Kashish Uppal & Anr. vs Shriram Housing Finance Ltd & Anr.
2022 Latest Caselaw 1690 Del

$~25
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                         Date of decision: 25th May, 2022

+                          CS(COMM) 355/2022

        KASHISH UPPAL & ANR.                               ..... Plaintiffs
                     Through:             Mr. Jatin Sehgal with Mr. Adhirath
                                          Singh and Mr. Syed Fazl Askari,
                                          Advocates.

                             versus

        SHRIRAM HOUSING FINANCE LTD & ANR. ..... Defendants
                     Through: Ms. Usha Singh, Advocate for D-1.

        CORAM:
        HON'BLE MR. JUSTICE AMIT BANSAL

AMIT BANSAL, J. (Oral)

I.A. 8266/2022 (for exemption)

1. Subject to the plaintiffs filing the certified copies of the documents and clear and legible copies of any dim documents sought to be relied upon within four weeks from today, exemption is granted for the present.

2. The application is disposed of.

I.A. 8264/2022 (u/s 151 CPC for exemption from instituting pre- institution mediation under Section 12A of the Commercial Courts Act, 2015)

3. For the reasons stated in the application, exemption is granted to the plaintiffs from instituting pre-institution mediation under Section 12A of the Commercial Courts Act, 2015.

4. The application is disposed of.

Signature Not Verified Digitally Signed By:AMIT BANSAL

Signing Date:26.05.2022 11:38:47 I.A. 8265/2022 (u/S 149 CPC)

5. The plaintiffs are granted one week to file the deficient court fees.

6. List on 1st August, 2022.

CS(COMM) 355/2022

7. Let the plaint be registered as a suit.

8. Issue summons. Counsel for the defendant no.1 accepts summons of the suit. Summons be issued to the defendant no.2 through all modes.

9. The summons shall state that the written statement shall be filed by the defendant within thirty days from the date of the receipt of summons. Along with the written statement(s), the defendants shall also file affidavit of admission/denial of the documents of the plaintiffs, without which the written statement(s) shall not be taken on record.

10. Liberty is given to the plaintiffs to file replication(s), if any, within fifteen days from the receipt of the written statement(s). Along with the replication(s) filed by the plaintiffs, affidavit of admission/denial of the documents of the defendants, be filed by the plaintiffs.

11. The parties shall file all original documents in support of their respective claims along with their respective pleadings. In case parties are placing reliance on a document, which is not in their power and possession, its detail and source shall be mentioned in the list of reliance, which shall be also filed with the pleadings.

12. If any of the parties wish to seek inspection of any documents, the same shall be sought and given within the timelines.

13. List on 1st August, 2022.

Signature Not Verified Digitally Signed By:AMIT BANSAL

Signing Date:26.05.2022 11:38:47 I.A. 8263/2022 (u/O-XXXIX R-1 & 2)

14. By way of the present application, counsel for the plaintiffs presses for interim stay restraining the defendant no.1 from dispossessing the plaintiffs from the property bearing No. EA-50, Second Floor, Inder Puri, I.R.A.I., New Delhi or for creating third party rights in respect thereof.

15. It is the case of the plaintiffs that Sh. Arun Uppal, late father of plaintiff no.1 and husband of plaintiff no.2 had taken housing loans of approximately Rs.2,00,00,000/- from the defendant no.1 which was sanctioned by way of two Sanction Letters, both dated 31st October, 2020. In the said loans, the plaintiffs were the two applicants along with late Sh. Arun Uppal.

16. Vide the e-mail dated 15th January, 2001, a cover note was sent to the plaintiffs in which the name of the insured was shown as Sh. Arun Uppal, and his age was shown as 30 years. Late Sh. Arun Uppal wrote an e-mail dated 2nd February, 2021 to the defendant no.1 clearly stating that his age had been mentioned wrongly as 30 years, whereas he was actually 58 years old and the age of his wife had also wrongly been mentioned as 40 years, whereas she was of 53 years, and the defendant no.1 was asked to make the changes. A reminder was sent once again by late Sh. Arun Uppal vide e-mail dated 18th March, 2021.

