Dismissed

K K Mohanan v. Punjab National Bank

DRT26 May 2023SA/194/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal (DRT) heard a Securitisation Application seeking to set aside an Advocate Commissioner notice for taking physical possession of mortgaged property. The Tribunal noted the applicant's failure to comply with High Court interim orders and lack of merit in challenging the defendant's statutory proceedings under the SARFAESI Act.

What did the court decide?

The Securitisation Application seeks to set aside Annexure-A2 Advocate Commissioner notice; declared that applicant is not entitled to reliefs sought.

K K Mohanan versus Punjab National Bank — Contract and Commercial Disputes | DRT (2023)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 26^th DAY OF MAY, 2023

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PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

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S.A No.194 of 2023

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Between

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K.K. Mohanan, S/o Kunhikrishnan Nair, Kalathil Kunnummal House, Vakayad P.O., Kozhikode – 673614.

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--- Applicant

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And

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Authorised Officer/Chief Manager, The Punjab National Bank, Shathabhi Bhavan, Govindapuram, Kozhikode – 673016.

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--- Defendant

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This petition coming on 25.04.2023 for hearing before me in the presence of Mr. Sarin Panicker, Advocate for the Applicant and Mr.C.Ajith Kumar, Advocate for the defendant and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

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O R D E R

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This Securitisation Application was filed on 11.04.2023 seeking to set-aside Annexure-A2 Advocate Commissioner notice on 25.03.2023.

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SA No.194 of 2023

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2. The averments of the applicant in the SA in brief are as follows:

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The applicant had availed an amount of Rs.2,40,00,000/- as overdraft facilities from the defendant Bank on 2015 onwards. The applicant had mortgaged his properties comprising of all that part and parcel of property bearing Sy. No.169/51 and 169/50 land measuring total of 8.90 Ares along with building consisting of, situated at Panangadu village, Kozhikode district to defendant as security for the above loan transaction which belonged to the applicant.

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The applicant had paid instalment regularly but due to financial crisis the applicant could not pay the installment regularly. The defendant had issued demand notices under Section 13(2) and Section 13(3) of Securitisation Act directing the applicant to pay an amount of Rs.2,40,00,000/-.

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The defendant filed CMP No.2001/2022, Annexure-A1 before the learned Chief Judicial Magistrate Court Kozhikode under Sec.14(1) of the SARFAESI Act, 2002 for taking possession of the secured assets. The applicant had filed W.P. (C) No.5878/2023 before the Hon'ble High Court of Kerala to stay all securitization proceedings initiated by the defendant. On 21.02.2023 the Hon'ble High Court of Kerala granted interim stay on condition that applicant should deposit Rs.25,00,000/- within six weeks, but applicant failed to comply with the interim order. On 05.04.2023 the Hon'ble High Court of Kerala dismissed W.P. (C) No. 5878/2023. The learned Chief Judicial Magistrate Court Kozhikode appointed Meera S., as Advocate Commissioner and she issued notice, Annexure-A2, stating that she will took the possession of the property on 28.3.2023 at about 2.00 pm. But that Advocate Commissioner had not took possession of the secured asset on that 28.3.2023 and now the Advocate Commissioner informed that she will took possession on 19.04.2024. Annexure-A2 notice is illegal and liable to be set aside.

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The defendant came on record and filed Written Statement interalia contending as follows :

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The applicant, who is a medical practitioner, running a 75 bedded hospsital at Vattoli Bazar, Balussery, Kozhikode, for the purpose of renovation and modernizing the hospital, availed an Over Draft Facility, with a limit of Rs.2,40,00,000/- from the defendant on 29.11.2017, upon executing necessary loan documents, on the collateral security of the properties owned by the applicant. The wife of the applicant, Dr.Geetha Narayanan, stood as guarantor, and executed personal guarantee agreement, in favour of the defendant. A

