Mr Amol Shivaji Rokade & Anr. v. Housing Development Finance Corporation Ltd.

…Appellant

Housing Development Finance Corporation Ltd.

…Respondent

Case No: Misc. Appeal on Diary No. 944/2023

Date of Judgement: 14/06/2023

Judges:

Mr Justice Ashok Menon, Chairperson

For Appellant: Mr Herbert Noronha, i/b Mr Prafull Mahadik, Advocate.

For Respondent: Mr Shreesh Oak, i/b M/s. SC Legal, Advocate.

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Facts:

Arguments by the Parties:

The notice under Section 13(2) is not proper because it has not been issued by an authorized officer as contemplated under Rule 2(a) of the Security Interest (Enforcement) Rules, 2002.

As per the resolution dated 15.07.2005, the authorized officer who issued the notice under Section 13(2) and filed the application under Section 14 of the SARFAESI Act was only a manager recovery and, therefore, does not come within the definition of Rule 2(a), which insists that an authorized officer should not be a person below the rank of the Chief Manager.

The proceedings under Section 14 are also impugned because the 9-pointer affidavit and accompanying application are not proper, as nothing has been stated regarding the reply sent by the Appellants to the Section 13(2) notice and the rejoinder sent by the Bank.

The application under Section 14 states regarding the reply sent to the notice under Section 13(2) and the rejoinder sent, and there is no need to mention it again in the accompanying affidavit, as the application and affidavit are to be read together. In the reply sent to the demand notice under Section 13(2), no contention was raised except for seeking time to pay the amount, and therefore, it has to be taken that the Appellants have admitted their liability to the tune of ₹1,61,38,521/- together with interest demanded in the notice. The Appellants are not entitled to any injunction because a prima facie case, the balance of convenience, and irreparable injury have not been sufficiently proved and established. The conduct of the parties has not been proper because despite seeking time to pay the amount in 2019, they have not made any substantial payment towards the debt as undertaken. Criminal proceedings have been lodged against the Appellants for not complying with the supply of flats they had constructed for their clients.

Sections and Laws Referred:

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)

Section 13(2) (Notice of Demand)

Section 14 (Enforcement of Security Interest)

Section 18(1) (Deposit of amount of debt due for filing appeal)

Security Interest (Enforcement) Rules, 2002

Rule 2(a) (Definition of Authorized Officer)

Cases Cited: