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2021 Supreme(UK) 466
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Manoj Kumar Tiwari, J.
Rekha Devi - Appellant
Versus
Punjab National Bank Housing Finance Ltd. & Ors. - Respondents
Writ Petition (M/S) No. 2654 of 2021
Decided On : 13-12-2021
Vinay Kumar, Advocate
The court addressed the non-functioning of the Debts Recovery Tribunal and the liability of the insurance company in the context of the SARFAESI Act.
Headnote:
SARFAESI Act - Loan Repayment - Insurance Liability
Fact of the Case:
The petitioner's husband, employed with ONGC, took a housing loan which was insured. After his passing, the bank initiated proceedings under SARFAESI Act due to outstanding loan amount. The petitioner argued that the non-functioning of the Debts Recovery Tribunal made the SARFAESI Act remedy illusory and that the insurance company should be liable for the loan repayment.
Finding of the Court:
The court disposed of the writ petition with directions for the petitioner to make a representation to the insurance company, and for the Competent Authority to pass an appropriate order within two weeks. It also ordered a temporary halt to the auction sale of the secured asset.
Issues: Non-functioning of Debts Recovery Tribunal, Liability of Insurance Company for Loan Repayment
Ratio Decidendi: The court considered the non-functioning of the Debts Recovery Tribunal and the insurance company's liability in the context of the SARFAESI Act.
Final Decision: The court issued directions for the petitioner and temporarily halted the auction sale of the secured asset.
JUDGMENT
Manoj Kumar Tiwari, J. - Petitioner’s husband, who was employed with ONGC as Chief Security Guard, took a housing loan from Punjab National Bank Housing Finance Ltd. in the year 2011.
2. According to the petitioner, the said loan was insured with TATA AIG Insurance Ltd., Dehradun. Petitioner’s husband has passed away in the month of May, 2021. According to the petitioner, against the loan of Rs. 15.15 lakhs taken by petitioner’s husband, he had repaid about Rs. 10 lakhs, during his lifetime.
3. Since the loan amount still remains to be paid, therefore, Punjab National Bank Housing Finance Ltd. has initiated proceedings under SARFAESI Act against the secured asset.
4. It is the contention of learned counsel for the petitioner that Debts Recovery Tribunal, Dehradun is not functioning on account of non-availability of Presiding Officer since last several months, therefore, the remedy of Section 17 of SARFAESI Act has become illusory in the case of the petitioner. He further submits that since the loan was insured by TATA AIG Insurance Ltd., therefore, upon death of petitioner’s husband, the liability to repay the loan rests upon TATA AIG Insurance Ltd.
5. Since the secured asset has been put for e-public auction scheduled to be held on 20.12.2021, therefore, having regard to the peculiar facts of the case, the writ petition is disposed of with the following directions:-
I. Petitioner shall be at liberty to make representation to TATA AIG Insurance Ltd. (respondent no. 3), within 48 hours.
II. If such representation is made, the Competent Authority in TATA AIG Insurance Ltd shall look into the matter and pass appropriate order, in accordance with law, on petitioner’s representation, within two weeks from its receipt. Copy of the order passed on petitioner’s representation shall also be communicated to Branch Manager, Punjab National Bank Housing Finance Ltd.
III. For a period of two weeks’, the auction sale of the secured asset, if made, shall not be confirmed.
6. Let a certified copy of this order be issued today itself.
