Chennai: The Debt Recovery Tribunal came to the rescue of the legal heirs of a deceased couple who died in an accident and whose mortgaged property was sold in an auction after their death by a non-banking financial institution for default of payments due.
The couple’s insurance policy was linked to the account despite which the NBFC auctioned their property. The DRT set aside the sale and directed the financial institution to hand over the possession of the property to the legal heirs, besides a compensation of Rs 10 lakh each to them.
“The present case is a classic example of how an authorised officer, who has been entrusted with power to enforce the statute, misused the powers and deliberately acted in contravention of the provisions of the statute”, observed N.V.Badarinath, the presiding officer of the Debts Recovery Tribunal, Chennai while allowing a Securitisation Application (SA) filed by K. Jayabalan, K. Gajendran and Sundaralingam Jay, represented by their power of attorney Irene Manohar.
According to Irene Manohar, the applicants were the sons and daughter of the deceased borrowers K. Kanagarathinam and Mageswari and she was their close relative and guarantor to the loan. The deceased borrowers availed a housing loan of Rs 13 lakh from National Trust Housing Finance Limited (NTHFL) and both of them died in a road accident that took place at Ulundurpet on April 26, 2009. Since the applicants were residing abroad, they had given power of attorney to her to initiate the present action.
After their death, she informed the same to the NTHFL to close the loan account as the loan was insured with the insurance company and the policy was life-linked.
However, the NTHFL invoked provisions of SARFAESI Act, and illegally sold the property through auction. The death certificates of the deceased borrowers furnished by Irene along with the letter dated May 5, 2009.
The NTHFL had admitted that they came to know about their death on August 27, 2009. Therefore, it was clear that by August 28, 2009, the NTHFL had clear knowledge about the death of the deceased borrowers well before December 17, 2009 (when possession notice was issued). “The Tribunal has no hesitation to hold that all the measures/action taken by NTHFL right from the stage of the demand notice are illegal and unsustainable under law”, the DRT added.
