Dismissed

Naresh joshi v. Cholamandlam investment and finance company Ltd.

DRT26 Aug 2025SA/91/2024

Case brief

AI extract

What is this about?

DRT-I, Chandigarh dismissed an application challenging SARFAESI action on the grounds of improper CERSAI registration, typographical errors in notices, and non-impleadment of co-owners. The court held that trivial mistakes without prejudice do not invalidate the enforcement action.

What did the court decide?

The Section 17 application was dismissed; the SARFAESI action is valid; pending IAs were disposed of.

Naresh joshi versus Cholamandlam investment and finance company… — Consumer Protection | DRT (2025)

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SA No.91 of 2024

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA No. 91 of 2024 Naresh Joshi

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Versus

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A.O. Cholamandlam Investment and Finance Company Limited

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Dated: 26.08.2025

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Item No. 02 (Supplementary)

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Argued by: Mr. Akhilesh Vyas, Counsel for the Applicant. Mr.Rohit Sapra, Counsel for the Respondent FI.

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Naresh Joshi (Applicant) has filed this Securitization Application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), against the Authorized Officer, Cholamandlam Investment and Finance Company Limited (Cholamandlam) (Respondent).

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Admittedly, vide sanction letter dated 31.12.2018, Cholamandlam had sanctioned a home equity loan of Rs. 42 lacs to Applicant (Naresh Joshi); Gaurav Joshi; Kiran Bala and M/s Lavanya Furniture and Electronics. The loan was repayable in 180 monthly installments of Rs. 49,064/- each w.e.f. 05.09.2019 alongwith floating rate of interest. To secure the loan, Applicant; Gaurav Joshi and Kiran Bala had created security interest in respect of their properties in favour of Cholamandlam. Whereas, Gaurav Joshi had created security interest in respect of 13.43 sq yards and 12.95 sq. yards in the shop; Naresh Joshi had created security interest in respect of 11.58 sq. yards in the shop and Smt. Kiran Bala had created security interest in respect of plot No. 52, measuring 100 sq. yards. Applicant and other borrowers did not make the repayment as per the repayment schedule. Applicant and other borrowers issued post-dated cheques, which on presentation, were dishonored by their bank for want of

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SA No.91 of 2024

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sufficient funds. On the request of the Applicant, the loan was restructured on 30.09.2021. On 09.09.2023, the account was declared NPA and an intimation to this effect was also sent by Cholamandlam. On 15.09.2023, Cholamandlam issued the notice under Section 13(2) of the SARFAESI Act, demanding as sum of Rs. 50,18,478/-, due as on 11.09.2023. Despite the service of the demand notice, Applicant and other borrowers did not make the repayment of the loan. On 30.11.2023, Cholamandlam took the symbolic possession. Cholamandlam also obtained the order from DM under Section 14 of the SARFAESI Act. It is admitted on the record that Cholamandlam has sold the house in public auction.

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Applicant has challenged the SARFAESI action in the present case. It is stated that the Cholamandlam did not declare the account NPA properly. Cholamandlam has violated the master circular dated 02.07.2013 issued by RBI. Applicant has prayed that the possession notice dated 28.11.2023 (Annexure A-3) and demand notice dated 15.09.2023 (Annexure A-1) be set aside and Cholamandlam be restrained from taking the possession of the shop. Applicant has also prayed that Cholamandlam be directed to settle the account of the Applicant on similar lines as of other persons.

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Cholamandlam, in reply to the application, has denied the case of the Applicant. It is stated that Cholamandlam had followed proper procedure and rightly declared the account NPA. Applicant has not impleaded Gaurav Joshi and Kiran Bala as parties to the present SA. Accordingly, it is stated that there is no merit in the present SA and the same be dismissed.

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I have heard Mr.Akhilesh Vyas, counsel for the Applicant and Mr.Rohit Sapra, counsel for the Respondent FI.

