Dismissed

Sanatan Dharam Mewat Educational Society and Others v. Punjab National Bank

DRT19 Dec 2022SA/234/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal-2, Chandigarh dismissed a Securitisation Application filed by an Educational Society against Punjab National Bank challenging a possession notice. The Tribunal held the application was premature and time-barred, noting the demand notice was received and possession had been taken previously. It rejected claims of Rule 8 violation, finding the applicant was aware of proceedin

What did the court decide?

The Securitisation Application was dismissed with costs.

Sanatan Dharam Mewat Educational Society and Others versus… — Company and Corporate | DRT (2022)

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DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK

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DATED THE 19^th DAY OF DECEMBER , 2022

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SECURITISATION APPLICATION NO.234/2022

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Sanatan Dharam Mewat Educational Society, having office at Delhi-Alwar State Highway, Village-Rawli, Tehsil Firozpur Jhirka, District Mewat, Haryana, through its Secretary/Authorised Signatory

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…..Applicant

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Versus

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Punjab National Bank, having its Branch at Main Branch, Fountain Chowk, Gurgaon, Haryana, through its Authorised Officer

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…..Respondent

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Argued by: Sh. Ravi Data counsel for the SA applicant Sh. R.S. Bhatia counsel for the respondent bank

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FINAL ORDER

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This Securitisation Application is under Section 17 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’ for brevity).

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In brief it is the case of applicant that the applicant was aggrieved by the possession notice dated 01.12.2022 with regard to the property in question, i.e. College land and building situated at Village Rawli, Tehsil, Ferozpur-Jhirka, District, Mewat, Haryana, on 20.12.2022; that there were more than 600 students in particular academic year; that respondent bank sanctioned some credit facilities vide letter dated 28.04.2011 which was subsequently enhanced vide letter dated 05.10.2011; that number of students got reduced subsequently; that applicant kept paying monthly interest; that blank cheques obtained from the applicant as security at the time of loan documentation were got dishonored and two criminal cases were instituted for commission of offence punishable under Section 138 of the Negotiable Instruments Act,1881; that enhanced rate of interest contrary to the terms was being charged; that the bank was charging interest more than 24%; that bank has debited

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SA/234/2022 SANATAN DHARAM MEWAT EDUCATIONAL SOCIETY AND OTHERS Vs PUNJAB NATIONAL BANK 2

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accounts with wrong figures; that sale notice dated 03.08.2015 was issued; that demand notice under Section 13 (2) of the Act was issued; that SA No. 411 of 2017 titled “ Sanatan Dharam Mewat Educational Society Vs PNB ” was instituted before the DRT-I, Chandigarh, which was subsequently dismissed being infructuous; that at present, more than 200 students were enrolled apart from other students studying in the applicant College; that there was also Examination Center in the College; that notice dated 01.12.2022 under Section 13(4) of the Act was simply pasted by the respondent bank which was a letter written by the respondent bank to the Superintendent of Police, Nuh, seeking Police help; that no notice was addressed or issued to the applicant intimating the order passed by the District Magistrate or the date of taking possession in the property in question; that applicant was informed by the Officials of the respondent bank that the bank had classified the accounts of the applicant as NPA despite receiving the monthly interest; that before classifying the account as NPA, the bank should have been served a notice to the applicant; that account could not be classified as NPA and the request was made to the bank to regularise the account, but to no avail.

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It was contended in reply to the SA that the present SA was barred by the principle of res judicata; that applicant failed to point out any defect in the notice of possession; that symbolic possession of the property was taken on 16.07.2013 and the present SA was filed on 14.12.2022 and thus, it was beyond limitation; that SA was premature as possession was yet to be taken; that loan account was declared as NPA on 09.05.2015 [09.05.2013]; that notice under Section 13(2) of the Act was issued on 09.05.2013; that notice was duly published in two newspapers, i.e. Statesman and Punjab Kesri on 20.07.2013; that sale could not take place earlier; that permission of the District Magistrate for physical possession was taken on 13.09.2015; that Term Loan-I of Rs.97 lacs was sanctioned on 29.04.2010; that Term Loan-II of Rs.150 lacs was sanctioned on 05.10.2011; that OA was filed for recovery of the amount; that the account of the applicant was running irregular since 31.08.2012; that the applicant did not deposit instalments regularly; that no payment was made after 2012 for a period of more than four years except small amounts deposited occasionally which were duly

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SA/234/2022 SANATAN DHARAM MEWAT EDUCATIONAL SOCIETY AND OTHERS Vs PUNJAB NATIONAL BANK 3

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reflected in the statement of account; that bank was entitled to capitalize the interest in terms of agreement and thus, it could not be said that accounts could not be classified as NPA; that the applicant had failed to place on record any provision which the respondent bank had not followed and the property was duly mortgaged with the bank. Rest of the averments made in the SA were also denied in reply to the SA.

