18 Jan 2121

If any party fails to pay the debts due after giving opportunity, the party will have no right to seek redemption upon the subject property - Delhi High Court

Case : Major Singh Sidhu vs. Indian Bank and Ors. W.P. (C) 11078/2020 & C.M.No.34637/2020

Court : Delhi High Court

Bench : Justice Vipin Sanghi and Justice Rekha Palli

Decided on : 18 Jan 2121

The Relevant Statutes

The SARFAESI Act, 2002

Brief Facts and Procedural History:

1. The Petitioner purchased a property bearing no. B-39, HIG Flat, 3rd Floor. Dilshad Extension, Delhi from Respondent no. 2 by a registered power of attorney dated 31.12.2008. He was having possession of the property and he had not received any notice from respondent no 2 or respondent no 1 till November 2011. On 8.1.2011, when he returned from an outstation visit, he found a possession notice on the property for the first time. At this time, The Petitioner learnt that the respondent had mortgaged this property to respondent no.1 for securing the repayment of the loan taken by him. Due to his failure to pay the dues of the bank (Respondent no 1), the property was sold to respondent 3 and which was confirmed on 30.06.2008.

2. Petitioner filed a SA (SARFAESI Application) before DRT where he was willing to pay the debts and also it was permitted to pay the dues to the bank but it came to be rejected by order dated 24.09.2020 and held it was barred by the limitation After this no furthers steps were taken for three years and the petitioner filed a belated S.A. on 16.12.20. The DRT also rejected the petitioner's claim that he was the owner of the subject property which was transferred by GPA dated 30.12.2004 which further was executed in his favour by respondent no 2. Afterwards, The DRT also did not find any infirmity in the auction of the subject property as it was in accordance with the procedure in the SARFAESI Act, 2002. Afterwards, the legal heirs of the petitioner preferred an appeal before DRAT which was also rejected and granted three months to the legal representatives of the petitioner to surrender the property. The present petition was made by the petition which challenged the order passed by DRAT.

The Issue of the Case

Whether the petitioner has the right to claim over the subject property?

The Observations of the Court

The Honourable Delhi High Court observed that decisions taken by both DRT and DRAT are justified. The Honourable Delhi High Court observed that as respondent no 2 was given an opportunity to pay the dues to the bank which he had failed to do so which results in his right to seek redemption stands forfeited and also the petitioner has no longer the right which he claims under GPA. The Honourable High Court observed that the petitioner remained silent for three years. The Auction purchaser also acquired legal and equitable rights upon the sale certificate.

The Decision Held by the Court

The Writ Petition is dismissed. There is no infirmity in the impugned order passed by DRT and DRAT.

Click here to view/download the judgement >