Date of Decision: 12.01.2021
2 of 10 R. S. KULHARI, CHAIRPERSON
1. This appeal has been preferred under section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SARFAESI Act) against the order dated 07.05.2019 passed by the Presiding Officer, DRT, Allahabad, whereby the securitization application (S.A.) filed by the appellant was dismissed.
2. The respondent-Bank granted a term loan of Rs. 6.00 lacs to the appellant. In order to secure the loan, the appellant created equitable mortgage over his immovable property by depositing the title deed with the respondent-Bank. The borrower committed default in repayment of the loan, hence the account was classified as NPA on 30.06.2016. The respondent-Bank issued demand notice dated 15.07.2016 under section 13(2) of the SARFAESI Act for a sum of Rs. 6,54,761/. Since the borrower did not pay any amount against the said demand, therefore, the Bank took the symbolic possession of the mortgaged property by issuing the possession notice dated 12.01.2017 under section 13(4) of the SARFAESI Act.
3. In the meantime, the respondent-Bank filed an application before the District Magistrate, Faizabad on 14.10.2016 under section 14 of the SARFAESI Act,
3 of 10 which was allowed vide order dated 16.11.2017 directing the administrative authorities for physical possession. Against the said order, the appellant filed a writ petition no. 28564 of 2017 before the Honble High Court, which was dismissed vide order dated 24.11.2017 on the ground of alternative remedy.
4. During the pendecy of the application before the D.M., the sale notice was issued on 02.08.2017 scheduling the auction of the property on 14.09.2017 on the basis of the latest valuation report dated 18.01.2017. The property has been sold in favour of the respondents no. 4 and 5. After deposit of sale price, the sale certificate has been issued on 05.10.2017 and the sale deed has also been executed on 21.11.2017. In pursuance of the order dated 16.11.2017 passed by the District Magistrate, the physical possession of the property has been taken on 18.04.2019.
5. After dismissal of the writ petition filed by the appellant on the ground of alternative remedy, the appellant filed the S.A. No. 583/2017 before the Tribunal below challenging the entire actions of the Bank on the ground of non-service of demand notice, possession notice and the sale notice. The Tribunal below vide impugned order dismissed the SA filed by the appellant holding that the respondent-Bank has rightly classified the Account as NPA in terms of the
4 of 10 RBI guidelines. The notices issued under section 13(2) and 13(4) of the SARFAESI Act as well as the sale notice were duly served upon the applicants as per Act and Rules. Being aggrieved by the said order, the present appeal has been filed by the appellant.
6. Learned counsel for the appellant submitted the demand notice alleged to have been issued on 15.07.2016 was never served to the appellant. The stand of the Bank before the DRT was that the same was delivered by hand to minor son of the appellant, but the alleged signatures of the appellants son Vinay Kumar were forged, which is supported by the opinion of the expert. This fact came to the knowledge after filing objection by the Bank. Thereafter, an amendment application was filed before the DRT, but the same was not allowed. Since the demand notice was not served, therefore, all further proceedings are bad in law.
7. Learned counsel has further contended that the possession notice dated 12.01.2017 was stated to be served to his minor son, but no such notice was served to the appellant and the photos of the appellants son were obtained fraudulently and were shown to be with the possession notice affixed on the premises. Similarly, the sale notice was also not served,
5 of 10 therefore, all the proceedings were conducted in utter disregard to the provisions of the SARFAESI Act. The appellant could not deposit the amount in time because of some adverse circumstances. Now he is ready and willing to liquidate the dues of the Bank. Therefore, the auction conducted by the Bank be set aside.
8. On the contrary, the learned counsel for the Bank submitted that the demand notice was sent through Registered Post dated 19.07.2016 and as an abundant precaution, the same was also delivered by hand to the son of the appellant. The possession notice dated 12.01.2017 was also sent through registered post and simultaneously, delivered to Vinay Kumar, son of the appellant. The same was affixed on the premises and published in the newspapers. The sale notice dated 2.8.2017 was also sent through Registered Post and was not returned unserved, therefore, the same was received by the appellant. Therefore, no irregularity has been caused in service of notices. After deposit of sale price, the sale certificate has been issued and the sale deed has also been executed in favour of the auction purchaser, as such right to redeem the property has also been extinguished. Further, the
6 of 10 appellant has neither raised the issue of demand notice before the District Magistrate nor before the Honble High Court in writ petition and an amendment application was filed after more than one year after filing of objection by the Bank. Thus, the appellant has concocted the wrong story to derail the proceedings of the recovery of the Bank.
