Dismissed

Ms Chandalingeshwar Stone Crushers v. M/S Kallappanna Awade Ichalkaraji Janata Sahakari Bank Ltd.

DRT11 Oct 2023SA/189/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed a Securitisation Application filed by borrowers seeking to set aside a possession order. The Tribunal held that the applicants failed to establish they were 'aggrieved persons' as they could not prove a legal injury or deprivation of rights, noting that mere apprehension or unproven claims of irregularity did not confer locus standi.

What did the court decide?

The Securitisation Application was dismissed, and the applicant-borrowers were permitted no relief; the defendant-bank was allowed to continue recovery proceedings.

Ms Chandalingeshwar Stone Crushers versus M/S Kallappanna… — Execution and Attachment | DRT (2023)

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IN THE DEBTS RECOVERY TRIBLTNAL - 1, KARNATAKA AT BENGALURU

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PRESENT: SRI IMTI AZ ALI

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PRESIDING OFFICER

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Dated the 1lth day of October,2023

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SECURITISATION APPLICATION NO. I89 OF 2022

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B"t*""r,

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l. IWs Chandalingeshwar Stone Crushers, Plot No.2, Belavatti, Belagalpete P.O, Hangal, Haveri, Karnataka - 581104, represented by its Proprietor, Basavanneppa Shivappa Hattiyavar.

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Guddappa S Hattiyavar, S/o late Shivappa, Gundenahalli, Byadagi, Haveri, Karnataka.

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Gadigeppa S Hattiyavar, S/o late Shivappa,

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' Gundenatralli, Byadagi, Haveri, Karnataka.

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Prakash G Hattiyavar, S/o Gadigeppa S Hattiyavar, Gundenahalli, Byadagi, Haveri, Karnataka.

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Shivapa G Hattiyavar, S/o Gadigeppa S Hattiyavar, Gundenahalli, Byadagi, Haveri, Karnataka. ...Applicants And M/s Kallappanna Awade Ichalkaraji Janata, , Sahakari Bank Ltd, Sullad Heights, Azad Road, Opp Ganesh Peth Bus Stop, Near CBT, Hubli, Karnataka - 580020. .. .... Defendant

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And

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This Securitisation Application having been heard on 03.11.2022 in the^presence

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of Advocates M/s Jyothi P Desai and Shriyalal B^{Vandakudurefor} the^{defendant, and the}

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. t V' b

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sA t89/2022

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applicants being absent, and stood over to this day for consideration, the Tribunal delivered the following:-

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FINAL ORDER

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The applicants filed the above Securitisation Application (SA) on 28.03.2022 under S.17(l) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as amended from time to time - hereinafter referred to as 'the Act'- praying to set aside the order dated 08.03.2022 passed by the Deputy Commissioner, Haveri in DC-HAY-1401410112-21-HAV-MAG. The applicants are none other than the borrowers of a financial assistance in the nature of business loan of 1145 lakhs availed from the defendant multi-state schedule bank.

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The case set out by the applicants in the SA in brief is as follows:- The I't applicant as the principal borrower and applicants 2 to 5 as guarantors on 13.04.2018 availed a business loan of {145 lakhs from the defendant multi-state schedule bank under MSME scheme for the purpose of purchase of crusher plant machineries. The loan amount was directly disbursed to the supplier but he did not supply the machineries even after the lapse of nearly l% years from the date of receipt of the money. Due to the pandemic situation and other reasons, the applicants could not carry out the quarry business. Inthe meantime, the defendant issued demand notice under S.l3(2) of the Act calling upon the applicants to discharge the debt due within sixty days from the date of receipt of such notice. However, substantial amounts repaid by the applicants were not given credit to by the defendant. In the meantime, the defendant published in the Vijayavani daily dated 19.01.2020 for taking possession of the schedule immovable property and obtained the order dated 08.03.2022 from the District Commissioner. Now, the defendant taking advantage of the aforesaid order is trying to sell the schedule immovable property lesser than the market value illegally by joining hands with some third parties. The impugned notice is premature as the term loan is yet to be completed.

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sA 189t2022

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The defendant has not followed the mandatory^provisions under the Act and the Rules made thereunder while allegedly classifying the account as non-performing asset and issuing the possession notice during the lockdown period. The defendant has claimed exorbitant and excess interest to the loan amount, which is contrary to the terms of the sanction. The applicants have never agreed to pay such interest. On the above contentions, the applicants prayed to set aside the impugned order.

