Riju Mukherjee And Another vs. The District Magistrate, Gurugram And Another

Facts

The petitioners, Riju Mukherjee and another, availed housing loans totaling `25,75,000/- from respondent No. 2, secured by title deeds of a plot. Due to irregular payments, their loan accounts were classified as Non-Performing Assets (NPA) on 15.05.2017. Notices under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the Act) were issued on 15.05.2017 and 08.08.2017. The petitioners responded, refuting the claims. They approached the Civil Court, but their suit was dismissed as not maintainable on 05.02.2020. Respondent No. 2 issued a notice under Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 on 08.10.2018. A Lok Adalat mediation failed as respondent No. 2 insisted on full payment. The petitioners also challenge notices under Rule 8(1) and 8(2) and a notice under Section 14 of the Act issued by respondent No. 1.

Held

The Court held that the petitioners had not made out a prima facie case for relief. The reasoning was that the petitioners, having borrowed the loan, had a duty to service it. The Court noted that the petitioners had not made any payments since the initiation of proceedings under Section 13(2) of the Act on 15.05.2017. Therefore, the Court found no merit in the plea for relief based on sympathy. The Court dismissed the Writ Petition in limine. No specific issue was left undecided. The operative direction was the dismissal of the petition.

Key Issues

1. Whether the petitioners have made out a prima facie case for relief from this Court, considering their consistent default in loan repayment since 15.05.2017, despite notices and attempts at settlement. The petitioners argued that business losses due to demonetization and the implementation of GST have impacted their ability to repay the loan. They contended that if granted sufficient time, they would repay the loan, having made a proposal for an One-Time Settlement (OTS). They sought to quash the notices issued under Section 13(2) and Section 14 of the Act, and Rules 8(1) and 8(2) of the Rules. The respondents did not explicitly present arguments in the judgment. However, the court's dismissal implies a rejection of the petitioners' plea for relief based on their inability to service the loan and the lack of a prima facie case.