9. Learned counsel for the auction purchaser, while supporting the contentions of the learned counsel for the Bank, further added that the auction purchaser has purchased the property bonafidely and the appellant is unnecessarily dragging the litigation, therefore, the appeal be dismissed with heavy costs.
10. I have considered the rival contentions of the learned counsels for the parties and perused the record.
11. The appellant has not denied the factum of receipt of loan, execution of documents and non-payment of the installments in time. The contention that the demand notice was not served, is not tenable. The demand notice dated 15.07.2016 was delivered to the appellant through Registered Post dated 19.07.2016 on the recorded address, which was not received unserved. If it was not received by the appellant, the
7 of 10 appellant was free to obtain the record from the post office to rebut the contention of the Bank, but no such evidence has been filed. Therefore, under section 27 of the General Clauses Act, it is presumed that the same was delivered to the appellant. This Tribunal need not to ponder over the alleged forgery of the signatures of son of the appellant with regard to delivery of demand notice by hand, because the said issue is pending before the competent criminal court. However, the delivery by hand in addition to sending the demand notice by registered post was not required, therefore, whether it was served by hand to minor son of the appellant or his signatures were manipulated, is of no avail, as far as the service of demand notice on the appellant is concerned, which is otherwise proved to have been served through registered post.
12. The possession notice dated 12.01.2017 was sent through Registered Post on 21.01.2017. Before that, the possession notice was served to the son of the appellant, which has not been denied by the appellant also, therefore, the factum of delivery of possession notice at the time of taking symbolic possession is proved and it hardly matters that the same was delivered to the minor son of the appellant. In addition to it, copy of the demand notice was also served
8 of 10 through Registered Post. The record submitted by the Bank reveals that the possession notice was affixed on the premises and was published in two newspapers in accordance with the Security Interest (Enforcement) Rules, 2002. The sale notice dated 2.8.2017 was also sent through Registered Post on 4.8.2017 on the recorded address and before that, the appellant was pleading his case before the D.M. Thus, the sale notice was served and the appellant was well aware about all the proceedings of the bank.
13. It is also a matter of record that the appellant had never raised the objection before the D.M. with regard to non service of demand notice or the possession notice. This aspect was also not pleaded before the Honble High Court in Writ Petition No.28564/2017. If the demand notice or the possession notice was not served to the appellant, he ought to have mentioned this fact in the reply filed before the D.M. or writ petition before the Honble High Court. Further, the issue of service of demand notice and the possession notice was not raised just after filing the reply by the Bank before the DRT and even this fact was not mentioned in the rejoinder filed by the appellant on 19.03.2018 and instead the amendment application was filed after more than one year, which goes to
9 of 10 show that it was an after though contention to raise such unfounded issues. Thus, I find no infirmity in the findings of the Tribunal below with regard to the service of these notices.
14. It is to be noted that the demand notice and possession notice were duly served to the appellant, who had not challenged the same within stipulated period of limitation, therefore, the relief qua these notices was otherwise time barred. The appellant was estopped from raising these issues in the present S.A. on the principle of waiver of his rights in this regard.
15. The Bank had obtained the latest valuation report on 18.01.2017 and auctioned the property on 14.09.2017 in favour of the respondents No.4 & 5. After deposit of sale price, the sale certificate has been issued on 5.10.2017 and the sale deed has also been executed on 21.11.2017. The physical possession of the property has also been taken on 18.04.2019 in compliance of the order dated 16.11.2017 of the D.M. Thus, after execution of the sale deed, the right of the appellant to redeem the property has also been extinguished in view of the judgment passed by the Honble Supreme Court in Dwarika Prasad Vs. State of U.P. & Others, 2018 SCC 260.
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16. In view of the above, the appeal is devoid of merits, hence the same is dismissed with no order as to costs.
17. A copy of this judgment be sent to the parties as well as the DRT concerned and be also uploaded on the e- DRT portal. Chairperson Date: 12.01.2021 VN Giri