Dismissed

Devender Singh Sapra v. Decent Securities Pvt. Ltd.

DRT9 Jun 2025SA/468/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal examined an application challenging recovery notices issued by a Financial Institution under the SARFAESI Act. The Tribunal found that notices under Sections 13(2) and 13(4) were duly issued and served via post, affixation, and newspaper publication. Finding no illegality in the enforcement actions, the application was dismissed allowing recovery to proceed.

What did the court decide?

Application dismissed; respondent permitted to proceed with recovery measures under the SARFAESI Act.

Devender Singh Sapra versus Decent Securities Pvt. Ltd. — Banking and Recovery | DRT (2025)

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SA 468 of 2024

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Debts Recovery Tribunal-I, Delhi 4th floor, Jeevan Tara Building, Parliament Street, New Delhi

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Presiding Officer: Shri Govind Ballabh Sharma

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S.A. No.468/2024

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Devender Singh Sapra
D-11/17, Model Town-II Delhi-110009 Applicant
Versus
Decent Securities Pvt.Ltd. Through its Authorized Officer KD-195, Pitampura
Delhi-110088 Respondent
Present:
For the Applicant For the Respondent FI : Mr. V.P.S.Ahluwalia, Advocate : Mr. Amit Dhall, Advocate
Date of Pronouncement: 09.06.2025.

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FINAL ORDER

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The present securitization application has been filed by Shri Joginder Singh, duly authorized vide authority letter dated 15.092024 on behalf of Shri Devender Singh Sapra on 17.12.2024 praying for quashing set aside impugned Court Receiver's possession notice dated 04.12.2024 and Ld. CMM order dated 13.11.2024 in respect of property being Southern Side Half Portion of Shop at GF adjacent to staircase upto ceiling label without its roof and upper floor right area 511-

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SA 468 of 2024

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measuring 28.23 sq.meters, part portion of Property No.XIV/387-388, Gali Old Post Office Wali, Sadar Bazar, Delhi110006 (hereinafter referred as property in question) and demand notice dated 04.04.2024 and possession notice dated 06.07.2024 as illegal and void under the provision of Securitisation Act and upgrade the account from NPA to Standard as per guidelines issued by RBI.

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It has been submitted on behalf of the applicant that possession notice dated 06.07.2024 issued by respondent FI never been served upon the applicant by any of the modes under SARFAESI act or Rules. It has further been submitted that applicant allegedly availed credit facilities by Respondent FI and Smt.Satnam Kaur, alleged mortgagor for credit facilities expired on 20.05.2022 and applicant being legal heir filed this application. It has further been submitted that as per Ministry of Finance Notification dated 05.08.2016, respondent FI claiming to be NBFC is not covered under RBI and having asset of Five hundred crore rupees now reduced to Rs.100 crore as per Gazette Notification dated 24.02.2020, thus is not authorized or empowered to initiated SARFAESI action as per Balance Sheet as on 31.12.2021 of respondent FI. It has further been submitted that officials of respondent Fi showing malafide and bad conduct of obscuring relevant materials

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SA 468 of 2024

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information and making false statement by producing fabricated documents before this Tribunal and committed offences punishable under various sections. It has further been submitted that Respondent FI issued various sanction letters from time to time considering the growth and satisfactory performance of the applicant which has been regularly maintained by the applicant strictly in terms and conditions of sanction of credit facilities and served consistently since inception. It has further been submitted that applicant requested to take sympathetic view of situation and allow operations in the account despite availability of sanctioned credit facilities and not to levy penal interest/charges. It has further been submitted that due to unprofessional and negligent attitude of officers of Respondent FI, the applicant suffered heavy losses and after onset of Covid 19 pandemic, requested vide email dated 13.05.2020 requested to avail the benefit of moratorium as per RBI guidelines. It has further been submitted that Respondent discriminated the applicant and declined the moratorium request in violation of RBI guidelines and principles of natural justice which was extended by all other Banks/NBFCs to their customer, proved fatal for sustainability efforts of the applicant. It has further been submitted that RBI vide their circular dated 17.04.2020 to grant

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moratorium of three months on payment of term loan

