Home Loan Dispute: Court Upholds Pre-Deposit Mandate in SARFAESI Case.


08 October 2024 Sarfaesi >> Corporate Law  

In Veena Jain v/s City Union Bank Limited & Others., the petitioner, a borrower from the respondent bank, sought to challenge various orders related to SARFAESI proceedings under Articles 226 & 227 of the Constitution of India. The petition primarily concerned an order of the Debt Recovery Tribunal (DRT) and the Debt Recovery Appellate Tribunal (DRAT) which directed the petitioner to make a pre-deposit of 25% of the outstanding loan amount. 


 

 

The petitioner had taken a home loan from the bank but struggled to make monthly payments after November 2023, leading the bank to declare the loan Non-Performing Asset (NPA) in February 2024. The petitioner had made partial repayments and requested loan restructuring but was subjected to SARFAESI action. The main contention was that the bank illegally combined the petitioner’s home loan with her son’s business loan, thus inflating the pre-deposit requirement.

The court examined the legality of the loan amounts and the validity of the pre-deposit direction, finding that the bank’s documents supported the loan being secured for Rs.10 Crores, not just Rs.2.5 Crores. The court refrained from addressing the disputed facts and upheld the DRAT’s order, dismissing the petition without costs.


  Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002