Dismissed

A C Velmurugan v. City Union Bank Limited

DRT22 Sept 2023SA/154/2022

Case brief

AI extract

What is this about?

The court disposed of a securitization application under Section 17 of the SARFAESI Act. It held that the respondent bank validly followed compliance procedures, including service and publication of notices, evidenced by documents and the applicant's prior admission of security interest. Consequently, the application to set aside bank measures was dismissed.

What did the court decide?

The securitization application is dismissed; all pending interim applications are closed. Copies issued per Rule 16.

A C Velmurugan versus City Union Bank Limited — Securities and Capital Markets | DRT (2023)

¶1

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

¶2

Dated this 22^nd day of September, 2023

¶3

PRESENT: SHRI T. RAJESH PRESIDING OFFICER

¶4

SA No.154 of 2022

¶5

Mr. A.C. Velmurugan S/o A. Chinnaiyan Old No.14-B, New No.41 Madavarayan Pettai Street Arani Town, Tiruvannamalai Street – 632 301 …Applicant

¶6

Versus

¶7

M/s City Union Bank Limited Rep. by its Assistant General Manager / Authorised Officer Mr. N. Mohan Kumaramangalam “Narayana” Administrative Office No.24-B, Gandhi Nagar, Kumbakonam – 612 001

¶8

Having its Branch at Arani Branch No.30, Vadiraja Street, Thachur Main Road Kosapalayam, Arani Tiruvannamalai District – 322 301 …Respondent

¶9

Counsel for Applicant : M/s M. Gopi Counsel for Respondent : M/s A. Karthikeyan

¶10

FINAL ORDER

¶11

This Securitization Application in short SA is filed under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), herein after been referred as SARFAESI Act or the Act as the case be is impugned this Section 17 application.

¶12

The applicant admits to have availed a Over Draft and OSL loan from in 2016 and another OSL loan in the year 2019. The applicant claims that they had been regularly servicing the facilities. The applicant also admits the creation

¶13

¶14

of Security Interest in lieu of the credit facilities availed by one by one M/s. Sri Enterprises which the applicant claims that fully settled.

¶15

It is contended by the applicant that the respondent had issued a demand notice which according to the applicant is issued in respect of credit facilities for which no security interest is created. It is the further case of the applicant though the respondent admitted their mistake in issuing a demand notice, they proceeded further and procured the impugned orders.

¶16

In the grounds to the SA, the applicant contents that the procedure followed by the respondent is erroneous as the objection made by the applicant to the demand notices were not adverted to. The applicant also takes contentions as to non publication of the possession notice.

¶17

The respondent entered appearance and filed their counter refuting the contentions of the applicant. The respondent further reiterated that they had scrupulously followed the procedure as mandated by the statute. The respondent had specifically denied the contention of the applicant that there is exists no security interest and specifically contented that there exists security interest in lieu of the credit facility. It is also stated that that only as the loan account full in default, the account was duly classified as NPA and measures are initiated. The respondent had produced the documents which according to them disprove the applicant’s contentions.

¶18

Heard the Ld. Counsel for both sides and considered the lis. The only issue that arise for consideration in this matter is as to whether the respondent had followed the procedure in their measures leading to the Section 14 orders.

¶19

¶20

The respondent apart from contenting that they had followed the procedure had produced the proof of service of demand notice as the acknowledgement card evidencing the receipt of notice is produced. The respondent had also produced the proof as to the service affixture and publication of the possession notice. The documents so produced by the respondent evidenced compliance of Rule 3, 8(1) and 8(2) of the Security Interest (Enforcement) Rules.

¶21

The statement of accounts as produced by the respondent evidences that the account is in default and the respondent is justified in their NPA classification.

¶22

Even though the applicant raises a dispute as to the existence of any Security Interest. However, the respondent had produced the earlier SA.108 of 2020 filed by the applicant as the proprietor of M/s Sri Enterprises, which evidences that the there is clear admission from the part of applicant as to the existence of Security interest over the schedule properties.

¶23

On consideration of above discussed facts, it could safely be concluded that the applicant had miserably failed in putting forth any valid contention as against the measures and the SA is liable to be dismissed.

¶24

In the result SA stands dismissed, all pending IA’s stands closed, no orders as to cost. Issue copies in accordance with Rule 16 of the Debt Recovery Tribunal (Procedure) Rules 1993.

¶25

(Dictated to PS, transcribed by him, corrected, signed and pronounced by me in Open Court on this the 22^nd day of September, 2023)

¶26

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

¶27

A C Velmurugan v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

A C Velmurugan v. City Union Bank Limited

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

Similar cases

Mrs S Saroja versus State Bank of India

S Paldurai versus Canara Bank

Tamilnad Mercantile Bank Limited versus M/s.Sun Traders

Hdfc Bank Limited versus Ms. v. Ammani

State Bank of India versus Mr. P. Panneerselvam

M/s Canara Bank versus Mrs. P. Mythili