Dismissed

Ummer T a v. South Indian Bank

DRT19 Oct 2023SA/309/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application by borrowers challenging their bank's demand notice, possession notice, and Section 14 application. The court held that the authorized officer's issuance of notices was valid, the asset description did not vitiate matters, and the Magistrate Court complied with legal requirements.

What did the court decide?

Application dismissed with no costs awarded.

Ummer T a versus South Indian Bank — Banking and Recovery | 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 19^th DAY OF OCTOBER, 2023

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

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S.A No. 309 of 2023

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Between

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Ummer T.A., S/o. Ali, Tharamattathil House, Pinarmunda, Peringala, Ernakulam -683565.

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Siddique, S/o. Ali, Tharamattathil House, Pinarmunda, Peringala, Ernakulam -683565.

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--- Applicants

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And

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South Indian Bank Ltd, Door No.215, Aluva-Chitrapuzha Road, Opp. St. Mary’s Cathedral, Kumarapuram P.O., Pallikkara, Ernakulam, Represented by its Manager.

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Authorised Officer, South Indian Bank Ltd. Regional Office, Ernakulam, SIB Building, Info Park Road, Rajagiri Valley P.O., Kakkanad – 682 039. --- Defendants

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SA No.309 of 2023

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This Securitization Application coming on 04.08.2023 for final hearing before me in the presence of Mr. P. Srihari, Advocate for the Applicants and Mr. Anto Thomas Adipuzha, Advocate for the defendants 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 14.06.2023 seeking to call for all the records leading up to Annexure-A15 Order passéd by Addl. CJM Court, Ernakulam and declare that Annexure-A1 Demand Notice, Annexure-A6 Possession Notice, Annexure-A13 Section 14 application with affidavit, Annexure-A14 Section 14 Order and Annexure-A15 common Order in M.C. No.236/2023 on the file of Addl. Chief Judicial Magistrate Court, Ernakulam are invalid and illegal and set aside Annexure-A1 Demand Notice, Annexure-A6 Possession Notice, Annexure-A9 Notice issued by the Advocate Commissioner and Annexure-A14 order and Annexure-A15 order on the file of Addl. Chief Judicial Magistrate Court, Ernakulam and to direct the defendants to restore the possession of the property described in Annexure-A1 Demand Notice and A6 Possession Notice.

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The averments of the applicants in the SA in brief are as follows:

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The 1^st applicant had availed financial assistance by way of Over Draft facility from the defendant Bank to the tune of Rs.90 Lakhs on 06.03.2019. The 1^st applicant also was sanctioned with FITL loan of Rs.5,69,000/- on 14.09.2020. 1^st Applicant was also sanctioned with another Over Draft facility to the tune of Rs.46 Lakhs on 12.07.2019. The 1^st applicant also sanctioned with FITL loan of Rs.2,58,000/- on 14.09.2020. 2^nd applicant is one of the guarantors.

¶19

Since Covid-19 far flung, 1^st applicant could not pay the regular instalments in timely manner though he had remitted substantial amounts. The 2^nd defendant had issued demand notice dated 07.06.2021, Annexure-A1. Annexure-A1 demand notice was issued by the 2^nd defendant authorised officer which is per se illegal on the ground that a Demand Notice under Section 13(2) of the SARFAESI Act, could be issued only by the Secured Creditor. The amounts stated to be due in Annexure-A1 demand notice is as on 06.06.2021, which is totally incorrect. The 1^st applicant had remitted an amount of Rs.18,56,000/- on 27.12.2019 in the aforesaid over draft limit of Rs.90 Lakhs. In the year 2020 an amount of Rs.13,27,861.63 was also remitted. In the year 2021 further amount of Rs.13,69,265.79 was

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also remitted. The aforesaid remittances is evidenced by the statement of accounts for the period from 13.03.2019 to 17.11.2021. True copy of statement of accounts for the period from 13.03.2019 to 17.11.2021 is produced herewith as Annexure-A2.

¶23

1^st Applicant had remitted in the aforesaid over draft limit of Rs.46 lakhs, an amount of Rs.6,47,489.94 in the year 2019 and an amount of Rs.7,80,461/- and Rs.8,78,901.99 in the year 2021. True copy of statement of accounts with respect to over draft limit of Rs.46 Lakhs is produced herewith as Annexure-A3.