17. In response to the email dated 18th March, 2021 sent by late Sh. Arun Uppal to the defendant no.1, the revised Insurance Cover Note was sent on behalf of defendant no.1 wherein the plaintiff no.1 has been shown as the insured, though plaintiff no.2 was wrongly shown to be the wife of plaintiff no.1.

Signature Not Verified Digitally Signed By:AMIT BANSAL

Signing Date:26.05.2022 11:38:47

18. On 7th April, 2021, another e-mail was sent on behalf of late Sh. Arun Uppal to the defendant no.1, which is set out below:

"There is another correction, the relationship between Kashish Uppal and Geeta Uppal (joint) is of a mother and son and not husband and wife.

xxx xxx xxx

Also please specify if this is a joint insurance or solely of Mr.Kashish Uppal."

19. On 25th April, 2021, Sh. Arun Uppal expired. Thereafter, an e-mail dated 30th April, 2021 was sent on behalf of the plaintiff no.1 to defendant no.1 informing them about his father's death.

20. On 10th May, 2021, an e-mail was sent on behalf of the defendant no.1 to the plaintiffs with a new insurance certificate in terms of which the plaintiff no.1 has been shown as the insured and his age has been shown as 30 years. Further, the plaintiff no.2 has been shown as the nominee in the said certificate and her age has been mentioned as 54 years.

21. A legal notice dated 26th July, 2021 was sent on behalf of the plaintiffs to the defendants, which was replied to by defendant no.2 on 14th October, 2021 wherein it has been stated that the name of the member in the said policy cover was changed to that of plaintiff no.1 due to a request received at the end of late Sh. Arun Uppal.

22. It is the case of the plaintiffs that the defendants have not produced the said request till date.

23. On account of defaults in repayment of the loan amount, the defendant no.1 initiated proceedings against the plaintiffs under the Securitisation and Reconstruction of Financial Assets and Enforcement of

Signature Not Verified Digitally Signed By:AMIT BANSAL

Signing Date:26.05.2022 11:38:47 Security Interest Act, 2002 (SARFAESI Act). Notice under Section 13(2) of the SARFAESI Act was issued on 13th August, 2021 which was replied by the plaintiff no.1 on 1st September, 2021. On 9th February, 2022, symbolic possession of the property was taken by defendant no.1.

24. On 22nd February, 2022, proceedings under Section 17 of the SARFAESI Act were initiated on behalf of the plaintiffs before the Debt Recovery Tribunal- 01 (DRT), New Delhi, in which notice was issued by the DRT on 28th February, 2022 for 1st June, 2022 and no ad interim relief was granted. Thereafter, a writ petition being WP(C) 4331/2022 titled as Kashish Uppal and Anr. v. Shriram Housing Finance Ltd. and Anr. was filed on behalf of the plaintiffs in which ad interim protection was granted in favour of the petitioners by a Division Bench of this Court vide order dated 15th March, 2022. Subsequently, counter-affidavit was filed on behalf of the defendants.

25. The said writ petition was disposed of by the Division Bench vide order dated 11th May, 2022. The order of the Division Bench is set out hereinbelow:

"1. After some arguments, Mr Jatin Sehgal, who appears on behalf of the petitioners, seeks leave to withdraw the writ petition, with liberty to take recourse to an appropriate remedy.

1.1. Furthermore, Mr Sehgal says that to enable the petitioner to take the next steps in the matter, the interim order passed by this court on 15.03.2022 may be continued for another three weeks.

2. The writ petition is, thus, dismissed as withdrawn, with a direction that the interim protection granted to the petitioners via order dated 15.03.2022 by the coordinate bench, will continue for further three weeks from today.

Signature Not Verified Digitally Signed By:AMIT BANSAL

Signing Date:26.05.2022 11:38:47 2.1. It is made clear that the interim protection granted by this court will automatically dissolve on completion of the period stipulated above i.e., three weeks.

