In the case of Gyanesh Kumar Sharma and Anr. v. Reserve Bank of India and Ors. Rajasthan High Court stayed the transfer of possession and issued a notice to Muthoot Homefin (India) Limited (“Respondent”) which is a non-banking financial company which had tried to sell and auction the property of Gyanesh Kumar Sharma (“Petitioner”) during the lockdown triggered by the COVID-19 pandemic in India. The background of the case is that, the Petitioner had secured a home loan of Rs 26, 52,992 from Muthoot Homefin (India) Limited. In July 2019, the loan account was declared as a Non-Performing Asset.
Muthoot Homefin initiated proceedings under the SARFAESI Act proceedings by issuing a notice to the defaulter (Petitioner). The Petitioner raised an objection that Muthoot Homefin (India) Limited had attempted to sell and auction the property in the midst of COVID-19 lockdown, which is clearly in violation of the lockdown guidelines provided by the Reserve Bank of India’s moratorium dated 27.03.2020 under the SARFAESI Act.
On 20.03.20, the Petitioner approached the Respondent for settling housing loan account and offered to pay Rs. 20,00,000 (Rupees Twenty Lac) in two instalments for the Purpose of settlement. It was contented by the Petitioner that; the Respondent informed the Petitioner on 15.04.2020 that auction of secured asset was scheduled on 28.04.20 and it also needed to be rescheduled according to the declaration of the Government of India, taking into the account the lock-down. The Petitioner by quoting the communication between the Respondent on 11.05.2020 said that an auction of the property was supposed to take place on 28.04.2020 but they didn’t receive the expected bid in any form. Then, Petitioner was also informed that Respondent’s authorized officer received a proposal regarding the purchase of property for which the Petitioner was required to pay an amount of Rs 28,50,000/- It was also mentioned that if the Petitioner would fail to pay the amount within the given period, the secured asset would be sold to the third party for the same amount.
The Petitioner submitted that “on one hand, offer of the petitioners has not been considered and on the other hand, the property of the petitioners is being transferred to some buyer in very unusual manner.” The Rajasthan High Court passed an Order dated 29.05.2020 in favour of Petitioner by restraining the Respondent to transfer the possession of the property in question and issued a notice of stay application returnable by 23.06.2020.