Disposed

Icici Bank Ltd. v. a Chittibabu and others

DRAT6 Jul 2023REGULAR APPEAL/46/2013

Case brief

AI extract

What is this about?

The Tribunal allowed Respondents to file a Securitisation Application against a Possession Notice, noting lack of valid security interest in certain properties due to prior sale deeds. The Appellant argued partial validity. This Court confirmed setting aside the Notice but granted liberty to issue a fresh notice for the extent not covered by prior sale deeds.

What did the court decide?

Liberty given to Appellant to issue fresh Notice under Section 13(4) of SARFAESI Act, 2002 for 27468 sq. ft. of land not covered by earlier sale deeds.

Icici Bank Ltd. versus a Chittibabu and others — Contract and Commercial Disputes | DRAT (2023)

¶1

RA (SA) 46/2013

¶2

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

¶3

Dated the 6^th of July, 2023

¶4

PRESENT: Hon’ble Mr. Justice S. Ravi Kumar CHAIRPERSON

¶5

RA (SA) 46/2013

¶6

[SA 161/2012 on the file of DRT-III, Chennai]

¶7

Between

¶8

The Authorised Officer, ICICI Bank Ltd., ICII Bank Towers –RMAG, SP-24, South Phase, 4^th Floor, West Wing, Ambattur Industrial Estate, Ambattur, Chennai – 600 058.

¶9

……Appellant

¶10

And

¶11

A. Chittibabau, S/o (Late) D. Arvamudharn, Old No.5, New No.37, Sournambigai Street, Kodambakkam, Chennai – 600 024.

¶12

C. Gopinath, S/o A. Chittibabu, Old No.5, New No.37, Sournambigai Street, Kodambakkam,

¶13

Chennai – 600 024.

¶14

¶15

RA (SA) 46/2013

¶16

M/s. Jakshan Rubbers, P.O. Pullikkal, Malappuram District, Kerala.

¶17

C. Kunhi Maideen (since deceased) Pattancherry House, Nallur P.O., Feroke, Calicut – 673 631, Kerala.

¶18

4(a). Mr. Jhamshad, Pattanchery House, Nallur P.O., Feroke, Calicut – 673 631, Kerala.

¶19

D. Palani Chettiar, S/o Dharmalinga Chettiar, No.3/43, Vaniar Street, Seneer Kuppam, Poonamallee, Chennai – 600 056.

¶20

….. Respondents

¶21

Counsel for Appellant : Mr. S. Suresh for M/s. T. Srinivasaraghavan & Associates Counsel for R1 and R2 : Mr. B. Thilak Narayanan for Mr. K. Srinivasan

RA (SA) 46/2013

ORDER

This Appeal is preferred against Order dated

¶26

18.02.2013 in SA 161/2012 of DRT-III, Chennai.

¶27

Brief facts leading to this Appeal are as follows:-

¶28

Respondents 1 and 2 filed Securitisation Application questioning Possession Notice dated 16.02.2012 on the ground that there is no valid security interest created in respect of Schedule properties, and that Respondents 1 & 2 are owners of Scheduled properties, having purchased under registered documents, therefore, mortgage created over those properties cannot hold good, because owners have no right of interest in the properties at the time of mortgage.

¶29

Bank opposed Securitisation Application, and on a consideration of contentions and rival contentions of both parties, Tribunal below allowed Securitisation Application by

¶30

¶31

RA (SA) 46/2013

¶32

setting aside Possession Notice dated 16.02.2012, and also ordered, restoration of possession in respect of 38659.5 sq. ft. to Respondents 1 and 2 herein; aggrieved by the same, Bank filed present Appeal.

¶33

Heard both sides.

¶34

Advocate for Appellant submitted Respondents 1 and 2 are third parties; Respondent 3 is a Borrower and Respondents 4 and 5 are the Guarantors, and during pendency of proceedings, Respondent No.4 died, and LR of deceased Respondent No.4 is added as Respondent No. 4(a) in Appeal Memorandum. It is further submitted, account was classified as NPA on 29.01.2008 and Notice under Section 13(2) of SARFAESI Act, 2002, is issued on 26.10.2009, and thereafter, Possession Notice under Section 13(4) of SARFAESI Act, 2002, is issued on 16.02.2012, through which symbolic possession is taken. It is submitted, total extent of mortgage is 51836 sq. ft., of land. He submitted, claim of Respondents 1 and 2, is covered by 4

¶35

¶36

RA (SA) 46/2013

¶37

Sale Deeds, and out of said 4 Sale Deeds, two Sale Deeds were subsequent to mortgage and two Sale Deeds are prior to mortgage. He further submitted, date of mortgage is 06.04.2006. He submitted, Tribunal below ought not have set aside entire Possession Notice, and ought to have permitted Bank, to proceed against the properties covered by two Sale Deeds, which are subsequent to mortgage.