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SA No.91 of 2024

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Mr.Vyas, counsel for the Applicant has argued that the whole of the SARFAESI action by the Respondent FI is illegal, null and void . Drawing my attention to the notice under Section 13(2) of the SARFAESI, counsel submitted that in the same, the area and size of the shop has been mentioned as 37.96 sq. feet, whereas, the total area of the shop is 37.96 sq. yards. That apart, in the CERSAI registration, the area of the shop has been mentioned as 342 sq. feet. Mr.Vyas further argued that in the CERSAI registration, Gaurav Joshi; Naresh Joshi and Kiran Bala have been described as owners of the shop, whereas, the fact is that only Gaurav Joshi and Naresh Joshi are the owners. Further, in respect of the house, whereas, in the sanction letter the property has been motioned as plot No. 53; in the notice under Section 13(2) it is mentioned as plot No. 52. Regarding the house, it was argued that in the notice under Section 13(2), plot No. 52 has been mentioned, however, in the CERSAI registration house No. 53 has been mentioned. Again, Gaurav Joshi and Naresh Joshi have been stated to be the owners of the house, whereas, it is an admitted fact that only Kiran Bala is the owner of the house. Counsel submitted that all these facts show that there is no proper CERSAI registration. Mr.Vyas has placed reliance upon the judgment passed by the Hon’ble Bombay High Court in WP2935-2018 & Connected, titled Jalgaon Janta Sahakari Bank Limited and another versus Joint Commissioner of Sales Tax, decided on 30.08.2022 .

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Per contra , Mr.Sapra, counsel for the Respondent FI has argued that Applicant has neither impleaded Gaurav Joshi nor Kiran Bala as parties to the present SA. Accordingly, this SA is not maintainable. Mr.Sapra further argued that Kiran Bala was the owner of the house, which has been sold. Applicant has not moved any application for amendment of SA challenging the sale of the house. Counsel further

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SA No.91 of 2024

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argued that only Kiran Bala could challenge the auction. However, she has not filed any SA and she has not been impleaded as party. Regarding the description of the property, counsel submitted that Kiran Bala had mortgaged plot No. 52. This fact has been duly mentioned in the notices under Section 13(2) and 13(4) of the SARFAESI Act. Since, the house has been sold and the auction has not been challenged, any defect in the same is of no consequence. Regarding the shop, counsel submitted that there is a typing error in the notice under Section 13(2) and instead of 37.96 sq. yards, 37.96 sq. feet has been mentioned. Regarding other mistakes in the CERSAI registration, counsel submitted that they are of no consequence. Accordingly, it is submitted that there is no merit in the present SA and the same be dismissed.

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I have considered the rival contentions.

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Admittedly, Kiran Bala had created security interest in respect of the house. Cholamandlam has sold the same in the public auction. Kiran Bala has not challenged the same. Even Applicant has not challenged the auction. The auction had taken place in February, 2025. Accordingly, any arguments in respect of the house are of no consequence.

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As far as the shop is concerned, there is no denying the fact that there is a typing mistake in the notice under Section 13(2), regarding the area of the property instead of word ‘yards’, word ‘feet’ has been mentioned. Hon’ble Supreme Court in L&T case has held that any

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SA No.91 of 2024

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trivial mistake is not sufficient to set aside the SARFAESI action, unless some prejudice has been caused to the borrower. I am of the considered view that the borrower has not prejudiced in any manner. Moreover, Applicant has not joined his brother Gaurav Joshi, who is the co-owner in the property. In view of the above, I am of the considered view that there is no merit in the present SA. The same is hereby dismissed . All the pending IAs, if any, are also disposed of, accordingly.

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Registrar is directed to send a copy of this order to all the parties, as per rule. File be consigned to record room after due compliance.

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(A S Narang) Presiding Officer DRT-I, Chandigarh

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Pronounced in open court Dated: 26.08.2025 Manoj

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Naresh joshi v. Cholamandlam investment and finance company Ltd.

Case brief

What is this about?

What did the court decide?

Naresh joshi v. Cholamandlam investment and finance company Ltd.

Case brief

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What did the court decide?

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