Disposed

Femina Arul v. Hdfc Bank

DRT15 Apr 2025SA/437/2023

Case brief

AI extract

What is this about?

In this Securitization Application, applicants challenged a Section 13(4) Possession Notice issued by HDFC Bank for recovery of a housing loan. The bank filed a memo withdrawing the notice after the Insurance sub-respondent settled claims under a consumer forum order, nullifying the basis for possession.

What did the court decide?

The Securitization Application was disposed of; the Possession Notice was withdrawn by the bank, and liberty was granted to initiate fresh proceedings if the Insurance claim was not settled.

Femina Arul versus Hdfc Bank — Consumer Protection | DRT (2025)

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SA No. 437 of 2023

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15.04.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 15^th day of April 2025

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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SARFAESI APPLICATION No.437 of 2023

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Mrs. Femina Arul W/o. P.J. Arul John

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Mr. A. Jayan Anderson, S/o. P.J. Arul John

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All residing at 12, Aprameyaa, 2^nd Floor, 1^st Street, Anna Road, Babu Nagar, Pattabiram, Chennai – 600 072. ….Applicants -Vs-

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The Authorised Officer, HDFC Bank Ltd, Second Floor, ITC Centre, 760 Anna Salai, Chennai – 600 002.

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HDFC ERGO General Insurance Company Ltd, Second Floor, ITC Centre, 760 Anna Salai, Chennai – 600 002. ….Respondents

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Counsels on record / appeared:

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Counsel for Applicant : M/s V. Anil Kumar Counsel for Respondent : M/s K. J. Parthasarathy

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ORDER ON S.A

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The present Securitization Application [SA] is filed on 05.10.2023 under sub section [1] of S.17 of the Securitization And Reconstruction of

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SA No. 437 of 2023

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15.04.2025

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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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Applicant is the borrower, who has filed the present SA, challenging the Possession Notice dated 22.06.2023 issued by respondent bank, for recovery of a sum of Rs.47,01,466/- and the prayer as sought for in the SA is to set aside the Possession notice.

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The applicant is wife of Dr. P. J. Arul John and the second applicant is the son of Dr. P. J. Arul John. The present S.A if filed challenging the Possession Notice dated 22.06.2023 and the outstanding amount due as per the Section 13(4) Possession notice is Rs.47,01,466/-. The applicants are the legal heirs of Dr. P.J. Arul John who is dentist by profession and proprietor of Jeba Dental Clinic. He had availed certain financial assistance in the year 2017 from the HDFC bank, for sum of Rs.26,00,000/- vide loan account No.626801176 on 19.09.2017

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Against the property situated at Plot 12, S.No.379/4b2pt, Babu nagar, Thandurai Village, Poonamalle Taluk, Chennai – 600 054 admeasuring 1150 sq.ft., together with 629 sq.ft., of undivided share of land, was offered as collateral security towards the credit facilities.

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The credit facility was to be repaid in 250 Equated Monthly Installments of Rs.22,729/- from 01.10.2017 and the instalments were

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SA No. 437 of 2023

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15.04.2025

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paid regularly. Further a top up loan of Rs.4,00,000/- was availed in respect of existing Housing Loan and the mortgage was extended to this facility.

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Dr. P. J. Arul John had also subscribed to insurance cover under policy No.2918201940940700 provided by the HDFC ERGO General Insurance Company Ltd, against the Housing loan availed from HDFC bank. The policy covered many contingencies, including “Major Medical Illness” amongst the other coverages mentioned under section 3 of the said policy. The 2^nd respondent being a General Insurance Company with 74% held by the 1^st respondent herein and 26% held by insurance entity of Unique Re-Group.

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Suddenly Dr. P. J. Arul John suffered cardiac arrest on 11.12.2018 and died at around 07:30 AM intestate leaving behind the applicants and D. Elizabeth as his legal heirs. After the demise of Dr. P. J. Arul John, their life was upside down due to the sudden loss of their sole bread winner. In December 2021 applicants were collating documents relating to home loan and the connected insurance policy, on 08.12.2021 under „Major Medical Illness‟ with all relevant documents and claim made by respondent bank.

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The second respondent requested certain documents and the same were sent on 23.12.2021. Further the 2^nd respondent has repudiated the claim contending that the cause of death of Dr. P. J. Arul John was a cardiac arrest due to „Myocardial Infraction‟ which according to them was not covered under „Major Medical Illness‟. The cause of the death was covered

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SA No. 437 of 2023

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15.04.2025

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by the policy and the bank had claim of Rs.36,72,727/- due as onn 31.07.2020 along with the charges. So, after the death of the Dr. P. J. Arul John who is the bread winner of the family, and applicants had no other source of income.

