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The Court was told that Muthoot Homefin conducted the property auction on April 28. A sale notice was issued on May 11 when the auction drew no bids, in violation of the lockdown guidelines and the RBI's moratorium.
The Rajasthan High Court on Friday granted interim relief to a petitioner who had raised a grievance that Muthoot Homefin (India) Limited had tried to auction and sell his property amid the COVID-19 lockdown, in violation of the lockdown guidelines, the RBI's moratorium and the SARFAESI Act.
The petitioner had obtained a home loan of Rs 26,52,992 from Muthoot Homefin, a non-banking financial company. In July 2019, the loan account was declared a Non-Performing Asset, which the petitioner contends was in violation of Reserve Bank of India (RBI) guidelines.
Whereas the NPA classification was stated to have been withdrawn in later that year, after the petitioner made a deposit of Rs 99,500 in October, Muthoot Homefin later initiated SARFAESI proceedings by issuing a notice, which the petitioner asserts is liable to be struck down.
An email was also sent by the petitioner, requesting that the loan be settled with a one-time payment of Rs 20 lakhs, which drew no response from the Bank
Further, in March this year, an auction notice with respect to the petitioner's property was published wherein the auction date was scheduled for April 28.
In April, the petitioner emailed the Muthoot Homefin, pointing out that the RBI had issued a circular on March 27 wherein it imposed a moratorium on the payment of loan installments. Inter alia, the petitioner also requested that the auction be postponed until further orders from the Government or the RBI.
However, Muthoot Homefin is stated to have conducted a "physical auction" on the scheduled date of April 28, amid the lockdown. As the auction did not receive any bids, a fresh notice of sale was issued on May 11. The petitioner was informed via email that an offer to buy the property at Rs 28,50,000 was also received.
Terming the same a blatant misuse of power, the petitioner submitted before the High Court that the company's actions are arbitrary, violative of the SARFAESI, against the RBI's March 27 circular as well as Government guidelines amid the lockdown. It is pointed out that the lockdown guidelines had effectively postponed auctions and sale of immovable property.
In view of these submissions, Justice Ashok Kumar Gaur proceeded to issue notice in the matter returnable by June 23.
The petition was filed through Advocates Aditya Jain and Neha Gyamlani.