3. Parties will act, based on the digitally signed copy of this order.

4. Consequently, pending application shall stand closed."

26. Accordingly, the present suit has been filed on behalf of the plaintiffs along with the present application.

27. I have enquired from the counsel for the plaintiffs, whether the present suit is maintainable in view of the bar under Section 34 of the SARFAESI Act and in view of the fact that the proceedings under Section 17 of the SARFAESI Act have already been initiated on behalf of the plaintiffs before the DRT. Counsel for the plaintiffs submits that the present suit is maintainable, as issues of fraud and forgery cannot be gone into by the DRT. Reliance has been placed on the judgment of a Co-ordinate Bench of this Court in Tajunissa and Anr. v. Vishal Sharma and Ors., 2022 SCC OnLine Del 18 to contend that once allegations of fraud are made in respect of a secured creditor, recourse to ordinary civil remedies cannot be denied to the plaintiffs.

28. Counsel for the plaintiffs further states that reliefs have been sought against the defendant no.2 in the present suit which cannot be claimed in a petition under Section 17 of the SARFAESI Act.

29. Counsel appearing on behalf of the defendant no.1 on advance notice submits that (i) the factum of the loan being taken by the plaintiffs as well as the defaults in payments of the loan has not been denied by the plaintiffs in the present suit; (ii) the entire dispute raised in the suit is between the

Signature Not Verified Digitally Signed By:AMIT BANSAL

Signing Date:26.05.2022 11:38:47 plaintiffs and the defendant no.2; and (iii) the role of defendant no.1 in the issuance of policy was only that of a facilitator.

30. She draws attention of the Court to the counter-affidavit filed on behalf of the defendant no.2 in WP(C) 4331/2022 wherein it is categorically stated that had the insurance being taken in the name of late Sh. Arun Uppal, the premium payable as per his age of 58 years would have been around Rs.13,00,000/- and he would also have been made to compulsorily go through a mandatory medical test, whereas in respect of plaintiff no.1, a premium of only around Rs.1,50,000/- has been charged.

31. I have heard the counsels for the parties.

32. The principal relief claimed in the present suit is in relation to the insurance policy issued by defendant no.2, and the plaintiffs have sought the relief of mandatory injunction directing the defendant no.2 to set off the entire loan amount of defendant no.1 from the amounts payable under the policy. Just because defendant no.1 has been impleaded as a party in the present suit, would not vest jurisdiction with this Court to grant interim relief in respect of the property which is subject matter of proceedings under the SARFAESI Act, in view of the specific bar contained in Section 34 of the SARFAESI Act. Further, it is not disputed that the plaintiffs have filed a petition under Section 17 of the SARFAESI Act, which is pending adjudication before the DRT, where same relief has been sought as is being sought under the present application.

33. It is a matter of fact that that the plaintiffs have neither disputed the housing loans availed by them, nor the defaults committed on their behalf in repayment of the said loans.

Signature Not Verified Digitally Signed By:AMIT BANSAL

Signing Date:26.05.2022 11:38:47

34. The plaintiffs were conscious of their remedies under the SARFAESI Act and have invoked the same. Since ad interim relief was not granted by the DRT, the petitioner filed the writ petition W.P.(C) 4331/2022 before this Court. Though initially, ad interim relief was granted vide order dated 15th March, 2021 but subsequently, vide order dated 11th May, 2022, the said petition, after arguments, was withdrawn by the plaintiffs with liberty to take a recourse of appropriate remedy.

