Brief Background
The applicants approached the Debts Recovery Tribunal-I, Delhi, seeking protection against the proposed physical possession of a residential property by IIFL Home Finance Ltd. The applicants claimed ownership of the property through a registered sale deed dated 14 May 2012 and contended that they had no connection with the loan transaction relied upon by the financial institution.
The respondent financial institution opposed the application, asserting that the property had been mortgaged in its favour in 2021 and that SARFAESI proceedings had been initiated after the borrower defaulted in repayment of the loan.
Order Passed by the Tribunal
After hearing both sides and examining the record, the Tribunal noted that the applicants were claiming ownership on the basis of a registered sale deed executed in 2012, whereas the respondent financial institution claimed rights over the property on the basis of a mortgage created in 2021.
The Tribunal observed that a prima facie case existed in favour of the applicants and that the balance of convenience also supported grant of interim protection. Accordingly, the Tribunal restrained IIFL Home Finance Ltd. and the Court Receiver from taking physical possession of the property until the next date of hearing.
Significance of the Order
This order highlights the Tribunal’s power to grant interim protection where competing claims over ownership and mortgage rights require detailed examination. The decision ensures that possession of the property is preserved pending adjudication of the parties’ rights.
The ruling also reinforces the principle that coercive measures under the SARFAESI Act may be temporarily restrained where a prima facie case and balance of convenience exist in favour of the applicant.