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SA 468 of 2024

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instalments falling due between 01.03.2020 and 31.05.2020 classified as Standard as on 29.02.2020, even if overdue, shall be excluded by the lending institutions from number of days past due for Asset Classification under IRAC norms and similarly in CC / overdraft account. It has further been submitted that instead of providing help, the respondent FI classified the account as NPA on 31.03.2021 which is itself disputed being wrongly declared without there being 3 consecutive defaults. It has further been submitted that Respondent FI issued demand notice dated 17.01.2022 without informing the account as NPA being illegal and void ab-initio as without proper classification and never served upon applicant till date. It has further been submitted that Respondent FI obtained order from Ld. CMM dated 28.05.2022 for physical possession of property through Court Receiver who issued notice dated 01.06.2022 to take possession on 18.06.2022. It has further been submitted that applicant filed SA no.243/2022 which renumbered as TSA 546/2022 on 13.06.2022 and the Tribunal order dated 18.06.2022 directed the respondent FI and Ld. Receiver not to take any action / possession qua the property in question. It has further been submitted that respondent FI filed IA No.823/2024 stating that they have withdrawn SARFAESI measures against property in question and matter was posted to 23.04.2025 by the Tribunal. It has

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SA 468 of 2024

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further been submitted that applicant has filed its reply on 28.11.2024 to the IA no.823/2024 in TSA no.546/2022 which is pending for adjudication. It has further been submitted that respondent FI against filed fresh application u/s 14 of SARFAESI Act and vide order dated 13.11.2024 by Ld. CMM, Tis Hazari Court, the Court Receiver issued notice dated 04.12.2024 for taking physical possession of property on 23.12.2024 liable for Contempt of Court as order dated 18.06.2022 is still in operation as it has neither been challenged nor has been vacated by any High Court/Forum. It has further been submitted that Possession notice is in contravention of judgement dated 11.12.2018 passed by Hon'ble High Court of Allahabad in Writ C No.38578 of 2018 titled "Kukum Tentiwal V. State of UP & Ors. which held that "Section 14 on bare perusal does not provide for any opportunity of hearing. However, it is also clear that the order passed under Section 14 is a coercive measure for taking possession and thus the officer is bound to observe the principles of natural justice while passing the order under Section 14 of SARFAESI Act." It has further been submitted that respondent FI in application u/s 14 filed before Ld.CMM annexed copy of 2nd Demand Notice dated 04.04.2024 issued u/s 13 (2) and copy of 2nd Possession Notice dated 06.07.2024 which were never served upon applicant till date. It has further been submitted that officers of respondent

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SA 468 of 2024

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FI conducted malafidely and are liable for coercive action under Section 29 of the Act. It has further been submitted that respondent FI has not followed the guidelines as per Master Circular of RBI dated 02.07.2007 on "Prudential Norms on Income Recognition, Asset Classification and Provisioning" and Circular dated 10.02.2003 on "Upgradation of loan accounts classified as Non-Performing Assets", the account could not be even classified as NPA. It has further been submitted that on perusal of statement of accounts, there is no consecutive default for three months as per RBI guidelines which rendered

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alleged classification of account as NPA as applicant has already returned huge amount of alleged loan to the respondent FI. It has further been submitted that alleged demand notice u/s 13 (2) is not tenable as account being declared NPA due to negligence and unprofessionalism of applicant and not given the details of amount due as required under Section 13(3) of the Act which is mandatory. It has further been submitted that respondent FI has placed Speed Post Receipts along with tracking report which are forged and manipulated. It has further been submitted that respondent FI not taken recourse u/s 13 (4) by not affixing and publishing any notice therefore cannot be sustained. It has further been submitted that respondent has not credited the amount deposited from time to time after alleged date of NPA and even

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SA 468 of 2024

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interest charged in the account, penal interest and other charges etc. are exorbitant contrary to RBI guidelines and every debit entry is being disputed being erroneous, false and concocted. It has further been submitted that applicant shall suffer irreparable loss and injury in case the properties are sealed and sold. Accordingly, it has been prayed for allowing the present securitization application.

