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Manurag Nangia & Anr vs Axis Bank Limited & Ors on 7 September, 2022

Author: Najmi Waziri

Bench: Najmi Waziri

                              $~19
                              *      IN THE HIGH COURT OF DELHI AT NEW DELHI
                              +      W.P.(C) 13021/2022 & CM APPL. 39425/2022
                                     MANURAG NANGIA & ANR.                                 ..... Petitioners
                                                         Through:     Mr. Nishant Das, Mr. Pramod Rath
                                                                      and Ms. Aatrayi Das, Advocates.

                                                         versus

                                     AXIS BANK LIMITED & ORS.                             ..... Respondents
                                                         Through:

                                     CORAM:
                                     HON'BLE MR. JUSTICE NAJMI WAZIRI
                                     HON'BLE MR. JUSTICE VIKAS MAHAJAN
                                                       ORDER

% 07.09.2022 The hearing has been conducted through hybrid mode (physical and virtual hearing).

CM APPL. 39426/2022 (Exemption)

1. Allowed, subject to all just exceptions.

2. The application stands disposed-off.

W.P.(C) 13021/2022 & CM APPL. 39425/2022 (stay)

3. Issue notice through ordinary process, Speed Post, approved courier, WhatsApp, Signal, SMS, e-mail, through other viable modes of electronic service, through counsel as well, returnable on 11.10.2022.

4. The petitioners had taken a loan from the respondent no. 1/Bank. They had agreed to purchase an apartment promised to be delivered by respondent no. 2/property developer. In this regard, Tripartite Agreement and Builder Buyer Agreement have been shown to the Signature Not Verified Digitally Signed By:KAMLESH KUMAR Signing Date:20.09.2022 11:50:52 court. Let them be brought on record. The loan was to be released as per the Construction Linked Plan. The banker, however, did not release the monies as per the Plan, but in mere two installments thereby jeopardizing the petitioners' owned security apropos the loan amount. The installments payable by the petitioners were to be made at 11 tranches as per the Payment Plan annexed to the Builder Buyer Agreement. The property is nowhere near completion, let alone delivery of the same to the petitioners. Respondent no. 2 who is the beneficiary of the loan is facing insolvency proceedings but the bank has gone ahead for seeking the monies from the petitioners. Evidently, the petitioners had no control over the release or use of the monies as was envisaged in the Tripartite Agreement. It was for the banker to have ensured by verification at the project site that the building was actually being constructed as promised by the property developer. Furthermore, these transactions happened in the year 2015 much after the issuance of the Circular by the Reserve Bank of India on 03.09.2013 calling upon banks to finance housing projects which are construction-linked. The prudence in the said advice is that the constructed assets itself would form a security against defaults in repayments. Evidently, the bank did not assess the stages of development but now seeks to recover an outstanding amount from the petitioners. This is prima facie unfair.

5. The learned counsel for the petitioners refers to the decision of this court in Hridesh Kumar Pathak vs. Bank of Maharashtra in W.P. (C) 6774/2021 dated 20.07.2021, wherein in similar circumstances, the court has stayed recovery proceedings.

6. In view of the above, recovery proceedings against the petitioners pending before the DRT-I, Delhi shall be stayed, till further orders.

NAJMI WAZIRI, J VIKAS MAHAJAN, J SEPTEMBER 7, 2022 RW Signature Not Verified Digitally Signed By:KAMLESH KUMAR Signing Date:20.09.2022 11:50:52