In an interesting case, a petitioner whose property was mortgaged by the India Bulls Housing Finance Ltd, has moved the Gujarat High Court challenging the provisions of the Securitisationand Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
By this they have challenged the power conferred to the central government to declare an institution as a financial institution.
Jyoti Gajjar and her husband Kamlesh Gajjar, resident of Surat have moved the Gujarat high court challenging the said provisions of Securitisation Act 2002.
They have alleged that the central government had by a notification dated September 19, 2007, declared India Bulls Housing Finance Ltd a financial institution which is ultra vires to the constitution. They have further alleged that provisions of the securitisation Act gives uncontrolled powers to the Centre which gives rise to discriminatorydecisions.
The couple had taken a loan of Rs8.25 lakh from the company which was to be repaid in 120 installments of Rs14,296. The couple had had paid about Rs6.58 lakh but the company meanwhile sealed the property.
The case is pending before the DRT. The couple had challenged the sudden increase in the amount of installment and exorbitant rate of interest charged by the company in violation of the RBI guidelines.
In the petition filed by the couple through their advocate Massom Shah and Vishwas Shah, they have stated that notification issued by the central government declaring the company a financial institution is illegal and without authority of law as Narasimham Committee and Andhyarujina Committee never had an occasion to study the company.
The Gujarat high court after hearing the argument by the petitioners have admitted the case and issued notices to central government, India Bulls Housing Financial Ltd and RBI. However, the court has further stated that as the provisions of the Act is challenged, the court has issued notice to the attorney general.
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