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Page 2 of 6

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SA No.194 of 2023

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further loan of Rs.5 Lakhs was also sanctioned to the applicant by the defendant as Term Loan on 28.05.2020, against execution of necessary loan documents. After availing the financial facilities, applicant failed to adhere to the repayment terms, resulting in the classification of the loan account as NPA on 31.03.2021. The defendant recalled the loan account and initiated SARFAESI Proceedings against the secured asset, by issuing notice, Annexure-B1 under Section 13(2) of the SARFAESI Act. Exhibit-B1 was duly acknowledged by the applicant, as evident from the acknowledgement card on its last page. Despite receipt of the same, as applicant failed to settle the liability, defendant took symbolic possession of the secured asset on 12.04.2022, by issuing possession notice, Annexure-B2. Annexure-B2 was duly published in the two dailies, in accordance with the SARFAESI Rules. In pursuance thereof, the defendant put the property for sale, by issuing sale notice dated 12.05.2022, Annexure-B3 to the applicant. For want of bidders, the said sale did not fructify. Thereafter, defendant filed Annexure-A1 petition before the CJM Court, Kozhikode, seeking for physical possession of the secured asset, wherein Annexure-A2 notice was issued by the Advocate Commissioner, appointed by the court. In pursuance thereof, challenging Annexure-B3 and Annexure-A2, applicant filed W.P.(C) No.5878/2023 before the Hon'ble High Court of Kerala, wherein, the court as per interim order dated 21.02.2023, AnnexureB4 stayed the dispossession for a period of six weeks, on condition that the petitioner remits a sum of Rs.25 lakhs within one months. As the terms of Annexure-B4 was not complied, the Hon'ble High Court of Kerala vide interim order dated 23.03.2023, Annexure-B5 vacated the stay. Subsequently, the wife of the applicant filed W.P.(C) No.11127/2023 before the Hon'ble High Court of Kerala seeking for a direction for grant of instalment facility for repayment of the entire loan, in the light of Annexure-A2 notice. Though the said writ petition came up for admission hearing on 28.3.2023, no orders were granted by the court and it was adjourned. Thereafter, vide judgment dated 05.04.2023, Annexure-B6, W.P.(C) No.5878/2023 was dismissed by the Hon'ble High Court of Kerala. Also, W.P.(C) No. 11127/2023 was dismissed by the Hon'ble High Court of Kerala vide order dated 11.04.2023, Annexure-B7, as petitioner did not press for the same. After inviting Annexures-B6 and B7, the applicant has filed the present S.A, without bring to the notice of this Hon'ble Tribunal, as aforesaid facts.

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There are no procedural irregularities committed by the defendant in the conduct of the recovery proceedings initiated so far. When the liabilities as on 31.03.2023 due under the various loan accounts of the applicant, clubbed together, is to the tune of

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Page 3 of 6

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SA No.194 of 2023

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Rs.3,14,19,220.57, the applicant without making any positive efforts to settle the liabilities, has approached this Tribunal by filing the above S.A without any bonafides. The grounds raised in the S.A also does not disclose the reason for the interference of this Tribunal, in the proceedings so far initiated. There is no violation of SARFAESI Act and Rules by the defendant while proceeding against the secured asset. The above S.A is devoid of merits and is liable to be dismissed with costs.

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The point arising for consideration is as to whether the applicant is entitled to get the reliefs sought for in this S.A.

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Point: The availment of overdraft facilities to the tune of Rs.2,40,00,000/- from the defendant bank in the year 2015 upon creation of equitable mortgage over the property bearing Sy Nos.169/510 and 169/51 measuring total extent of 8.90 Ares along with the building situated at Panangavu village, Kozhikode District has been admitted by the applicant in the SA. He has also admitted in the SA that since he could not pay the instalment amount regularly, the defendant issued the demand notice dated 27.4.2021, Annexure-B1, directing him to pay the outstanding loan due.

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Since the applicant failed to respond to the terms of the demand notice, Annexure-B1, possession notice dated 12.4.2022, AnnexureB2 was issued for taking symbolic possession of the secured asset. Subsequently sale notice dated 12.5.2022, Annexure-B3 was issued sale of the secured asset was not fructified for want of bidders.

