerable chances for repayment and also sufficient opportunity for negotiated settlement the applicant did not come forward, hence the bank has issued the possession notice dated 07/01/2022 which is published on 12/01/2022 and applicant has not come forward to make the payment.

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3.6 The respondent has followed all the measures under the Act and the present SA is only to be dismissed and the order of the CM would not call for any interference in the matter.

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SA No. 388 of 2022 (C)

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06.02.2025

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Heard the submission of both the councils and Perused the records of the case.

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4 It is manifest from the records that the applicant is a co borrower who had availed the loan along with our husband, Mr. Isvarane P who is an employee of the Puducherry Housing Board. It‟s an admitted fact that the applicant had availed the loan of Rs. 7,00,000 which was to be repaid in 120 installments of Rs. 10869 and the property bearing - Moogambigai nagar, 2^nd main road, Ninarmandapam, Mudaliarpet Commune, Pondicherry was mortgaged to the respondent bank as security towards the loan availed.

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4.1 It is also an admitted fact that the applicant has defaulted in the repayment, and the account was classified as non-performing asset, as per the RBI guidelines in 2016.

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4.2 The contention of the applicant that they made every effort to regularize the account is not supported by any document. As the applicant did not repay the loan as per the terms of the sanction, the bank has initiated the measures under SARFAESI Act after classifying the account as NPA as per RBI guidelines.

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4.3 The respondent bank has issued section 13[2] to demand notice dated19/04/2017 which is produced by the Respondent Bank along with the acknowledgement card evidencing the service of S.13[2] demand notice. As the applicant did not liquidate the outstanding amount within 60 days, the

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SA No. 388 of 2022 (C)

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06.02.2025

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bank has proceeded further in issuing the possession notice u/s.13[4] on 07.01.2022. The possession notice is also received by the applicant as per the acknowledgement card. The possession notice is also affixed on the secured asset and the photographs evidencing the same is produced at page 60 of the counter. The records of the bank clearly establish the due compliance of the demand and possession notice to the applicant.

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4.4 The applicant at page six of the SA has produced the possession notice, wherein it is seen that the account was classified as NPA after the classification of the account as NPA, the bank has issued S.13[2] demand notice dated 19/04/2017 calling upon the borrowers. Mrs Ivarani and Umar Rani to repay the amount as mentioned in the S.13 [2] notice within a period of 60 days. On failure to make the payment within a period of 60 days and as there was no objections to the demand made ,the bank has proceeded further and issued S.13[4] notice.

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4.5 The contention of the applicant that the demand notice and the possession notice is not served on the applicant is countered by the respondent bank by producing the copy of the demand along with the acknowledgement cards at page 53 of the objections and the demand notice is served easy demanding the applicant to clear the outstanding amount due within the period of 60 days. The acknowledgement card at page 59 establishes that the demand notice is received by the applicant. Hence the contention of the applicant that no S.13[2] was served would not stand.

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SA No. 388 of 2022 (C)

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06.02.2025

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4.6 The further contention that S.13[4] notice stated 07/01/2022 was not served is also countered by the respondent bank by producing the postal acknowledgement card at page 52 and the photograph of a fixture of the possession notice at page 60 clearly reflects that the possession notice is served on the applicant and is also affixed on the secured assess as required under the surface act.

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4.7 Yet another contention of the applicant that the salary of her husband was not issued by the Puducherry Housing Board, which is a force major, is a misconception of facts and the law as it is not an act of God. On the other hand, it is evident from the pleadings of the SA that the applicant admits the availing of the credit facility along with the husband and the mortgage the property as collateral security towards the credit facilities available.

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4.8 In fact, the default in the repayment is also admitted by the applicant in the SA pleadings and a mere mention that the notices were not served is also counted by the respondent bank by producing the document supporting the issuance of the S.13[2] demand notice and the S.13[4] possession notice, which is also affixed on the property as required under the acts and the rules made there under.

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4.9 On the other hand, the applicant has failed to establish any violation or infirmities in the procedures initiated by the respondent bank and has failed to substantiate their averments in preferring this application challenging the section 14 order.

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SA No. 388 of 2022 (C)

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06.02.2025

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4.10. Even otherwise, the act of the Magistrate is only executive in nature who would consider whether the measures taken by the secured creditor are in accordance with Act based on the documents produced and after due compliance of S.14 (i) to (ix). Accordingly, the Hon‟ble CJM at Puducherry Order has passed the Order dated 12.08.2022 in Crl. M.P No. 5949/2022 which does not require any interference of this Tribunal.

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4.11 In fact , the applicant has failed to point out any illegality in the S.14 application or in the affidavit filed; on the contrary have raised the contention in respect of the issuance S.13(2) demand notice dated 19.04.2017 and S.13(4) possession notice dated 07.01.2022 which is not within the prescribed period of 45 days under S.17[1] of the Act to challenge the measures initiated by the respondent bank.

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4.12. On careful examination of the pleadings and the documents produced by both the parties, it is evident that the respondent bank as secured creditor has enforced the security available to them under the Act as prescribed. The applicant has failed to make out a case of interference of this Tribunal in the S.14 order

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4.13. Even otherwise as per S.14(3) - No act of the Chief Metropolitan Magistrate or the District Magistrate done in pursuance of this section shall be called in question in any court or before any authority.

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SA No. 388 of 2022 (C)

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06.02.2025

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For the forgoing reasons, the present SA No. 388/2022 is only to be dismissed.

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Accordingly, S.A No.388/2022 stands dismissed. The S.14 Order dated 12.08.2022 passed by the Hon‟ble Chief Judicial Magistrate, Puducherry doesn‟t require any interference from this Tribunal and hence the same is held as valid. Interim Order granted if any stands vacated. Pending IA/s if any are disposed of in terms of this Order. No order as to cost.

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(Dictated to stenographer, transcribed by her, corrected, signed and pronounced by me on this the 06^th day of February, 2025)

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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SA No. 388 of 2022 (C)

06.02.2025

APPENDIX

LIST OF DOCUMENTS PRODUCED BY THE APPELLANT

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SI.No	Date	Particulars	Annexure
1.	07.01.2022	Possession Notice	A1
2.	12.08.2022	Order passed by Ld. CJM in Crl.MP No.5959/2022	A2

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LIST OF DOCUMENTS PRODUCED BY THE APPELLANT

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Sl. No.	Description of Documents	Page No.
1.	MortgageLoan Applicationdt.22.08.2013	R1
2.	Loan Agreement dt.06.09.2013	R2
3.	Affidavit of Isvarane & Umaranidt.06.09.2013	R3
4.	LetterofGuarantee– Pajanevelou dt.06.09.2013	R4
5.	LetterofGuarantee–Chandirasekardt.06.09.2013	R5
6.	Letter of Evidencing Deposit of Title Deeds dt.24.09.2013	R6
7.	Memorandumof Deposit of TitleDeeds dt.25.09.2013	R7
8.	DemandNoticewith Acknowledgment dt.19.04.2017	R8
9.	Possession Notice with acknowledgment photograph of symbolic possession dt.07.01.2022	R9
10.	Photograph of symbolic possession	R10
11.	Statement of Account dt.25.10.2022	R11

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

I Umarani v. Canfin Home Ltd.

Case brief

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I Umarani v. Canfin Home Ltd.

Case brief

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