Sanjay Nandkishor Jaiswal vs Phoenix ARC Private Limited on 15 March 2021

JUDGMENT

1. This M.A. No.37/2018 is filed on 24th December, 2018 by the applicant for unintentional condonation of delay of 06 days in challenging the notice dated 1st November, 2018 issued by the Respondent No.5excluding statutory period of 45 days permitting registration of Securitisation Appeal.

2. The applicant submits in the present Securitisation Application that on 12th July, 2011 he has purchased the property bearing Flat No.18, 2nd Floor, B-Wing Building, Roop Mahal Complex, CTS No.11395, Fazalpura, Aurangabad vide registered Sale Deed bearing day Book No.3980 dated 12th July, 2011 for a total consideration of Rs.15,00,000/- (Rs. Fifteen Lacs Only) from one Shaikh Rehana Shaikh Ebrabhim.

3. The applicant further submits that at the time of purchasing the above said property he had taken due care and had verified the title deeds, revenue record before the execution of the said sale deed. The applicant further submits that he had also verified the title deeds of the predecessor in title. The predecessor Shaikh Rehana Shaikh Ebrabhim had purchased the property from one Syed Salim vide registered Sale Deed dated 19th January, 2010. The said Syed Salim had purchased the said property from the respondent No.2 herein vide registered Sale Deed dated 19th July, 2008.

4. The applicant further submits that for purchasing the said property bearing Flat No.18, 2nd Floor, B-Wing Building, Roop Mahal Complex, CTS No.11395, Fazalpura, Aurangabad, he had obtained loan from the Khamgaon Urban Co-op. Bank Ltd. Aurangabad. The applicant further submits that he had obtained the Search Report of the property on 22nd March, 2011.

5. The applicant further submits that while obtaining the loan from the Khamgaon Urban Co-op. Bank Ltd., Khamgaon, Branch Aurangabad he had executed the registered Mortgage Deed for loan of Rs.8,00,000/- vide Day Book No.3981 dated 12th July, 2011. The applicant further submitted that since the applicant was in default the account of the applicant with Khamgaon Urban Co-operative Bank Ltd., Branch Aurangabad was declared as Non Performing-Asset and proceedings under the Securitisation Act were initiated against him. The applicant further submitted that the guarantor namely Chisty Saliquddin S/o Ziauddin for the loan granted to the applicant by the Khamgaon Urban Co-operative Bank Ltd. Aurangabad challenged the action of the Khamgaon Urban Co-operative Bank Ltd. Aurangabad by filing Securitisation Application No.46/2013 before this Tribunal and the said S.A. came to be dismissed by the Tribunal on 27th January, 2014. It is further submitted by the applicant that thereafter the he has settled the loan account with the Khamgaon Urban Co-operative Bank Ltd., Aurangabad by making payment of the loan amount and the said bank has issued No Dues Certificate on 22nd December, 2016 to him.

6. It is further submitted by the applicant in in April, 2012 he became aware of pendency of Arbitration Darkhast No.100/2011 filed by City Financial Consumer Finance Ltd. Before the Hon’ble District Judge, Aurangabad. In the said Arbitration Darkhast No.100/2011 he has filed the objections on 14th January, 2013. To the said objections the City Financial Consumer Finance Ltd. filed its say on 4th April, 2013. The application for substitution of name of the decree holder was filed on 19th March, 2013 before the Hon’ble District Judge, Aurangabad.

7. The applicant further submits that a notice of symbolic possession was published in the Times of India dated 5th July, 2015 stating therein that the respondent no.1 has taken symbolic possession of the property bearing Flat No.18, 2nd Floor, B-Wing Building, Roop Mahal Complex, CTS No.11395, Fazalpura, Aurangabad. Being aggrieved by the said symbolic possession the applicant filed S.A. No.71/2015 before this Tribunal against the respondent No.1. This Tribunal vide its order dated 2nd September, 2015 was pleased to issue notice to the respondent no.1 with directions to maintain status-quo till next date of hearing. The applicant further submits that the said S.A. No.71/2015 proceeded ex-parte against the respondent No.1 on 14th March, 2016 and the same is pending for adjudication and the next date of hearing was 11th January, 2019.

