Allowed

P I Sabastian v. Omkara Assets Reconstruction Private Limited

DRT16 Mar 2023SA/162/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the Set Aside application, quashing a possession notice issued under Section 13(4) of the SARFAESI Act. The court held that the Authorized Officer violated Section 13(3A) by failing to consider borrower objections to a demand notice, thereby vitiating all subsequent enforcement actions.

What did the court decide?

The impugned possession notice dated 25.02.2022 is set aside. Possession is restored to the mortgagor. The respondent is directed not to debit SARFAESI expenses to the borrower's account.

P I Sabastian versus Omkara Assets Reconstruction Private… — Banking and Recovery | DRT (2023)

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S.A. 162 of 2022 16.03.2022

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 16^th day of March, 2023

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Present: Shri Ganapathi K.R.K.

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Presiding Officer

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SARFAESI APPLICATION No. 162 of 2022

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Mr.P.I.Sabastian, S/o.Mr.Peter Irudhayanathan Plot No.52, Sri Visalakshi Nagar, K.K.Salai, 7^th Street, Santhoshapuram, Vengaivasal,

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Selaiyur, Chennai – 600 073.

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Mrs.S.Margaret, W/o.Mr.P.I.Sabastian, Plot No.52, Sri Visalakshi Nagar, K.K.Salai, 7^th Street, Santhoshapuram, Vengaivasal,

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Selaiyur, Chennai – 600 073. .…Applicants

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Vs.

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The Auhorized Officer, Omkara Assets Reconstruction Private Limited, (Actig in its capacity as a Trust of Omkara PS30/2021-22 Trust) No.9, M.P.Nagar, First Street,

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Kongu Nagar Extension, Tirupur – 641 607.

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M/s.Ubagar Grand Bazaar, Proprietrix, Mrs.M.Stella Mary, Block-II, 1A & 1B, Natwetaara, Ravathipuram Main Road, Ayyanchery, Urapakkam, Chengalpattu – 603 210.

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Mr.A.Susaiarul, S/o.Mr.Antony, No.25, 4^th Cross Street, Nithyananda Nagar, Irumbuliyur, Chennai, Tamil Nadu – 600 045.

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S.A. 162 of 2022 16.03.2022

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Mr.A.Packiaraj, No.25, 4^th Cross Street, Nithyananda Nagar, Irumbuliyur, Chennai, Tamil Nadu – 600 045.

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M/s.Ubagar Super Market, Proprietor, Mr.A.Susai Arul, No.4, G.S.T.Road, Tea Kadai Bus Stop,

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Urapakkam, Chengalpattu – 603 202. ….Respondents

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Counsels on record / appeared:

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Counsel for Applicant : M/s.R.Munuswamy. Counsel for first Respondent : M/s Ramalingam & Associates Counsel for Respondents 2 to 5 : M/s.P.L.Thulasidass.

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ORDER

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This SA is filed challenging the Possession Notice dated 25.02.2022 issued by respondent institution under Section 13(4) of SARFAESI Act for recovery of a sum of Rs.35,68,786.30p due as on 24.02.2022.

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Heard Ld. Counsels appearing for all the parties.

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It is the case of applicants that originally they availed loan from Karur Vysya Bank and later on moved to Indusind Bank Limited for higher facilities together with the loan take over from Karur Vysya Bank against the mortgage of their assets. It is also submitted on behalf of applicants that their loan liability subsisting with M/s. Indusind Bank Limited has been assigned to the 1^st respondent herein together with the attended mortgages. The present challenge is to the impugned possession notice dated 25.02.2022.

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S.A. 162 of 2022 16.03.2022

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It is the case of applicants that consequent upon demand notice dated 21.09.2021 served upon them, they had raised their objections to the same as warranted under Section 13(3) and sent the same to designated address of the Authorised Officer as detailed in the demand notice. It is the case of applicants that the said representation was refused by the Authorised Officer and hence returned to sender as per the postal endorsement filed in the typed set of documents of applicants. The present challenge is to the impugned possession notice dated 25.02.2022. It is the case of applicants that consequent upon refusal of the Authorised Officer in Chennai, applicants had made further attempts to escalate the issue and forwarded the refused cover along with their representations to the Chairman and Managing Director as well as the Executive Director at the Head office of assignor of 1^st respondent herein. It is the case of applicants that they have received a reply from the Head Office admitting to the receipt of their objections but denying and disputing the same including refusal of notice by the Authorised Officer even after furnishing the copy of endorsement on the returned cover. Ld. counsel for applicants submits that the reply was not from the Authorised Officer as warranted under the Act and therefore the actions of the Authorised Officer in issuing the impugned possession notice without causing a reply to the objections raised by the borrowers / applicants herein, is contrary to law and hence the SARFAESI actions are vitiated right from the beginning.

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Ld. counsel for respondent 2 to 5, who are the principal borrowers, is present and denied and disputed the allegations against them made by the applicants and submit that the alleged agreement, which applicants are relying upon is void ab-initio. It is their case that they had discharged more than Rs.13 Lakhs to the erstwhile Indusind bank,

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S.A. 162 of 2022 16.03.2022

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while the guarantors / applicants herein had remitted only Rs.4 Lakhs pursuant to agreement between the parties. It is the case of respondents 2 to 5, that applicants herein had violated their terms and obligations under the said agreement and are levelling false and baseless allegations without any substance. However respondents 2 to 5 admitted that applicants had extended mortgage security over their properties for the loan facilities granted and availed by R-2 to R-5 herein. Ld. counsel for R2 to R5 fairly conceded that they are not challenging the SARFAESI actions of 1^st respondent bank herein.

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Whereas Ld. Counsel for 1^st respondent, Mr.Jayaharan is present and demonstrated the actions of the respondent bank from the stage where Indusind Bank has declared the account as NPA on 31.03.2021 and later issued notice to all the borrowers and guarantors as warranted under Section13(2) on 21.09.2021, followed by the impugned Possession notice on 25.02.2022. Ld. counsel submits that 1^st respondent has followed the procedure as warranted under law and that there are no infirmities there upon. It is the case of 1^st respondent that the alleged copy of the cover with the endorsement as ‘refused’ and returned to sender is a forged document and might not be the original since the endorsement of the postal authorities would not be by a stamp, but only hand written by the concerned postman. It is also the case of 1st respondent that in their reply from Head Office it is clearly stated that Indusind Bank Limited being a public limited company shall not refuse any letters or correspondence addressed to it. However, Ld. counsel could not establish anything contrary to the said copy of refusal of letter by the Authorised Officer.

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S.A. 162 of 2022 16.03.2022

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In view of the aforesaid submissions by all the concerned counsels, it is clear and evident that Indusind bank limited has refused the objection caused by the borrowers at the first instance to the demand notice and therefore has violated the provisions of Sec.13 (3A) of the Act which obviously vitiates all its further actions. For the above said reason, the impugned possession notice dated 25.02.2022 is hereby set aside. Consequently, possession is restored to mortgagor.

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As a result, SA stands allowed. Respondent is directed not to debit their SARFAESI expenses to the borrowers loan account. Interim order, if any granted and subsisting till this day stands vacated and all other IAs, if any pending stand closed. Liberty be with respondent bank to initiate action afresh if the default of the borrower continues.

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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 16^th day of March, 2023)

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Sd/-

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(GANAPATHI K.R.K) PRESIDING OFFICER

P I Sabastian v. Omkara Assets Reconstruction Private Limited

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P I Sabastian v. Omkara Assets Reconstruction Private Limited

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