¶24

1^st Applicant had remitted an amount of Rs.6,08,759.63 as on 07.10.2021 in the term loan account No.47 and further amount of Rs.2,46,498.52 in the term loan account No.53. True copies of statement of accounts with respect to term loan account Nos.47 and 53 are respectively produced herewith as Annexure-A4 and A5.

¶25

The description of three items of properties scheduled in Annexure-A1 Demand notice are not correct. In all the three items of properties it is described that there are residential buildings. The first item of property having an extent of 3.45 Ares does not have a building in it and hence the descriptions stated in Annexure-A1 demand notice with respect to item No1 property is incorrect.

¶26

It is stated in Annexure-A1 demand notice that the aforesaid loan accounts were classified as NPA on 24.03.2021 with effect from 29.12.2020, which is illegal as it is against the guidelines issued by the RBI and against the orders passed by the Hon’ble Apex Court. Hon’ble Apex Court vide order dated 03.09.2020 in W.P (Civil) No.825/2020, W.P (C) No.476/2020 (X) etc. that the accounts which were not declared NPA till 31.08.2020 shall not be declared NPA ill further orders. The aforesaid order dated 03.09.2020 stood vacated only on 23.03.2021 while disposing of W.P (C) No.476/2020 (X) etc. Therefore, the defendants have no right to classify the loan accounts of the applicants as NPA on 24.03.2021 with effect from 29.12.2020.

¶27

2^nd Defendant had issued Possession Notice dated 24.11.2021 in taking possession of the properties described in Annexure-A1 demand notice. True copy of Possession Notice dated 24.11.2021 issued by the 2^nd defendant is produced herewith as Annexure-A6.

¶28

Assailing Annexure-A6 possession notice, applicants approached Hon'ble High Court by filing W.P (C) No. 27650/2021 and obtained order dated 04.12.2021, Annexure-A7. In Annexure-A7 order applicant was directed to deposit an amount of Rs.4,80,000/- which

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was in overdue in the Over Draft facility, on or before 31.12.2021. The said writ petition was disposed of vide judgment dated 06.06.2022, Annexure-A8. In Annexure-A8 judgment it is recorded that an amount of Rs.1,30,18,847/- was outstanding as on 04.02.2022 and the Hon'ble High Court of Kerala directed the applicants to pay the aforesaid amount in 20 equated monthly instalments commencing from 30.07.2022.

¶32

Thereafter, applicants had received a notice dated 05.05.2023, Annexure-A9 issued by the Advocate Commissioner in M. C. No.236/2023 on the file of the Additional Chief Judicial Magistrate Court, (MP’s and MLA’s), Ernakulam stating that the physical possession would be taken on 22.05.2023.

¶33

The applicants ought to have remitted an amount of Rs.71,60,365/- towards 11 equal monthly instalments, as per the direction in Annexure-A8 judgment. Though not regularly, applicants had remitted an amount of Rs.79,27,565/- in 11 months, which is in excess of Rs.7,67,200/- that ought to have been remitted in 11 equal monthly instalments as directed in Annexure-A8 judgment. In addition to the said remittances, the applicants also remitted an amount of Rs.4,80,000/- on 31.12.2021 pursuant to Annexure-A7 interim order in the aforesaid W.P (C) No. 27650/2021. True copy of statement of account for the period from 01.01.2022 to 02.02.2023 with respect to over draft account No.35 is produced herewith as Annexure-A10. True copy of statement of account for the period from 01.01.2022 to 31.03.2023 relating to Over Draft account No.29 is produced herewith as Annexure-A11.

¶34

Pursuant to the aforesaid remittances, the Over Draft account No.35, FITL loan Nos.47 and 53 were closed and the title documents with respect to second item of property described in Annexure-A1 demand notice and Annexure-A6 Possession notice was released. Thus, the remaining loan account is Over Draft account No.29 only.

¶35

Pointing out the aforesaid facts, applicants filed IA No.1/2023 in the aforesaid W.P (C) No. 27650/2021 seeking extension of time, which was declined by the Hon'ble High Court wide Order dated 09.06.2023, solely on the ground that the petition for extension of time was filed nearly one year after the judgment in W.P (C) No. 27650/2021 was delivered. True copy of the order dated 09.06.2023 in IA No.1/2023 in W.P (C) No. 27650/2022 is produced herewith as Annexure-A12.