8. The applicant further submitted in his S.A. that the Circle Officer, Aurangabad pasted notice dated nil on the alleged property on 28th November, 2018 intimating therein that the possession of the alleged property will be taken in view of the order dated 4th April, 2016. The applicant further submits that for the first time he became aware of the order obtained by the respondent no.1 against the respondent nos.2 and 3 who are the alleged borrowers of the respondent no.1. It is submitted by the applicant that immediately he obtained the copy of the application filed by the respondent no.1 before the District Magistrate, Aurangabad dated 4th April, 2016.

9. It is further submitted by the applicant that he had filed an application to the Circle Officer on 18th December, 2018 for supplying the copy of the notice dated nil with the date on it. The Circle Officer, Aurangabad provided the copy of the notice dated 1st November, 2018 to the applicant. The applicant submits that as per the provisions of the Securitisation Act, the Securitisation Application needs to be filed within 45 days from the cause of action. The applicant further submits that the respondent no.5 issued notice dated 1st November, 2018 in the name of the respondent nos.2 and 3 and they do not know the applicant. He came to know when the notice dtd. 1st November, 2018 was pasted on the property i.e. alleged secured asset on 28th November, 2018. Since the notice dated 01.11.2018, he has filed the present application for condonation of delay of 06 days to avoid complications.

10. It is submitted by the applicant that after having knowledge he collected the relevant documents which took considerable time. He was also applied for certified copies of certain documents which were necessary to be placed on record and it took considerable time and as such causing of 06 days delay in filing the Securitisation Application. The applicant further submits that the delay caused is not intentional and deliberate and as such the irreparable loss, injury and prejudice will be caused to the applicant in case the delay of 06 days is not condoned. He submits that he is neither a borrower nor a guarantor and to suffer as he has invested his life saving in purchasing the alleged secured asset.

11. Lastly, the Applicant prayed for allowing his application and the delay of 06 days caused in filing the Securitisation Application in challenging the notice dated 1st November, 2018 issued by the Respondent No.5 be condoned in the interest of justice.

12. To this Miscellaneous Application No.37/2018 respondent-no.1 has filed Reply (Exhibit-07) stating that the respondent no.1 is a company incorporated under the Companies Act and is registered as Securitisation & Reconstruction Company now an Asset Reconstruction Company, pursuant to Section 3 of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (for the sake of brevity herein after referred to as the SARFAESI Act’).

13. It is further submitted by the respondent no.1 that the respondent no.1 is a Assignee of City Bank i.e. the Assignor and vide \Deed of Assignment dated 18th July, 2012 executed between themselves the Assignor City Bank and the respondent no.1 Assignee, the respondent no.1 being assignee acquired all the rights, title & interest over the dues recoverable from the applicant alongwith underlying security interest and financial documents created upon the secured assets and entitled to exercise and / or continue all the rights as that of Assignor over the secured asset and this fact of assignment of the debt has already intimated to the applicant by the assignor bank and the applicant is aware of the same.

14. It is further submitted by the respondent no.1 that the application filed by the applicant is absolutely false, frivolous and not maintainable in law. The applicant has failed to specify cogent, concise and convincing grounds to

file the above application for stay of the actions initiated by the Respondent No.1 of taking physical possession of the properties i.e. Flat No.18, admeasuring 80.37 Sq. Metrs, (865.15 Sq.ft.) super built up area proportionate area of the common space, balconies, Lobbies, Stair Case, Ducts, Boxes Covered Parking Terraces Individual if any etc. situated on Stilt + Second Floor B Wing in Building “Roop Mahal” constructed on property CTS No.11395, Sheet No.20, Municipal House 2-8-17, situated at Fazalpura, Aurangabad and hence it is to be dismissed with compensatory cost.

15. The respondent no.1 submits that they have complied the provisions of the SARFAESI Act-2002 and Security Interest (Enforcement) Rules, 2002. It is further submitted by the respondent no.1 that the respondent Nos. 2 and 3 availed credit facility from the City Financial Consumer Finance India Ltd. to the tune of Rs.6,40,000/- under reference of Account No.13724761 under terms and conditions mentioned in the Home Loan Agreement and also deposited original title deeds in respect of the mortgaged properties i.e. Flat No.18, admeasuring 80.37 Sq. Meters, (865.15 Sq.ft.) super built up area proportionate area of the common space, balconies, Lobbies, Stair Case, Ducts, Boxes Covered Parking Terraces Individual if any etc. situated on Stilt + Second Floor B Wing in Building “Roop Mahal” constructed on property CTS No.11395, Sheet No.20, Municipal House 2-8-17, situated at Fazalpura, Aurangabad. It is submitted that the respondent nos.2 and 3 failed and neglected to comply the terms and conditions of the said Home Loan Agreement and as such the account of the respondent nos.2 and 3 were declared Non Performing-Asset on 30th November, 2009 under guidelines of RBI.