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On the other hand, Ld. Counsel for the respondent FI has vehemently opposed the submission of Ld. Counsel for the applicant and submitted that applicant is badly time barred filed beyond statutory 45 day limitation period prescribed under Section 17 (1) of SARFAESI Act from the date of initiation of notice u/s 13(4) dated 23.03.2022 which was duly served through post, affixation and publication in newspapers on 23.03.2022, whereas SA has been filed on 10.06.2022. It has further been submitted that SA is not filed by applicant but by Sh. Joginder Singh without valid power of attorney and not the authorized Power of Attorney Holder in accordance with law to sign and verify. It has further been submitted that respondent is duly registered NBFC eligible to initiate action as per Finance Ministry Notification. It has further been submitted that applicant admittedly made admission of availing loan facility from respondent by creating mortgage of property in question

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SA 468 of 2024

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created by his mother Smt. Satnam Kaur by depositing original title documents with the respondent FI, defaulted in repayment and requesting respondent to regularise his account consequent failure to do so. It has further been submitted that as such essential parameters and requirements of Section 58 (f) of Transfer of Property Act relating to creation of equitable mortgage of property stood duly and valid complied with and respondent FI has every right to enforce its security interests over the mortgaged property. It has further been submitted that applicant had availed credit facility of Rs.1.00 crore which was sanctioned on 11.04.2019 and executed loan agreement dated 10.04.2019. It has further been submitted that the loan was repayable in 48 EMI with interest @12% and penal rate of interest @3% per month in case of default. It has further been submitted that the loan facility was secured by equitable mortgage of property in question belonging to Smt. Satnam Kaur by depositing original title deed and assured to maintain strict financial discipline and timely repayment of EMIs. It has further been submitted that in case of default in repayment, respondent FI shall have right to proceed further to enforce security interest over the mortgaged property. It has further been submitted that account of applicant remained irregular due to non-repayment of EMIs amounting to Rs.3,08,500/- qua three consecutive defaults of EMIs and assuming relaxation of

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SA 468 of 2024

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EMI till August 2020 even then payment made after September 2020 were irregular and hence EMIs adjusted from SeptemberOctober-November and applicant failed to regularise EMI regularly despite repeated reminders and visits. It has further been submitted that the applicant vide E-mail dated 13.05.2020 requested for moratorium and respondent vide Email dated 16.5.2020 and 09.07.2020 requested for completion of necessary formalities but applicant wilfully failed to respond. It has further been submitted that the respondent FI extended all help and assistance in terms of RBI during Covid period but applicant failed to fulfil necessary formalities to avail the moratorium benefit and account also remained irregular. It has further been submitted that the applicant defaulted in repayment of instalments from December 2020 to March 2021 and respondent had no option but declared NPA on 31.03.2021. It has further been submitted that respondent issued letter dated 14.06.2021 and also issued notice u/s 13 (2) on 17.01.2022. It has further been submitted that defendant FI issued notice u/s 13 (4) on 23.03.2022 published in two newspapers as well as affixation on the mortgaged property. It has further been submitted that respondent moved application under Section 14 and Court Receiver issued possession notice on 01.06.2022 for taking physical possession of property on 18.06.2022 and in view of the above, the

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SA 468 of 2024

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applicant filed present SA on 10.06.2022 and also filed C.M. (M) No.601/2022 before Hon'ble High Court of Delhi which was dismissed as withdrawn vide order dated 20.06.2022. It has further been submitted that fresh notice dated 04.04.2024 was issued under Rules 8 (6) and 9 (1) and duly published in two newspapers. It has further been submitted that notice u/s 13(4) read with Rule 8 (1) dated 06.07.2024 sent thru Speed Post to both the addresses and submitted photograph affixed on the property and duly published in newspaper complied Rule 8 (2) of SIER 2002. It has further been submitted that mandatory notice under rule 8(6) to both the addresses thru Speed Post and courier but both received back and published in newspaper on 09.11.2024 under rule 9 (1) of the Act dated 04.11.2024. It has further been submitted that the applicant did not communicate the death of co-borrower contrary to law and applicant in knowledge of the proceeding even before fresh proceedings in TSA 546/2022 and this issue has been deal in recent judgement passed by Punjab and Haryana Court. It has further been submitted that respondent followed RBI guidelines and taken all measures while declaring the account as NPA. It has further been submitted that interest rates and penal charges were charges as per sanctioned agreement and RBI policy. Further, measure under section 13(4) were taken

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after due compliance with legal procedures under SARFAESI

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SA 468 of 2024

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and SIER rules. Accordingly, it has been prayed for dismissal of the present securitization applicant.

