DRT, Mortgage, Lender, Orbit Venture Developers, Deed of Mortgage, Orbit Ventures Developers and Ors, Axis Finance Limited

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The Debt Recovery Tribunal, Bench – II, Mumbai has cleared Axis Finance Limited (AFL) to proceed with the sale of apartments (“Subject Flat”) to potential buyers.

Background

Mr. Rajen Dhruv and Mr. Hiren Dhruv promoters of Orbit Venture Developers (“DVO“) were keen to redevelop Oshiwara Adarsh ​​CHS Ltd and in order to free up the 20 properties at Oshiwara Adarsh ​​CHS Ltd requested the assistance of the applicant namely J71 Properties & Pictures Pvt Ltd and Amarjeet Jitendra Shukla (“Candidates“).

Mr. Rajen Dhruv and Mr. Hiren Dhruv entered into an undated Memorandum of Understanding, in which it was agreed that Mr. Rajen Dhruv and Mr. Hiren Dhruv will allocate an area of ​​5,000 square feet in the new building to be constructed by them subject to granting of redevelopment rights. Following the signing of the development agreement dated 16e August 2007, the award letter was issued by OVD, indicating that the flat numbers. 3601 and 3602 are assigned to Plaintiffs (“Topic Apartments“).

Further, OVD through Mr. Rajen Dhruv and Mr. Hiren Dhruv in an attempt to refinance the loan approached AFL, i.e. the lender, who provided a term loan in the amount of Rs.130 crores to OVD i.e. the borrower. Subsequently, deed of mortgage (“IOM“) was executed between OVD and AFL, where, among other things, 12 unsold apartments (including the apartments in question) as well as the parking spaces concerned in the project, as well as the corresponding mortgage on the parking spaces in favor of AFL to secure the loan. OVD failed to perform its obligation under IOM, so AFL classified OVD’s account as a non-performing asset (NPA) and issued public notices regarding the apartments located in the costume property.

In accordance with the provision of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Act 2002, AFL took possession of the apartment in question with the aim of recovering its funds from the sale of the apartments in question. In accordance with the taking possession of the apartments concerned and in accordance with the law, the AFL issued a notice of sale dated August 06, 2022 and scheduled an online auction on September 08, 2022.

In order to stop the sale of the Subject Apartments and claiming an illegal right over the Subject Apartments, the Claimant filed a Securitization Application with the DRT requesting the suspension of the sale of the Subject Apartments. The plaintiff seized DRT to request the suspension of the auction. The subject was heard at length by the DRT, in which the AFL confirmed that the plaintiff is not a bona fide apartment buyer and did not produce any documents to show his rights to said apartments. In view of the foregoing, the Honorable DRT has not issued any provisional order to stay the sale by E-auction, thus allowing the AFL to continue the sale of Subject Flat.

Case: J71 Properties & Pictures Pvt Ltd and Anr. Vs Developers Orbit Ventures and Ors.

Securitization application no. 108 OF 2022

Axis Finance Limited was represented by Mr. Rajesh Nagory a/w Mr. Nishit Dhruva, Ms. Khushbu Chhajed, Ms. Niyati Merchant, Mr. Yash Dhruva.

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