16. It is further submitted by the respondent no.1 that the Assignor City Bank vide Deed of Assignment dated 18th July, 2012, sold, transferred, assigned and released in favour of respondent no.1 the entire amount payable by the respondent nos.2 and 3 in respect of the said credit facility alongwith the security and secured interest in respect of the mortgaged properties.

17. Pursuant to the said assignment, the Respondent No.1 has initiated actions under the provisions of the SARFAESI Act, 2002 and issued Demand Notice under section 13(2) of the SARFAESI Act on 3rd September, 2013 calling upon the respondent nos. 2 and 3 to pay the amount of Rs.10,88,185/- as on 02-09-2013 with further interest @14.5% per annum from 3rd September, 2013 until full payment within 60 days from the date of notice but the respondent nos.2 and 3 failed to comply the same. Thereafter, the respondent no.1 filed an application under section 14 of the SARFAESI Act, 2002 before the District Magistrate Aurangabad bearing

Case No.17/2016 and as such vide order dated 4th April, 2016 the District Magistrate directed the Tahsildar Aurangabad to take the possession of the mortgaged properties and handover the same to the respondent no.1. It is further submitted by the respondent no.1 that the respondent nos.2 and 3 created securities interest on the mortgaged properties on 14th November, 2007 and the original title documents are lying in the custody of the respondent no.1 and the charge over the said property is valid and subsisting and the respondent no.1 is entitled to enforce the security interest over the mortgaged properties to recover its dues.

18. It is submitted by the respondent no.1 that the applicant was fully aware about the transaction between the respondent no.1 and the respondent nos.2 and 3 and the mortgage of the secured assets with the City Financial Consumer Finance India Ltd. and the loan amount was directly paid to the applicant and the same is duly acknowledged by the applicant. It is submitted that the applicant has filed this application with malafide intention to perpetuate the fraud and delay the recovery proceedings initiated by the respondent no.1. The respondent no.1 has a charge over the said secured assets.

19. The respondent no.1 denied the allegations, various statements and contentions and submissions made in the application which are contrary too and inconsistent with whatever stated in the application. The respondent no.1 submits that the applicant is not entitled for any reliefs sought.

20. It is prayed by the respondent no.1 that the applicant be directed to handover the physical possession of the secured asset after removing the articles. The applicant has not made out any case for setting aside the measures initiated by respondent no.1 and on the contrary, the balance of convenience and prima facie leans in favour of the respondent no.1. The respondent no.1 prayed for dismissal of the application with costs.

21. The learned counsel for the applicant submits that he was protected against the possession in another Securitisation Application which got dismissed for non-appearance inadvertently. He says that there are triable issues in this matter including the Respondent ARC is secured creditor at or not?

22. The learned counsel for the respondent no.1 has intimated that he is hospitalized due to Corona. Anyhow there is only six days delay I deem it fit to condone it.

23. Considering the above circumstances, I am of the view that the applicants request may be allowed by condoning the delay giving an opportunity to contest the Securitisation Application as the delay has been explained and the delay is only for 06 days. In view of the above, I am of the opinion that the delay of four days must be condoned.

24. Considering the pleadings of the parties, documents and the oral submissions, I pass the following order

ORDER

1. Miscellaneous Application No.37/2018 is allowed.

2. The Registry is directed to register the Securitisation Application pending for registration as per rule.

3. No order as to costs.

4. In view of the above observations and circumstances, let the respondent no.1 postpone taking off the possession and not take possession tomorrow.

5. Status-quo to be maintained till next date of hearing.

6. The Advocate for the applicant is permitted to convey the said orders to the respondent no.1 and the Tahsildar for not taking possession of the secured asset.

7. Let the reply to the Securitisation Application be filed.

List the matter for filing reply and rejoinder and arguments in the Securitisation Application on 5th April, 2021.

(Vimal Gupta) Presiding Officer, Debts Recovery Tribunal, Aurangabad.