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The applicant filed Rejoinder to Respondent FI and denied the objections of respondent FL It has further been submitted that applicant approached this Tribunal as per remedies availed under law and appropriate relief on account of unlawful and illegal actions of respondent FI. It has further been submitted that applicant issued fresh power of attorney in favour of Sh. Joginder Singh after considering objection of respondent FI. It has further been submitted that notice u/s 13 (2) issued to a dead person namely Smt. Satnam Kaur who expired on 20.05.2022 i.e. much before date of alleged notice and notice from Court Receiver not received by applicant but by his tenant and publication in newspaper are not in vide publication thus not aware of the alleged notice. It has further been submitted that respondent FI not taken any step to trace the legal heirs of deceased borrower/mortgagor and documents were blank during execution after sanction of loan of Rs.1.00 crore and not filled in the present of applicant and late Smt. Satnam Kaur. It has further been submitted that applicant suffered financial constraints during Covid 19 and faced financial constraints but was making payment of loan without any default not given any relief by the respondent FI.

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SA 468 of 2024

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It has further been submitted that respondent has declared the account as NPA without adhering RBI guidelines as per statement of account showing payments made in December 2020 and March 2021. Accordingly, it is prayed to allow this securitisation application and set aside impugned possession notice dated 04.12.2024 and demand notice dated 04.04.2024 and direction to Respondent FI to upgrade the account of applicant from NPA to Standard as per RBI guidelines.

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5. The respondent filed one application being I.A No.1892/2022 on 13.06.2022 u/s 340 Cr.P.C. for committed

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perjury and criminal contempt of Court in collusion with others and submitted that vide order dated 18.06.2022, interim stay

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was granted directed Court Receiver to defer taking over

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possession of secured assets till next date of hearing. It has further been submitted that in order to defeat legitimate rights

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and interest over secured asset, the respondent availed services of Detective Agency who reported that Sh.Devender

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Singh Sapra is in Canada for the past more than six months and this application was filed on 13.06.2022. It has further been submitted that purported signature of applicant on verification page no.59 and support affidavit on Vakalatnama and Paper Book are forged and fabricated. It has further been

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submitted that alleged attestation of signatures of Deponent

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SA 468 of 2024

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by the Oath Commissioner Ms. Guddi Dimri on 10.06.2022 and

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Identification of Signatures of the Deponent by Sh.P Bali is also not valid and is illegal since Sh.Devender Singh Sapra was not in Delhi on 10.06.2022. It has further been submitted that SA has been filed by forging signatures of applicant and alleged attestation of Affidavit and his identification is also false, illegal and unlawful and requires an inquiry. It has further been submitted that respondent filed IA u/s 17(7) read with Section 19(25) of RDB 1993 with Rule 18 in TSA No.546/2022 submitted that the respondent FI has decided to withdraw entire enforcement measures u/s 13 (2) and 13 (4) of the Act and with liberty to take appropriate recourse available under law for recovery of Rs.1,97,56,666/- upto 19.01.2024 with interest @12% and also to invoke legal recourse. Hence, there is no infirmity in the SARFAESI action of Respondent FI and prayed for dismissal of Securitisation application on these grounds with costs.

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Heard the rival contentions of both the parties and perused the records thoroughly.

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In the present matter, admittedly the borrower has availed the loan facilities from respondent FI in the year 2019 against the mortgage of the property in question. Apparently,

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there is default on the part of the borrower/

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SA 468 of 2024

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mortgagor/guarantor in paying the dues of the respondent FI and till date the borrower/mortgagor/guarantor have not paid the dues of the respondent FL It has been argued on behalf of the applicants that the respondent FI has not followed the mandatory provisions while initiating the measures/actions under the SARFAESI Act, 2002 and the Security Interest (Enforcement) Rules, 2002 and the entire actions of the respondent FI qua the property in question is bad in law. However, on behalf of the respondent FL it has been argued that the respondent FI has initiated the measures / actions under the SARFAESI Act, 2002 as per law and the demand notice dated 04.04.2024 under Section 13 (2) of the SARFAESI Act, and symbolic possession notice dated 06.07.2024 under

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Section 13 (4) of the SARFAESI Act and sale notice dated 21.10.2024 have been served upon the borrower/ mortgagor/guarantor as per Security Interest (Enforcement), Rules, 2002. On perusal of the records, it appears that the respondent FI had issued fresh demand notice dated 04.04.2024 under Section 13 (2) of the SARFAESI Act and the same was served upon the borrower/guarantor/mortgagor through post as well as through publication in two newspapers (Hindi and English version) on 20.04.2024, but despite proper service the borrower/guarantor/mortgagor have failed to give their objection/reply under section 13 (3) of the SARFAESI Act,

