Dismissed

N Sailakshmi v. Indian Bank

DRT9 Nov 2023SA/114/2023

Case brief

AI extract

What is this about?

This tribunal dismissed an application challenging section 14 measures under the SARFAESI Act. It held that statutory notices were validly served and published. The tribunal rejected the claim for redemption on the ground that no provision allows partial redemption while the debt remains in default.

What did the court decide?

The retention suit and application were dismissed and all pending inquiries were closed.

N Sailakshmi versus Indian Bank — Banking and Recovery | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL – II AT CHENNAI

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Dated this 9^th day of November, 2023

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PRESENT : SHRI T.RAJESH

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PRESIDING OFFICER

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SA No.114/2023

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Mrs.N.Sailakshmi, W/o.Nareshkumar, No.15, Thirumoorthy Main Road, Nungambakkam, Chennai – 600 034.

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… Applicant.

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Vs.

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Indian Bank, Sam Large Chennai Branch, Rep. by its Authorised Officer, No.55, 2^nd Floor, Ethiraj Salai, Egmore, Chennai – 600 008. Rep. by its Authorised Officer, Mr.T.S.Sahadevan. … Respondent. Counsel for Applicant : M/s.Anil Relwani. Counsel for Respondent : M/s.C.Ramaiah.

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O R D E R

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This application is filed by applicant under section 17(1) of the

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Securitisation and Reconstruction of Financial Assets and Enforcement

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of Security Interest Act, 2002 (herein after called SARFAESI Act or the ‘Act’, as the case be) with a prayer to set aside the measures initiated by the respondent leading to the orders u/s.14 by Hon’ble CMM, Egmore, Chennai in Crl.M.P.No.37597/2022 dt.23.12.2022.

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The applicant is admitting the creation of security interest in lieu of the facility availed by M/s.Vanathi Exports Private Limited. It is also contended by applicant that the applicant is not even a beneficiary of the financial assistance availed by the borrower. It is stated by the applicant that the applicant is ready to redeem her property. It is also contended that no demand notice is issued to the applicant and only when the Advocate Commissioner knocked the doors of the applicant, the applicant came to know about the impugned measures.

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In the grounds to the SA, the applicant contends that the applicant’s family is residing there and further contends that section 14 is not filed by the Authorised Officer. The contention as to the nonservice of demand notice and possession notice is reiterated apart from contending that the respondent had not acted fairly in good faith. It is also alleged that the bank had provided false information to the Ld. Magistrate and that the applicant is now being deprived of her constitutional right of the property. Along with SA the applicant had produced the impugned order passed in Crl.M.P.No.37597/2022 by Hon’ble CMM, Egmore, Chennai dt.23.12.2022 and notice issued by the Advocate Commissioner dt.04.03.2023. Based on the above contention and the documents, applicant seeks to set aside the measures.

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The respondent filed their counter denying the contentions of the applicant and further contends that the applicant is Director cum

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Guarantor cum Mortgagor for the loan availed by the company to the tune of Rs.1,70,00,000/-, Rs.42,50,000/-, Rs.7,96,000/and Rs.39,96,000/-. It is stated that the repayment to the credit facilities were defaulted, resulting the account being classified as NPA. It is stated that the demand notice is issued on 25.08.2021 calling upon the borrowers to repay an amount of Rs.2,70,55,830/- as on 24.08.2021. It is also stated that as the amount as demanded is not repaid the present measures are initiated. It is also stated that the possession notice dt.04.12.2021 was issued, published and affixed as required under the statute. Hence, according to the respondent, there is due compliance of mandates of the statute. Along with counter, the respondent had produced the following documents:

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(a) Demand Notice dt.25.08.2021.

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(b) Postal receipts of Demand Notice dt.26.08.2021.

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(d) Publication of Demand Notice in - Tamil dt.10.09.2021.

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(e) Publication of Demand Notice in - English dt.10.09.2021.

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(f) Possession Notice dt.04.12.2021.

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(g) Postal Receipts of possession notice dt.07.12.2021.

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(h) Publication of Possession Notice - English dt.08.12.2021.

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(i) Publication of Possession Notice - Tamil dt.08.12.2021.

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(j) Affixture of Possession Notice – Photo dt.04.12.2021.

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Heard the Ld. Counsel for both sides and considered the rival contentions as taken in the SA and the counter affidavit in the light of pleadings therein and the documents submitted by them. The following issues arise for consideration in this matter:

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(i) Whether the measures initiated by the respondent leading to the procurement of section 14 orders are in accordance with the statute or not?

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(ii) What orders are to be passed?

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Since both these issues are inter-related the same were gone into and decided together.

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The applicant though contends that the applicant is neither the beneficiary nor the borrower is having no dispute as to the creation of security interest. The applicant is not disputing that the applicant had mortgaged the property with the respondent bank. The applicant though contends that the mortgage is created on undue influence, if the same have been true, it cannot be a ground to allow the applicant washing her hands to liability.

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The applicant is contending that no demand notice or possession notice is served on the applicant prior to invocation of section 14 measures. In order to rebut this contention, the respondent had produced the demand notice with postal receipts and the acknowledgement card evidencing the service of demand notice on the applicant. The proof produced evidencing the service of demand notice is sufficient to hold that there is due compliance of Rule 3 of Security Interest (Enforcement) Rules, 2002. The gist of demand notice is also

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published in two dailies which is in consequential to the findings as to the proper service of demand notice on the borrowers.

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Even though the issuance of possession notice is not sine qua non in initiation of section 14 proceedings, the respondent had produced proof as to the service, publication and affixture of possession notice. The above documents proved the statutory compliance of Rules 8(1) and 8(2) of Security Interest (Enforcement) Rules, 2002.

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The SA is filed raising a primary contention that the applicant is ready to redeem her property by paying the amount equivalent to the reserve price fixed for the property. In the absence of any enabling provision allowing partial redemption of property, this Tribunal cannot accept the contention of the applicant that the applicant is entitled to redeem her property when the debt against which the security created remains in default.

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No other contention is taken by applicant in her challenge as to section 14 measures. In view of the discussions as held above and the findings entered therein, this Tribunal is of the view that there is no merit in the SA and the SA is liable to be dismissed.

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In the result, SA No.114/2023 stands dismissed. All pending IAs

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stands closed. Issue copies in accordance with Rule 16 of the Debt

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Recovery Tribunal (Procedure) Rules, 1983. All pending IAs stands

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closed. Issue copies in accordance with Rule 16 of the Debt Recovery Tribunal (Procedure) Rules, 1983.

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( Dictated to PA, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 9^th day of November, 2023 )

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Sd./(T.RAJESH) PRESIDING OFFICER DRT-II, CHENNAI

N Sailakshmi v. Indian Bank

Case brief

What is this about?

What did the court decide?

N Sailakshmi v. Indian Bank

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

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