The DRAT affirmed the auction proceedings, rejecting the appellant's claims of ownership and improper demarcation due to a lack of new evidence and clear distinctions in property boundaries.
The Debts Recovery Appellate Tribunal (DRAT), Delhi Bench of Justice Brijesh Sethi (Chairperson) held that where previous applications to stay an auction based on identical ownership and demarcation claims have been dismissed, the Tribunal will uphold the legality of the respondent financial institution's actions if no new prima facie evidence is presented and clear boundary distinctions exist between the mortgaged property and the appellant’s claimed portion. Thus, without overlapping ownership or error in property identification, there is no basis to halt the auction proceedings.
In this case, the appellant contested the Debt Recovery Tribunal's (DRT) order dated 08.03.2024, which denied their request to stay the auction of a property scheduled for 11.03.2024. The appellant claimed ownership over a distinct 80 sq. yards portion of a larger plot that the respondent financial institution (FI) had mortgaged to secure a loan. Notably, the appellant asserted they held no borrowing or guarantor role in the mortgage agreement, which pertained to a 135 sq. yard plot mortgaged by Mr. Sanjay Yadav and Ms. Soni Yadav. Despite these assertions, the DRT dismissed the appellant's interim application, noting that previous requests with similar arguments had already been denied on 06.09.2023 and 25.10.2023. The DRT concluded there were no new grounds or evidence to justify reconsidering the appellant’s claims.
In their subsequent appeal, the appellant highlighted discrepancies in the property's identification, asserting that only 80 sq. yards of the total 280 sq.yard area was theirs and that the mortgage terms were incorrectly applied due to the FI’s inadequate diligence in property demarcation. Alleging wrongful possession by the respondent FI, the appellant argued that this overlap with the mortgaged plot stemmed from mistaken identity rather than any legitimate claim against their property. Nonetheless, the DRT found the appellant's evidence insufficient, affirming that the mortgaged area was distinctly separated by boundaries and bore no ownership connection to the appellant's portion.
The respondent FI countered that the appellant's claims were unsubstantiated and failed to demonstrate any material error in the mortgage or auction proceedings. They asserted that the borrower’s plot was indeed mortgaged per due procedure, and due to loan default, the FI had initiated possession under the SARFAESI Act after classifying the account as a Non-Performing Asset. The Tribunal noted the clear boundary differences between the properties of the appellant and the borrowers, finding no overlapping claims of ownership. Thus, it upheld the legality of the FI’s actions, leading to the dismissal of the appellant’s appeal and affirming the auction scheduled for 05.08.2024.
Mr. Rakesh Malhotra, Advocate represented the Appellant.
Mr. Manubhav Anand, Advocate appeared for Respondent No. 1.
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