35. The Supreme Court in Jagdish Singh v. Heeralal and Ors., MANU/SC/1126/2013 has held that any matters in respect of which, the remedy to appeal to DRT has been provided under Section 17 of the SARFAESI Act, the jurisdiction of the Civil Court is barred in terms of Sections 34 and 35 of the SARFAESI Act. Observations of the Supreme Court in paragraph 22 of the said judgment are set out below:

"22. Statutory interest is being created in favour of the creditor proposes to proceed against the secured assets, Sub-section (4) of Section 13 envisages various measures to secure the borrower's debt. One of the measures provided by the statute is to take possession of secured assets of the borrowers, including the right to transfer by way of lease, assignment or realizing the secured assets. Any person aggrieved by any of the "measures" referred to in Sub-section (4) of Section 13 has got a statutory right of appeal to the DRT Under Section 17. The opening portion of Section 34 clearly states that no civil court shall have jurisdiction to entertain any suit or proceeding "in respect of any matter" which a DRT or an Appellate Tribunal is empowered by or under the Securitisation Act to determine. The expression 'in respect of any matter' referred to in Section 34 would take in the "measures" provided under Sub-section (4) of Section 13 of the Securitisation Act. Consequently if any aggrieved person has got any grievance against any "measures" taken by the borrower under Sub-section (4) of Section 13, the remedy open to him is to approach the DRT or the Appellate Tribunal and not the civil Signature Not Verified Digitally Signed By:AMIT BANSAL

Signing Date:26.05.2022 11:38:47 court. Civil Court in such circumstances has no jurisdiction to entertain any suit or proceedings in respect of those matters which fall under Sub-section (4) of Section 13 of the Securitisation Act because those matters fell within the jurisdiction of the DRT and the Appellate Tribunal. Further, Section 35 says, the Securitisation Act overrides other laws, if they are inconsistent with the provisions of that Act, which takes in Section 9 Code of Civil Procedure as well."

36. As regards the judgment in Tajunissa supra relied upon by the counsel for the plaintiffs, the observations in the said judgment were made in respect of the submissions of the defendant therein, for the suit to be dismissed in limine. However, in the present case, summons have already been issued in the suit. This Court is at the stage of considering whether to grant interim reliefs in favour of the plaintiffs and the Court has to take a prima facie view on the maintainability of the suit while granting interim relief.

37. Even on merits, the plaintiffs have failed to make out a prima facie case. A perusal of the revised Insurance Cover Note attached with the email dated 18th March, 2021 sent by the defendant no.1 to late Sh. Arun Uppal reveals that the said revised Insurance Cover Note was in the name of the plaintiff no.1 and not in the name of late Sh. Arun Uppal. Though plaintiff no.2 was mistakenly shown as the wife of the plaintiff no.1, nothing would turn on that. A reading of the email dated 7th April, 2021 sent by late Sh. Arun Uppal in response to the email dated 18th March, 2021 seems to suggest that he was aware that the plaintiff no.1 was the insured person under the policy and he did not object to the same. The only doubt expressed by him in his email dated 7th April, 2021 to the defendant no.1 is whether the said policy was a joint policy or solely in the name of the plaintiff no.1.

Signature Not Verified Digitally Signed By:AMIT BANSAL

Signing Date:26.05.2022 11:38:47

38. Additionally, the plaintiffs have placed on record a Membership Form cum Declaration of Good Health dated 28th October, 2020 provided by them to the defendant no.2, in which plaintiff no.1 is shown as the life insured. The said form has been signed by the plaintiff no.1, though the counsel for the plaintiffs submits that the signatures of the plaintiff no.1 on the said document have been forged. However, the said allegation of forgery would have to be proved in trial. At this stage, an interim injunction cannot be granted in favour of the plaintiffs on the basis that the signatures of plaintiff no.1 have been forged.

39. In light of the above, in my prima facie view, no case of fraud or forgery has been made out by the plaintiffs against the defendant no.1. Further, in my prima facie view, insofar as defendant no.1 is concerned, against whom interim orders are sought, the present suit would be barred under Section 34 of the SARFAESI Act. Therefore, I am not inclined to pass an interim order at this stage.

40. In view of the above, no grounds for grant of interim reliefs are made out. Dismissed.

AMIT BANSAL, J.

MAY 25, 2022 at

Signature Not Verified Digitally Signed By:AMIT BANSAL

Signing Date:26.05.2022 11:38:47