Anil Kumar Srivastava, Chairperson
THE APPELLATE TRIBUNAL :
1. Instant appeal has arisen against the order dated 28.08.2023 passed by learned DRT-II, Hyderabad in S.A. No. 12 of 2022 whereby S.A. was allowed by setting aside possession notice dated 25.11.2021. Feeling aggrieved the appellant preferred the appeal.
2. Present appeal is filed by the SARFAESI applicant on limited issue of applicability of Section 31(j) of the of the SARFAESI Act, 2002 as no finding on the issue was recorded by learned DRT, but S.A. was allowed on other ground.
3. Heard learned counsel for the parties and perused the records.
4. Perusal of the ground taken by the applicant in Para ‘E’ of the SARFAESI application would reveal that in the Notice u/s 13(2) sanctioned Home Equity Facility is Rs.1,27,06,857/-whereas demanded amount is Rs. 22,05,634.83 including accrued interest which is less than 20%. Accordingly, provision of Section 31(j) of the Act would apply in this matter.
Learned counsel for the appellant submits that in the notice u/s 13(2) of the Act dated 09.08.2021 sanctioned loan shown as Rs.1,27,06,867.00 whereas demanded due was Rs. 22,05,634.83. In the possession notice same amount was mentioned, but in the written statement there is no specific rebuttal of the Ground taken by the applicant in Para E of the S.A., rather it is stated that outstanding amount against the loan was Rs.29,11,245.55.
Learned counsel for the respondent would submit that provisions of the SARFAESI Act would apply in the matter as the outstanding due is more than 20% of the loan amount and provision of Sec. 31(j) will not be applicable.
The issue is very short. Admittedly, the loan amount was Rs.1,27,06,867.00 as would appear in the Notice u/s 13(2) of the Act as well as Notice u/s 13(4) of the Act whereas demanded due was Rs. 22,05,634.83.
Section 31(j) of the Act reads as under :
“31. Provisions of this Act not to apply in certain cases.
- The provisions of this Act shall not apply to –
(j) any case in which the amount due is less than twenty per cent of the principal amount and interest thereon.”
Admittedly, no specific denial is made by the respondent financial institution in the written statement as to why the provision of Section 31(j) of the Act will not be applicable. Further, debt due as per written statement was Rs.29,11,245.55. There is no statement of account on record. It clearly shows that respondent financial institution could not substantiate their claim for an amount which is more than 20% of the sanctioned loan.
Since demanded due in the notice u/s 13(2) of the Act as well as possession notice are Rs.22,05,643.83 which are admittedly less than 20% of the sanctioned loan along with accrued interest thereon, hence, provision of Section 31(j) of the Act would squarely applicable in this appeal. Accordingly, appeal deserves to be allowed.
ORDER
5. Appeal is allowed. Action initiated by the respondent is barred by Sec. 31(j) of the Act. No order as to costs.
File be consigned to record room.
Copy of the order be supplied to the appellant and the respondent and a copy be also forwarded to the concerned DRT.
Copy of the judgement/Final Order be uploaded in the Tribunal’s website.
Order dictated, signed and pronounced by me in the open Court on this the 2nd day of April, 2024.