¶38

On the other hand, Advocate for Respondents 1 and 2 submitted that Bank has not produced any document showing the mortgage, and now they cannot be permitted to contend that they have got mortgage over entire extent of 51836 sq. ft. He submitted that without producing any document, Bank is not entitled to proceed against properties. He further submitted that Respondents 1 and 2 have no knowledge about loan and etc., and they came to know only after issuance of Notice under Section 13(4) of SARFAESI Act, 2002. It is submitted, Tribunal below rightly set aside

¶39

¶40

RA (SA) 46/2013

¶41

Possession Notice dated 16.02.2012, and that there are no grounds to interfere with Order dated 18.02.2013.

¶42

I have perused the material papers including impugned Order dated 18.02.2013.

¶43

It is not in dispute that the property originally belonged to Respondent No.5. It is the case of Bank that mortgage is created to an extent of 51836 sq. ft., out of which, an extent of 38659.5 sq. ft., is covered by 4 Sale Deeds, out of which, an extent of 24368 sq. ft. is covered by two Sale Deeds dated 13.05.1999 and 24.02.2005, which are prior to mortgage, and remaining extent of 14291.5 sq. ft., is covered by two Sale Deeds dated 07.05.2009, which are subsequent to mortgage.

¶44

Out of 38659.5 sq ft., covered by four Sale Deeds, an extent of 14291.5 sq. ft, covering two Sale Deeds executed by Borrower and Guarantors, subsequent to mortgage. Bank cannot proceed against an extent of 24368 sq. ft., in respect

¶45

¶46

RA (SA) 46/2013

¶47

of which, Sale Deeds are executed even before creating mortgage in the year 2006, because those properties are not available for mortgage. So, Bank can proceed against 27468 sq. ft. (i.e. 51836 sq. ft. minus 24368 sq. ft.)

¶48

Tribunal below, ought to have examined these aspects, while setting aside Possession Notice dated 16.02.2012.

¶49

Advocate for Respondents 1 and 2 contended that Bank has not produced any documents, showing the mortgage, but same cannot be accepted, because the scope of enquiry for Application filed under Section 17 of SARFAESI Act, 2002, is very limited, and grounds available for aggrieved party is to challenge the Notice issued under Section 13(4) of SARFAES Act, 2002, are regarding service, affixture and publication.

¶50

¶51

RA (SA) 46/2013

¶52

In view of the same, without going into the other aspects, while confirming the Order of Tribunal below for setting aside Possession Notice dated 16.02.2012, liberty is given Appellant Bank to issue a fresh Notice under Section 13(4) of SARFAESI Act, 2002, for the extent of land referred to above, i.e., 27468 sq. ft, (i.e. 51836 sq. ft. minus 24368 sq. ft.).

¶53

In the result: Appeal RA (SA) 46/2013 is disposed of. Both parties shall bear their own costs. All pending IAs, if any, stand closed.

¶54

[Dictated to Athistamani, PS, in open court, transcribed by her, corrected and signed by me, this 6^th of July, 2023]

¶55

[ Justice S. Ravi Kumar] CHAIRPERSON

RA (SA) 46/2013

Before mortgage

Sale deed dated 13.05.1999	11713	sq ft
Sale deed dated 24.02.2005	12655	sq. ft

¶60

Date of mortgage 01.10.2001 and total extent of mortgage 51836 sq. ft. (page 96)

¶61

After mortgage

¶62

Sale deed dated 07.05.2009 7546	.5 sq. ft.	9 {page 127 c]
Sale deed dated 07.05.2009 6745	sq. ft.	[ page 157 c}

¶63

Total property extent of R1 and R2 28659.5 sq. ft. (final order)

¶64

¶65

RA (SA) 46/2013

¶66

Icici Bank Ltd. v. a Chittibabu and others

Case brief

What is this about?

What did the court decide?

Icici Bank Ltd. v. a Chittibabu and others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

All orders in this case

Similar cases

S.Selvaraj versus Corporation Bank

R Ponnusamy versus South Indian Bank

James C J versus Hdb Financial Services Ltd.

Alfred Sunil M versus Housing Development Finance Corporation Ltd.

Ms Shree Cashewes versus Bharat Cooperative Bank Mumbai Limited

S Shanmugam Priya and K Sakthivel versus Bank of Baroda