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On application Annexure-A1 filed by the defendant, under Sec.14 of the SARFAESI Act, 2002 before the Ld. Chief Judicial Magistrate Court, Kozhikode, Order was passed appointing Advocate Commissioner for taking physical possession of the secured asset. Pursuant to the above order the Advocate Commissioner issued notice dated 25.3.2023 Annexure-A2 to the applicant informing him that he would take physical possession on 28.3.2023.

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The applicant filed W.P (C) No.5878/2023 before the Hon'ble High Court of Kerala challenging the order of the learned Chief Judicial Magistrate Court, Kozhikode passed in CMP No.2001/2022. The Hon'ble High Court of Kerala while granting ad-interim stay directed the applicant to deposit Rs.25 lakhs within six weeks. Since he failed to comply with the above direction, the writ petition was dismissed on 5.4.2023. The applicant has omitted to mention in the SA with regard to filing of W.P (C) No. 11127/2023 before the Hon'ble High Court of Kerala by his wife seeking for repayment of the entire

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Page 4 of 6

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SA No.194 of 2023

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amount in instalment. The above factum has been stated in the written statement filed by the defendant. It is seen from the perusal of judgment of the Hon'ble High Court of Kerala Annexure-B7 that no relief was granted and that writ petition was dismissed. Therefore the applicant has filed the SA before this Tribunal.

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The applicant has not pointed out in the SA as what are the procedural irregularities committed by the defendant in the measures initiated under the SARFAESI Act, and Rules made there under. He has also not specifically contended in the SA that the order passed by the Ld. Additional Chief Judicial Magistrate Court, Kozhikode is not in accordance with the mandatory requirements stipulated under Sec.14(1) of the SARFAESI Act, 2002. The applicant has not even produced the certified copy of the affidavit filed by the defendant under Sec.14(1) of the SARFAESI Act, 2002 and also the certified copy of the order passed by the Ld. Additional Chief Judicial Magistrate Court, Kozhikode. The Advocate Commissioner issued notice Annexure-A2 pursuant to the direction given to him in CMP No.2001/2022 by the Ld. Additional Chief Judicial Magistrate Court, Kozhikode. Therefore, Annexure-A2 notice cannot be challenged in any manner. The applicant who is a medical practitioner is running a 75 bedded hospital at Vattoli Bazar, Balussery, Kozhikode. He availed overdraft facility with a limit of Rs.2,40,00,000/-. But he committed default in repayment of the outstanding loan due. The direction given by the Hon'ble High Court of Kerala in the judgment Annexure-B6 for deposit of the amount was also not complied with by the applicant in letter and spirit. In any event the applicant has miserably failed to prove his case that he is entitled to get the relief sought for in the SA.

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In view of the foregoing reasons, this Tribunal holds that the applicant is not entitled to get the reliefs sought for in this SA. In the result, S.A No.194 of 2023 stands dismissed. No costs.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 26^th May, 2023.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 5 of 6

SA No.194 of 2023

List of documents filed by the Applicant along with the S.A.

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Sl. No.	Date	Particulars
1.	---	True copy of the petition filed by the defendant in CMP No.2001/2022 before the Chief Judicial Magistrate Court Kozhikode under Sec.14(1) of the SARFAESI Act, 2002.	Annexure-A1
2.	25.03.2023	True copy of the notice issued by the Advocate Commissioner Meera S. to the applicant.	Annexure-A2

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List of documents filed by the Defendant Bank along with the Written Statement

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SL. No.	Date	Particulars
1.	27.04.2021	True copy of Section 13(2) notice issued by defendant to the applicant.	Annexure-B1
2.	12.04.2022	True copy ofthe possession notice	Annexure-B2
3.	12.05.2022	True copy of the sale notice issued by defendant to the applicant	Annexure-B3
4.	21.02.2023	True copy of the interim order in W.P. (C)No.5878/2023.	Annexure-B4
5.	23.03.2023	True copy of the interim order in W.P. (C)No.5878/2023.	Annexure-B5
6.	05.04.2023	True copy of the judgment in W.P. (C) No.5878/2023.	Annexure-B6
7.	11.04.2023	True copy of the judgment in W.P. (C) No. 11127/2023.	Annexure-B7

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 6 of 6

K K Mohanan v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

K K Mohanan v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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