Ashish Kumar v Tata Capital Financial Services Ltd & Ors. (Delhi High Court)

In the case of Ashish Kumar v Tata Capital Financial Services Ltd & Ors.the petitioner sought quashing of a notice issued under the SARFAESI Act regarding possession of property. The petitioner claimed that the sale deed registered in his name was genuine and alleged fraud in respect of another sale deed executed for the same property. The respondent NBFC objected, citing the ARC Phoenix ruling, which restricts the jurisdiction of the court in such cases involving NBFCs. The court held that writ petitions are not maintainable against NBFCs, referring to Section 14(2) of the SARFAESI Act and advising the petitioner to approach the Debt Recovery Tribunal (DRT) for obtaining relief under section 17 of the Act. Additionally, allegations of fraud raised by both parties were investigated by police. Therefore, the Delhi High Court dismissed the writ petition, allowing the petitioner to pursue his grievance before the DRT. All pending applications have also been disposed of accordingly, without prejudice to the claims of both parties. The court issued a signed copy of the order to the petitioner.

FULL TEXT OF THE DELHI HIGH COURT JUDGMENT/ORDER

1. An affidavit has been filed on behalf of the petitioner proving service of notice of the writ petition and the documents having been served on respondent No.1. Counsel for respondent no.1 is also appearing today.

2. After hearing the learned counsel for the parties and in furtherance of the previous order dated 21.08.2024, the petitioner invokes the jurisdiction of this Court to issue appropriate summons, order or directions against respondent no.1 in regarding property. in question seeking quashing of the notice dated 02.08.2024 issued by the Court Receiver pursuant to the order dated 26.07.2024 of the learned South West Judicial Magistrate, Dwarka Courts, New Delhi (“CJM“) in the proceedings under Article 14(2) of the SARFAESI Act¹.

3. At the outset, learned counsel for respondent No. 1 contended that this Court has no jurisdiction to issue directions primarily on the ground that the writ petition is filed against an NBFC.²for which he invited reference to the decision of the Supreme Court in the case of Phoenix ARC Private Limited v. Vishwa Bharati Vidya Mandir³.

4. Counsel for the applicant referred to the decision in the case PHR Invent Educational Society v. UCO Bank⁴ in order to examine the point that the writ petition is maintainable.

5. Devoid of unnecessary details, the petitioner contends that he availed a home loan from respondent No.4/NBFC in terms of sanction letter dated 26.02.2022 for purchase of the subject property and that they had diligently made payment of EMIs.⁵ and finally a sale deed dated 05.09.2024 was registered in his name (Annexure-2).

6. The grievance of the petitioner is that suddenly he found a notice pasted on the property in question dated 02.08.2024 by which, allegedly, in accordance with the procedure in Complaint No. 22032/2024, an indication is given that the physical possession of the property will be taken over by the respondent no.1 on 23.08.2024.

7. Learned counsel for the petitioner submitted that fraud has been exercised against the petitioner to the extent that he has now been able to obtain a copy of another registered sale deed dated 23.01.2023 which would suggest that the respondent No.5, Mr. Amit Gupta and respondent No.6, Mrs. Pooja Gupta, alleged that they sold the property in question to Mohd. Furkan Qureshi S/o Mr. Rahis Qureshi against whom SARFAESI proceedings were initiated by way of complaint No. 22032/2024 which resulted in an order dated 26.07.204. It is vehemently urged that the personal photographs of respondents Nos. 5 and 6 are different from the sale deed which was executed in his favor and that fraud has been practiced against him.

8. Learned counsel for respondent No.1, apart from the preliminary objection mentioned above, pointed out that in the meantime, complaints had been filed not only by them but also by the petitioner with the police for the alleged fraud and that the matter would obviously be investigated in accordance with the law.

9. The central question is which of the acts of sale are genuine and which the parties can rely on.

10. Be that as it may, the present petition against the NBFCs cannot be entertained. The petitioner being an aggrieved party can approach the Debt Recovery Tribunal (“TDR“) within the meaning of article 17 of the SARFAESI law. Therefore, this motion is dismissed without prejudice.

11. The pending application is also closed.

12. As requested, a copy of this order be provided dasti under the signatures of the Master of the Court.

Remarks :

1 Securitization and Reconstruction of Financial Assets and Enforcement of Security Act 2002.

² Non-Banking Financial Company

³ (2022) 5 SCC 345

⁴ (2024) CCN online SC 528

⁵ Equal monthly payments