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, 3. The defendant filed a statement of objection on 14.06.2022 refuting the case put forward by the applicants and praying to dismiss the application as not maintainable.

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On the appreciation of the rival contentions, the only issue arises for consideration is as to whether the applicants are entitled to the relief^prayed for?

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The Issue:- Admittedly, the l't applicant as the principal borrower and applicants 2 to 5 as guarantors on 13.04.2018 availed a business loan of^{145 lakhs^from the defendant multi-state schedule bank under MSME scheme for the^purpose of purchase of crusher plant machineries and the applicants defaulted in repayment of the loan. The defendant issued demand notice under S.13(2) of the Act calling^upon the applicants to discharge the debt due within sixty days from the date of receipt of such notice and published in the Vijayavani daily a^{possessionnotice dated 19.01.2020for} taking possession of the schedule immovable^property and obtained the order dated 08.03.2022 from the District Commissioner.

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Except contending that substantial amounts remitted by the applicants have not been appropriated by the defendant, the applicants^{havenot produced any iota of} evidence in support of such contention.^{They havenot divulged any detailssuch as the} date, amount, mode of payment etc in their application. It^{is trite law that the party who} pleads discharge should prove the same. An arbitrary apprehension has been^expressed by the applicants that the defendant taking advantage of^{the aforesaidorder is tryingto}

sA 18912022

sell the schedule immovable property lesser than the market value illegally by joining hands with some third parties. But the applicants have no case that the defendant has taken any action under sub-section (a) of S.13 of the Act for such purpose. The term of the loan is nothing to do with the default committed with the applicants and the recourse taken thereto by the defendant under the Act and the Rules made thereunder. Except vaguely contending that the defendant has not followed the mandatory provisions under the Act and the Rules made thereunder while allegedly classifying the account as nonperforming asset and issuing the possession notice during the lockdown period, the applicant has not pointed out as to what are the irregularities committed by the defendant in taking measures under sub-section (a) of S.13 of the Act. The contention regarding the exorbitant and excess interest etc will not come under the purview of this Tribunal in an application filed under S.l7(l) of the Act. In short, no case made out by the applicants to entertain the present application by the Tribunal to examine the measures taken by the defendant under the provisions of the Act and the Rules made thereunder in terms of subsections (3) and (a) of S.17 of the Act. No issue emerges out from the facts of the case presented by the applicants to be examined by this Tribunal. The apprehension of the applicants does not accrue any right upon them to institute an application under S.l7(1) of the Act. The applicants could not prove that they are really aggrieved by any of the measures taken by the secured creditor or its authorised officer under sub-section^(a) of S.l3 of the Act.

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The employment of the words 'any person (including borrower), aggrieved by any of the measures referred to in sub-section^(a) of S.13 of the Act taken by,the secured creditor or his authorised officer' under S.l7(1) of the Act clearly indicates that only those persons who are really aggrieved by any of the measures^taken under S.l3(4) of the Act are having the right to file an application thereunder.^The applicants have not established by reason or otherwise that they are deprived of any of

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sA18912022

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thelr rights guaranteed under the Constitution or under any law for the time being in force, by way of the measure taken under S.l3(4) or S.14 of the Act by the defendant. They could not show that any legal injury caused to them. Therefore, the applicants do not come under the definition of 'aggrieved person' to make an application under S. l7( 1) of the Act. Thus, the applicants are having no locus standi to^present such an application.

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The Hon'ble Supreme Court tn Ravi Yashwant Bhoir v District Collector treported in 2012^{(2) KLT SN} I^{(C.No.]tSCJ has held thata person cannot be heardas a} party unless he answers the description of aggrieved party, and it reads so:-