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In fact if the 2^nd respondent had honoured the cover under the insurance policy, thus the account would not have slipped into NPA and thus classification of account as NPA by the 1^st respondent is farce and misleading. Further the respondent didn‟t informed the classification of account as NPA and has not followed the Reserve Bank of India‟s guidelines. The applicant filed a complaint before the District Consumer Redressal Forum in C.C. No.171 of 2022 seeking appropriate remedy against their claim which is pending.

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As the bank issued Possession Notice dated 01.03.2022, the applicants have filed S.A. No.223 of 2022 and during the hearing, respondent bank submits to recall / withdraw the possession notice dated 22.06.2023 on behalf of the applicant recording the same on S.A. No.223 of 2022 was disposed on 07.06.2022.

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The first respondent has proceeded and issued Section 13(4) Possession Notice dated 22.06.2023when the case was pending before the Consumer Forum and have affixed the Possession notice dated 22.06.2023 claiming a sum of Rs.47,01,466/-. Hence the applicant has filed the present S.A challenging the Possession Notice dated 22.06.2023

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SA No. 437 of 2023

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15.04.2025

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The respondent bank has come on record and has filed a memo contending that the Consumer complaint filed by the applicant in C.C. No.171 of 2022 is disposed of vide order dated 18.08.2023 by the District Forum Chennai directing the HDFC bank to settle the claim amount of the applicant under the Home Suraksha Plus Policy of the Borrower by the first respondent.

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Hence the first respondent is recalling or withdrawing the possession notice dated 22.06.2023 issued under the SARFAESI Act with liberty to initiate proceedings afresh if the 2^nd respondent failed to settled the claim. Hence the Respondent bank came on record along with a memo, the bank has also filed the order dated 18.08.2023 passed in C.C. No.171 of 2022, the order filed by the respondent is taken on record.

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Heard the Learned Counsels appearing for the respective parties and perused the records of the case.

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On perusal of the present S.A. case papers it is seen that the applicant Dr. P. J. Arul John is the borrower who had availed credit facilities from the first respondent along with the insurance of HDFC where in the Housing Loan is secured by the insurance policy.

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The applicants being the legal heirs has also filed C.C. No.171 of 2022 before the District Consumer Redressal Forum to appropriate the insurance claim under the policy. The death certificate of Dr. P. J. Arul John is produced by the applicant at page No.63 of their S.A, as per the death

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SA No. 437 of 2023

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15.04.2025

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certificate of issued by the Municipal Administration it is seen that the death of Dr. P. J. Arul John is on 11.12.2018

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As the loan was not regularly repaid as per the terms of the sanction resulted in classification of the account as NPA. The respondent bank have initiated measures under the SARFAESI Act, and have issued the Section 13(2) Demand notice dated 17.01.2023. As per the Section 13(2) demand notice issued by the bank which is produced at page No. 78 to 81, it is evident that the legal heirs Mrs. Femina Arul, Mr. Jayan Anderson, Mrs. Elizabeth are the legal heirs of the deceased Dr. P. J. Arul John, as per the records notices have sent to legal heirs as the applicants didn‟t clear the liabilities, the bank has issued the Possession Notice dated 22.06.2023 which is challenged in the present S.A.

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It is also manifest from the records that insurance cover was rejected by the 2^nd respondent, hence the applicant has filed Consumer Complaint in C.C. No.171 of 2022 before the District Forum Chennai South, and the respondent bank has produced a copy of this order dated 18.08.2023, where in the Hon‟ble Consumer Forum has directed the 2^nd respondent to settle the claim of the applicant of the deceased borrower under Home Suraksha Plus Policy availed from the respondent bank.

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Memo filed by the bank is taken on record and the respondent bank intends to withdraw the possession notice dated 22.06.2023, as the

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SA No. 437 of 2023

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15.04.2025

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Possession notice is being withdrawn nothing survives for adjudication in the present S.A. Further memo filed by the 1^st respondent along with order copy of the Consumer Forum is taken on record. Accordingly S.A. stands disposed as measures withdrawn from the respondent bank in terms of the memo filed.

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It if further clarified that in case 2^nd respondent failed to comply the order passed by the Consumer Forum of Chennai south in C.C. No.171 of 2022, applicant as well as Respondent bank are at liberty to initiate legal measures / measures under the Act in accordance with the law.

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Accordingly S.A. stands disposed off

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Interim order granted if any, stands vacated. Pending IAs if any, are disposed of in terms of this order. No order as to costs.

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

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(Dictated to Mogesh, transcribed by him, corrected, signed and pronounced by me in Open Court, on this the 15^th day of April, 2025)

Femina Arul v. Hdfc Bank

Case brief

What is this about?

What did the court decide?

Femina Arul v. Hdfc Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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