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SA 468 of 2024

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Further, the respondent FI has issued the symbolic possession notice dated 06.07.2024 under Section 13 (4) of the SARFAESI Act and the same was served upon borrower/ guarantor/mortgagor through all modes including by post, affixation and publication in two newspapers (Hindi and English version) on 16.07.2024. Further, the respondent FI has given sale notice dated 02.08.2024 under Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002 and the same was served upon all the borrower/guarantor/mortgagor and thereafter the respondent FI has issued sale notice dated 21.10.2024 vide which auction was fixed for 22.11.2024 and the said sale notice was duly served upon the borrower/guarantor/mortgagor as per the proof of service available on record.

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Apparently, the aforesaid demand notice dated 04.04.2024 under Section 13 (2) of the SARFAESI Act, and symbolic possession notice dated 06.07.2024 under Section 13 (4) of the SARFAESI Act and sale notice dated 21.10.2024 have been served upon the borrower/mortgagor/guarantor as per Security Interest (Enforcement), Rules, 2002 were duly served upon the borrower/guarantor/mortgagor and thus, this Tribunal is of the view that there was no illegality or irregularity on the part of the respondent FI in taking measures under the SARFAESI Act, 2002. However, the securitization applicant has raised the objection that the respondent FI has issued the

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SA 468 of 2024

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notice to a dead person, but it is a matter of fact that Mr. Devender Singh Sapra (applicant herein) is the son of late Smt. Satnam Kaur and he is also the guarantor and being legal heir of late Smt. Satnam Kaur he was having the knowledge of the proceeding of the respondent FI initiated under SARFAESI Act, 2002, that too, when the applicant has filed earlier securitization application but despite this fact these borrower have failed to pay the dues of the respondent FI. Even otherwise, the applicant has failed to file any documentary evidence to show that he has informed the respondent FI by sending the death certificate about the death of late Smt. Satnam Kaur. Further, the applicant has raised the objection that during the Covid-19 period the respondent FI has failed to provide the moratorium as per the guidelines of RBI. However, as per the version of the respondent FI, the respondent FI (vide emails dated 16.05.2020 and 09.072020) requested the applicant to complete some necessary formalities for granting moratorium, but the applicant has failed to do so and thus it cannot be said that the respondent FI has not provided the moratorium to the applicant.

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That the demand notices under Section 13 (2) and 13 (4) of SARFAESI Act have been duly issued and served upon the borrower/mortgagor/guarantor and the borrower has not cleared the dues of the respondent FI till date. That the

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SA 468 of 2024

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respondent FI has issued the demand notice dated 04.04.2024 under Section 13 (2) of the SARFAESI Act thereby calling upon the borrower/mortgagor/guarantor to pay the dues of the respondent FI within 60 days, but despite receiving the said demand notice the borrower/mortgagor/ guarantor has failed to pay the dues of the respondent FI within 60 days therefore, the respondent FI has proceeded further under the SARFAESI Act, 2002 and the Security Interest (Enforcement) Rules, 2002 to recover its dues. Admittedly, the borrower/mortgagor/ guarantor has not denied about the availment of the loan facilities from the respondent FI against the mortgage of the property in question. Further, the borrower/ guarantor/ mortgagor have not come forward to pay the dues of the respondent FI and even they have not shown any bonafide to pay the dues of the respondent FI and these borrowers/ mortgagors/guarantors cannot run away by raising such frivolous objections.

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In view of the above facts and circumstances and SARFAESI Act and Rules, this Tribunal is of the affirmed view that the respondent FI has followed the mandatory procedures as laid down under the SARFAESI Act and Rules, while initiating measures for recovery of its dues including auctioning the property in question, therefore, the SARFAESI Application is liable to be dismissed.

(ORDER)

SA 468 of 2024

The SARFAESI Application filed by the applicant stands dismissed along with pending applications, if any, and the respondent FI is at liberty to proceed further under the SARFAESI Act, 2002 to recover its dues as per law. The present final order be uploaded immediately on the website of this Tribunal.

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Final Order signed, sealed, dated and pronounced in the open court on this 9th June, 2025.

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Dictated & Corrected by me.

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7\370)/5. (GOVIND BALLABH SHARMA) PRESIDING OFFICER, DRT-I, Delhi

Devender Singh Sapra v. Decent Securities Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Devender Singh Sapra v. Decent Securities Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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