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' "A person who suffers from legal injury can only challenge the act or omission. There may be some harm or loss that moy not be wrongful in^the eyes^{of law because it maynot resultin injury to a legal} right or legally protected interest of the complainant^{but judiciallyharm} of^{this descriptionis called} damnum sine injuria. The complainant^has to establish^{that hehas beendeprivedof or denied of a legal} right and he has sustqined injury to any legally^protected interest. ln^{case he has no legal peg} for^a justiciable claim to hang on, he cannot be heard as a party in^q lis. A fanciful or sentimental grievance may not be sdficient to confer a locus^{standi to sue uponthe individuql.There musl be iniuriaor a legal} grievance which can be appreciated and not a stat^{pro ratione valuntqs reQsonsi.e,} a^{claimdevoidof} reasons.^lJnder the garb of being necessory^{party,a person cannot be permitted to mqke a cQSeqs that of} general public interest. A person having a remole interesl connot^{be permitled to become a partyin thelis,} as the person wqnts to become a^{party in} a case,^has lo^{establishthathe has a proprietary rightwhichhas} been or is threatened to be violated, for^{the reasons that a legal injurycreatesa remedial rightin the} injured person. A person cannot^{be heard as q pqrtyunless he answersthe descriptionof aggrieved} pqrtY."

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In the above circumstances and in view of^{the discussionsas above, it is}

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found that the applicants are not^{aggrievedby the recourseand measures taken by the} authorised officer of the defendant multi-state^{schedulebank under sub-section(4) of} S.13 or S.14 of the Act in taking^{possessionof the scheduleimmovableproperties. The} SA is liable to be dismissed, and,^{therefore, notwithstanding anything contained in any} other law for the time being^{in force, the defendantmulti-stateschedule bank is entitled} to continue with further^{proceedings pursuant to the order dated 08.03.2022passedby the} Deputy Commissioner,^{Haveri in DC-HAV-14014/0112-21-HAV-MAGfor recovery of} its secured debt by enforcing its^{security interest overSA schedule securedassets.}

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, 10. In^{the result, IA Nos.72612022,168612022and 197712022 are closed and} SA 189/2022 is dismissed. The^{defendantmulti-stateschedule bank is permitted to} continue with further^{proceedings pursuantto the order dated 08.03.2022passed by the}

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sA 189/2022

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Deputy Commissioner, Haveri in DC-HAV-1401410112-21-HAV-MAG for recovery of its secured debt by enforcing its security interest over SA schedule secured assets. No costs.

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I l. Communicate copy of this final order to both parties as provided in subsection (7) of S.17 of the Act r/w R.16 of the Debs Recovery Tribunal (Procedure) Rules,

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1993 (as amended from time to time).

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[Dictated^{to my PA directlyon the computer, correctedandpronounced by me in the openTribunal onthis theI lth} day ofoctober,20231

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,L\ I^IMTIAZALI ] PRESIDING OFFICER

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Schedule to SA 189/2022

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All thot port ond porcel of the immovoble property beoring ptol Nos.26 meosuring 07:0g Guntos, plol No.2zll meosuring 03 Guntos. PloI No.27 /2 meosuring 03.4 Guntos ond plot No.28 meosuring 03.825 Gunios in oll totolling to 17.246.25 Sqore Feets coming under Sy.No.268 (Old Sy.No.l 38) siluoted ot Gundenoholli Villoge, Byodogi Toluk, Hoveri District ond bounded byi

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Plol No.26:

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' 8 Scheduleto SA18gl2O22

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IN THE DEBTS RECOVERY TRIBLINAL - I, KARNATAKA AT BANGALORE

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PRESENT: SRI IMTI AZ ALI PRESIDING OFFICER

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Dated the I lth day of October,2023

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SECURITISATION APPLICATION NO. 189 OF 2022 Between

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M/s Chandalingeshwar Stone Crushers, Plot No.2, Belavatti, Belagalpete p.O, Hangal, Haveri, Karnataka - 581 104, represented by its Proprietor, Basavanneppa Shivappa Hattiyavar and four others.

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...Applicants

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And

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M/s Kallappanna Awade Ichalkaraji Janata, Sahakari Bank Ltd, Sullad Heights, Azad Road,Opp Ganesh Peth Bus Stop, Near CBT, Hubli, Karnataka - 580020.

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Defendant

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FINAL OITDEIT

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)*,,

Ms Chandalingeshwar Stone Crushers v. M/S Kallappanna Awade Ichalkaraji Janata Sahakari Bank Ltd.

Case brief

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Ms Chandalingeshwar Stone Crushers v. M/S Kallappanna Awade Ichalkaraji Janata Sahakari Bank Ltd.

Case brief

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