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I have heard the learned counsel for both the parties and also gone through the record carefully.

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It was argued by the learned counsel for the applicant that notice under Section 13(2) of the Act was never served upon the applicant. On other hand, it was argued by the learned counsel for the respondent bank that demand notice dated 09.05.2013 was duly issued and posted by the respondent bank on 14.05.2013. It was further argued that notice was also served by hand on the applicant and it was received on 13.05.2013 by the Secretary on behalf of the Society and also it was duly acknowledged. Photocopy of the notice with signatures of the Secretary on 13.05.2013, has been placed on the case file as Annexure R/3. Learned counsel for the applicant argued that signatures were not that of the applicant. Sh. R.S. Bhatia, counsel argued that the same plea was taken in the same fashion in the earlier SA also. This fact was not denied by the learned counsel for the applicant. There is no pleading as to why the signatures of the applicant should not be believed. In these circumstances, there is no merit in the arguments of the learned counsel for the applicant.

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In the considered opinion of this Tribunal notice has been received by the applicant. Sh. R.S. Bhatia, counsel argued that the possession would be taken and only intimation with regard to the possession was given and the applicant could not approach this Tribunal, before taking of the possession.

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Sh. Ravi Data, counsel for the applicant argued that there was violation of Rule 8(1) and (2) of the Act because no notice was issued or published in the newspapers. Sh. R.S. Bhatia counsel argued that the notice shall be published in the newspapers after taking the possession. There is merit in the arguments advanced by Sh. R.S. Bhatia, Advocate.

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SA/234/2022 SANATAN DHARAM MEWAT EDUCATIONAL SOCIETY AND OTHERS Vs PUNJAB NATIONAL BANK 4

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Sh. Ravi Data, counsel for the applicant placed reliance upon the judgment of the Division Bench Hon’ble Punjab and Haryana High Court in the case of “ Indian Overseas Bank Versus District Magistrate, Sangrur and Others” in CWP No.30976 of 2019, decided on 24.11.2021, wherein inter alia the following was endorsed:

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“ Though, there is no provision for an advance notice to be given to the occupant/owner of the property before taking physical possession, but it would be desirable, that an advance notice of at least 15 days be served on the occupant before taking physical possession by the officer so deputed by the District Magistrate, so that persons to be dispossessed are not caught unawares.”

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On the other hand, it was argued by Sh. R.S. Bhatia, learned counsel that the facts and circumstances of the case in hand and the case in the authority (Supra) being not identical, authority (Supra) was not applicable to the case in hand. This Tribunal is in agreement with the contention of the learned counsel.

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It was further argued by Sh. R.S. Bhatia counsel that the notice was also in a way issued to the applicant as the applicant was made aware of the proceedings of possession on 20.12.2022 by way of pasting of notice on 01.12.2022. 6. In the facts and circumstances of the case, this Tribunal is of the considered opinion that there is merit in the argument advanced by Sh. R.S. Bhatia counsel, because notice as such is not the requirement of the Act and also for all practical purposes, the notice was there to the applicant and that precisely appears to be reason of the applicant approaching this Tribunal. It was argued by the learned counsel for the applicant that examination of the students was to be held in the College. Holding of examination of the students cannot come in the way of securitisation proceedings, especially when there is no payment of the debt after the year 2015.

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No other point was argued before this Tribunal.

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In view of the above discussion, this SA is dismissed with costs.

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Announced in the open Tribunal (M.M.Dhonchak) Presiding Officer DRT-2, Chandigarh

Sanatan Dharam Mewat Educational Society and Others v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Sanatan Dharam Mewat Educational Society and Others v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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