Measures taken by Secured Creditor cannot be questioned on the basis of Sale Agreement, it can only be questioned if procedure is not duly followed – V.N. Ashok Kumar v. The Authorised Officer, Tata Capital Housing Finance Ltd. and Ors. – DRAT Chennai
Appellant (third party buyer of a mortgaged property) made payment to Financial Institution amount to valid discharge as per Section13(5) of SARFAESI Act, 2002.
DRAT held that:
(i) As per Section 13(5) and 13(4)(d) of SARFAESI, where a person acquire secured asset from Borrower and from him some money is due to Borrower, the Secured Creditor require said person by Notice in writing to pay said amount. So, it is mandatory that such request should be in writing and Appellant did not produce any such Notice issued by Secured Creditor, further there is no pleading in the SA that Secured Creditor requested Appellant by Notice in writing to pay the instalments.
(ii) Sale Agreement in his favour is subsequent to mortgage. So, any rights under Sale Agreement are subject to mortgage in favour of Financial Institution.
