Dismissed

Sri Mampilly Joseph v. LIC Housing Finance Ltd. & Anr.

DRAT5 Nov 2024REGULAR APPEAL/158/2017

Case brief

AI extract

What is this about?

This appeal challenged the dismissal of an application under Section 14 of the SARFAESI Act seeking possession of property. The tribunal held that the appellant could not re-agitate the issue of non-service of notices as it was already finally decided in a prior appeal where no further appeal was filed, barring the matter under principles of res judicata and estoppel.

What did the court decide?

Appeal R.A.(S.A) 158/2017 dismissed; parties bear their own costs; pending IAs closed.

Sri Mampilly Joseph versus LIC Housing Finance… — Contract and Commercial Disputes | DRAT (2024)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 5^th of November, 2024

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PRESENT: Hon’ble Mr. Justice G. Chandrasekharan CHAIRPERSON

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R.A:158/2017

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(SA 139/2014 on the file of DRT, Bangalore)

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Between

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Sri Mampilly Joseph, S/o. Mampilly, Residing at Flat No. G-1, Ground Floor, Kavitha Residency, Maruthisevanagar Layout, Bangalore.

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… Appellant

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And

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The Authorised Officer, LIC Housing Finance Ltd., No.15/1, Hayes Center, Bangalore – 560 025

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… Respondents

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Counsel for Appellant : Mr. T. R. Sundaram Counsel for Respondent : Mr. Imayavaramban for M/s. Ramalingam and Associates.

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ORDER

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This Appeal is directed against the Order of Learned

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Presiding Officer, DRT, Bangalore in SA 139/2014 dated 27.08.2014.

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Appellant filed Application under Section 17(1) of Secutisation and Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002 (hereinafter called SARFAESI Act, 2002) to set aside the order passed by the XI Additional Chief Metropolitan Magistrate, Bangalore in C. Misc No. 46/2011 dated 27.07.2011 passed under Section 14 of SARFAESI Act, 2002.

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3. Learned Counsel for Appellant submitted that there

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was no proper service of Notice under Section 13(2) of SARFAESI Act, 2002. Rule 3 of the Security Interest (Enforcement) Rules, 2002, (hereinafter referred to as Enforcement Rules, 2002) requires the Demand Notice under Section 13(2) of SARFAESI Act, 2002, shall be

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delivered personally, or through registered post with acknowledgement due, or by Speed Post or by courier or by any other means of transmission of documents like fax message or electronic mail service; If there is reason to believe that the borrower is avoiding service of the notice, or

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for any other reason, service cannot be made for the aforesaid, the service shall be effected by affixing copy of notice on the outer door or some other conspicuous part of the house or building in which the borrower or his agent ordinarily resides or carries on business or personally works for gain and also by publishing the contents of the demand notice in two leading newspapers, one in vernacular language, having sufficient circulation in that locality.

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4. It is his further submission that SA 47/2011 was filed by Appellant stating that Section 13(2) Notice was not properly served, especially, service by affixture was not effected. Tribunal below, in its Order dated 19.06.2012 in SA 47/2011, recorded that the document Nos.1 and 2

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indicate that the notice was sent to Appellant by RPAD and

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the same came to be returned with postal endorsement “left/returned to sender” . Paper publications of Section 13(2) Notice are document Nos. 3 and 4. No documents have been filed to show the service of notice by affixture.

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5. The challenge to Possession Notice dated 18.12.2010 in SA 47/2011 came to be dismissed by DRT, on 19.06.2012. Immediately after dismissal of SA 47/2011, the Respondent Institution approached under Section 14 of SARFAESI Act, 2002, before XI Additional Chief Metropolitan Magistrate at Bangalore, to take possession. Learned XI Additional Chief Metropolitan Magistrate passed Order on 27.07.2011 directing the Respondent Institution to take possession of Schedule property with the help of Police. Challenging the said Order, SA 139/2014 was filed by the Appellant

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6. It is the contention of the Learned Counsel for the Appellant that the grounds taken in SA 139/2014 are that, there is no proper classification of loan account as NonPerforming Asset (NPA); no proper service of Demand Notice

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and Possession Notice, and that order passed by Learned XI Additional Chief Metropolitan Magistrate, Bangalore, in C. Misc. 46/2011 dated 27.07.2011, under Section 14 of SARFAESI Act, 2002, is without jurisdiction. However, without considering the grounds taken, SA 139/2014 was dismissed. Therefore, this Appeal is filed.

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7. In response to his submissions, Learned Counsel for Respondent Institution submitted that, SA 47/2011 filed against issuance of Section 13(4) Notice was dismissed by DRT, and no Appeal was filed as against order of dismissal, therefore, the issue of non-service of 13(2) Notice, cannot be agitated again, once it was considered and decided in SA 47/2011 by the Tribunal. Learned XI Additional Chief Metropolitan Magistrate has followed the procedure established by law while passing Order under Section 14 of the SARFAESI Act, 2002. Hence, there is no irregularity or illegality, and the defects if any, is only curable in nature, and it was also considered by Learned Presiding Officer,

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DRT, Bangalore, therefore, prayed for dismissal of this

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Appeal.

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8. Considered rival submissions and peruse records.

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9. As seen from records, SA 47/2011 was filed alleging

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non service of Demand Notice issued under Section 13(2)

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and Possession Notice issued under Section 13(4) of SARFAESI Act, 2002. Tribunal below, considering the contentions and rival contentions of the parties and considering the records produced before it, held that, there was proper service of Section 13(2) Demand Notice and 13(4) Possession Notice, and SA 47/2011 came be dismissed on 19.06.2012.

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10. Admittedly, there was no Appeal against the order of said dismissal. Therefore, the order has become final.

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11. As contended by Learned Counsel for Respondent

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Institution that when the issue of service of notice has

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become final, it cannot be re-agitated again in Application in SA 139/2014 and in this Appeal.

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12. It is seen from the impugned order in SA 139/2014, the issue of classification of loan account as NPA, nonservice of Demand Notice under Section 13(2) and Possessions Notice under Section 13(4) of SARFAESI Act, 2002, had been dealt with by Learned Presiding Officer, and the same have been rejected as it hit by the principles of estoppels and res judicata . Learned Presiding Officer also found that Learned Magistrate has taken notice of the issue of service of Demand Notice and Possession Notice, and passed the order.

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13. In view of above discussions and observations, I am of the considered view that, Order passed by Learned Presiding Officer in SA 139/2014 does not suffer from any irregularity

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and illegality. Learned Counsel for Appellant was not able to show any specific case of illegality or irregularity in the Order passed by Learned XI Additional Chief Metropolitan

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Magistrate. Thus, this Tribunal finds that no valid grounds are made out to interfere with the order of Tribunal below

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and there is no merits in this Appeal and is liable to be dismissed.

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14. In the result: Appeal R.A .(S.A) :158/2017 is dismissed.

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Both parties shall bear their own costs. All pending IAs, if any, stand closed.

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[Dictated to Athistamani, PS, in open court, transcribed by her, corrected and signed by me this 5^th of November, 2024]

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