Vanshika Singh & Anr Vs Punjab & Sind Bank (DRT Delhi)
The securitisation application was filed under Section 17(1) of the SARFAESI Act, 2002 challenging the measures initiated by the respondent bank in respect of a property located at D-362, D-Block, Upper Second Floor, Gali No. 13 & 14, Laxmi Nagar, Delhi. The applicants sought a declaration that the actions of the bank were illegal and arbitrary and requested that the proceedings be quashed.
According to the applicants, they had purchased the flat measuring approximately 43 square yards on 1 January 2016 through a registered sale deed from Rajesh Sandev. After purchase, the property was rented to a tenant through a registered rent agreement dated 8 January 2016. The applicants stated that they came to know about the bank’s proceedings only when a Receiver appointed by the Chief Metropolitan Magistrate visited the property to take possession under the SARFAESI Act. Upon enquiry, they learned that the property had been mortgaged by Rajesh Sandev to the respondent bank on 8 July 2015 for a loan of ₹26 lakh sanctioned to him and his firm.
The applicants contended that they were bona fide purchasers for value and had no knowledge of the mortgage at the time of purchase. They alleged that they were not borrowers or guarantors in the loan transaction and had never received notices under Sections 13(2) or 13(4) of the SARFAESI Act. According to them, the bank had not followed the procedure prescribed under the Act, including the requirement to mention the date on which the account was classified as a non-performing asset in the notice issued under Section 13(2). They also argued that the bank had waited an unusually long period before initiating action under the SARFAESI Act and alleged collusion between bank officials and the borrower.
