Partly allowed

M Saravanan v. Canara Bank

DRT21 Nov 2022SA/325/2022

Case brief

AI extract

What is this about?

The Tribunal dismissed a SARFAESI application challenging a sale notice. It directed the bank to clarify valuation and EMI debiting before further recovery actions, but dismissed the appeal as no procedural infirmities were made out while the sale was rendered infructuous.

What did the court decide?

Sale notice withdrawn; Bank directed to obtain proper valuation and clarify EMI debits; Applicant granted loss to negotiate settlement by 31.12.2022.

M Saravanan versus Canara Bank — Execution and Attachment | DRT (2022)

SA No.325 of 2022

21.11.2022

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 21^st day of November, 2022

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Present: Shri Ganapathi K.R.K.

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Presiding Officer

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SARFAESI APPLICATION No. 325 of 2022

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1.	Sh. M. Saravanan, S/o Mani, Old No.1B, New No.3, Jeevanandam Street, Kamarajar Salai, Lakshmi Puram, Thiruvanmiyur, Chennai – 600 041
2.	Mrs. S. Hemalatha W/o M. Saravanan Jeevanandam Street, Kamarajar Salai, Lakshmi Puram, Thiruvanmiyur, Chennai – 600 041 …Applicants
	Vs.
Cana	ra Bank
Thiru	vanmiyur Branch
No.1	59, Thiruvalluvar Salai
Thiru	vanmiyur,
Chen	nai – 600 041 ….Respondent
	Counsels on record / appeared:
	Counsel for Applicants : M/s. G. Vairava Subramanian Counsel for Respondent : M/s KRA Muthukrishnan

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ORDER

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This SA is filed challenging the Sale Notice dated 01.07.2022 issued by respondent bank scheduling E-auction to 20.07.2022, for recovery of a sum of Rs.49,67,032.02p.

SA No.325 of 2022

21.11.2022

Respondent bank had entered appearance and filed counter and typed set of documents.

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Heard Ld. Counsels appearing for both the parties. It is the case of applicant that respondent bank has not followed guidelines issued by Reserve Bank of India while declaring the loan account as NPA. Ld. Counsel submits that when the date of declaration of NPA is defective, all other further actions under SARFAESI basing on the said assignment of classification of the asset basing on income recognition principle would vitiate all subsequent actions. Ld. Counsel also submitted that the respondent bank has valued the same property at Rs.35 lakhs while sanctioning the loan in 2013, which is a Housing Loan and strangely has issued this third sale notice dated 01.07.2022, scheduling sale to 20.07.2022 with a reserve price of Rs.29 lakhs. Respondent bank has never given any explanation for reducing the valuation of the property nor has furnished valuation report obtained before issuing the impugned sale notice. Applicant is relying on the guideline value received from the internet which shows that the value of the property is much higher and that the respondent bank is trying to sell away at a grossly low price. Ld. Counsel for applicant submits that applicant intends to regularize his loan account and discharge the debt in monthly installments in terms of their contractual obligations. Ld. Counsel also submitted that respondent bank is not debiting EMIs for the Housing Loan as per the contractual terms entered into and agreed between the parties but has been doing so by their whims and fancies. A bare perusal of the statement of account for the last six months prior to the date of declaration of the account as NPA confirms and establishes that the amounts debited in the form of EMIs are not uniform and that every month a different figure was

SA No.325 of 2022

21.11.2022

being demanded from the borrower which confirms that the debits into the account were not the EMIs accepted to by the applicant but were of a different amount of which the applicant has no knowledge of or has been ever put on notice. Submitting so, Ld. Counsel for applicant also stated that no sale has taken place on the scheduled date in view of compliance of the interim condition by the applicants herein and so the impugned sale notice has become infructuous.

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Whereas Ld. Counsel for respondent bank has filed their counter and typed set of documents evidencing their actions. Ld. Counsel submits that the subsequent sale notice issued during the pendency of this SA has been duly instructed to be withdrawn and accordingly, respondent bank has withdrawn the same, consequently contempt petition IA No.1277/22 filed by applicants was duly withdrawn. Ld. Counsel has submitted that ever since the date of NPA, except for payment of Rs.43,000/- apart from compliance of interim order imposed by this Tribunal, applicants did not make any payments while the statement of account furnished confirms the outstanding principal amount due as well as overdue interest liable to be paid by applicants. Ld. Counsel submits that as on date there is outstanding of Rs.41 lakhs and odd, as due and recoverable from applicants and hence the SARFAESI actions. Ld. Counsel has submitted that respondent bank has followed all the procedures as warranted under law while issuing the impugned sale notice which is also admitted by the applicants in their SA and therefore submits that there are no infirmities on the part of respondent bank while issuing the impugned sale notice.

SA No.325 of 2022

21.11.2022

From the foregone submissions, it is evident that, applicants could not make out any infirmity in the procedure adopted by the respondent bank while issuing the impugned sale notice but are raising only an inherent question with regard to declaration of the account as NPA and debiting of different amounts as EMIs due without being put on notice of changes in interest rates or the installment amount and also regarding low valuation of the property, from the value arrived, at the time of sanctioning the loan. Whereas respondent bank has limited its submissions only to the extent of procedure followed while issuing the impugned sale notice and both parties admitted that no sale has taken place owing to which the impugned sale notice has become infructuous.

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Respondent bank is directed to obtain proper valuation and also clarify on the amounts demanded and debited to the loan account of the applicants before proceeding further under SARFAESI for recovery of their dues, if the applicants / borrowers are not approaching respondent bank and arriving at any negotiated settlement as was undertaken before this Tribunal by or before 31.12.2022.

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In the result, as applicants could not make out any infirmities in the procedure adopted by the respondent bank while initiating action under the Act, this SA is liable to be dismissed.

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Accordingly, this SA stands dismissed, however without costs. However, applicant is at liberty to approach respondent bank for a negotiated settlement and close the loan account by or before 31.12.2022, failing which respondent will be at liberty to proceed further with their SARFAESI actions for recovery of their dues, if the

SA No.325 of 2022

21.11.2022

default of the borrower continues. Interim order, if any granted and subsisting till this

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day stands vacated and all other IAs, if any pending stand closed.

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With the above directions, this SA stands disposed.

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A copy of the order be communicated to the parties concerned as per extant guidelines.

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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me in Open Court, on this the 21^st day of November, 2022)

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Sd/- (GANAPATHI K.R.K) PRESIDING OFFICER

M Saravanan v. Canara Bank

Case brief

What is this about?

What did the court decide?

M Saravanan v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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