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Assailing Annexure-A9 notice issued by the Advocate Commissioner, applicants filed W.P (C) No.15845/2023 which is pending and now stands listed to 14.06.2023. As the applicant has now understood that this reedy is before this Hon'ble Tribunal under Section 17 of the SARFAESI Act, and accordingly applicants have instructed their Advocate in the aforesaid W.P (C) No. 15845/2023 to withdraw the same on 14.06.2023.

¶39

True copy of Section 14 application and affidavit in M. C. No. 236/2023 on the file of Additional Chief Judicial Magistrate Court, (MP’s and MLA’s), Ernakulam are produced herewith and marked as Annexure-A13. True copy of Section 14 order dated 05.04.2023 in M.C. No. 236/2023 on the file of the Additional Chief Judicial Magistrate Court, (MP’s and MLA’s), Ernakulam is produced herewith as Annexure-A14. The defendants thereafter obtained common Order dated 24.05.2023 for police assistance and to break open the door. True copy of common Order dated 24.05.2023 in CMP Nos.2664/23 and 2665/23 in M.C. No.236/2023 on the file of Additional Chief Judicial Magistrate Court, (MP’s and MLA’s), Ernakulam is produced herewith as Annexure-A15.

¶40

Annexure-A13 Section 14 application with affidavit are signed and filed by one and the same person viz., Remya Krishnan, the authorized officer of the 1^st Defendant which is against the provision enunciated in Section 14 and therefore Annexure-A13 Section 14 application is invalid.

¶41

Annexure-A14 affidavit is invalid on the ground that the secured asset are not described in full and especially with respect to its boundaries and the buildings with its numbers assigned by the Local authority and the built-up area of the building, which is clear violation of Clause (iii) to First Proviso to Section 14(1). The 2^nd defendant in her Annexure-A14 affidavit failed to declare the remittances made after Annexure-A1 demand notice dated 07.06.2021, which is clear violation of Clause (iii) to First Proviso to Section 14(1).

¶42

The learned CJM who passed Annexure-A14 and A15 orders failed to examine the veracity of the declarations made in AnnexureA14 affidavit and failed to record the satisfaction of the declarations to be made it otherwise is to Clause (i) to (ix) to First Proviso to Section 14(1), which is violation of Second Proviso to Section 14(1). AnnexureA14 order passed in violation of principles of natural justice and hence Annexure-A14 order is illegal.

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SA No.309 of 2023

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The 2^nd applicant is a cancer patient and father of applicant’s living with the applicants is aged more than 76 is an ailing person due to several deceases and almost bedridden. Hence, if the applicants are physically dispossessed, they have no other abode and all family members will be put in streets. Under the above circumstances, the applicants are instituting this S.A.

¶46

The defendants came on record and filed Written Statement inter-alia contending as follows : The above S.A is not maintainable either in law or on facts and barred by the law of limitation.

¶47

On 06.03.2019 the applicants along with Mr. Ali and Mrs.Siji Ummer availed an Overdraft facility of Rs.90,00,000/- as per Loan A/c No. 0759081000000029 from the Pallikkara branch of the South Indian Bank Ltd after executing the necessary loan documents in favour of the Bank. The borrowers executed a Credit Facility Agreement in favour of the bank agreeing to repay the amount with interest, penal interest and other charges. Thereafter on 14.09.2020 they availed a FITL (Covid Moratorium) of Rs.5,69,000/- as per Loan Account No.0759656000000047 after executing the necessary loan documents in favour of the bank. They executed a Credit Facility Agreement in favour of the bank agreeing to repay the amount with interest, penal interest and other charges.

¶48

On 12.07.2019 they availed a Loan Against Property Overdraft facility of Rs.46,00,000/- as per Loan A/c No.0759081000000035 after executing the necessary loan documents in favour of the Bank. The borrowers executed a Credit Facility Agreement in favour of the bank agreeing to repay the amount with interest, penal interest and other charges. Thereafter on 14.09.2020 they availed a FITL (Covid Moratorium) of Rs.2,58,000/- as per Loan A/c No.0759656000000053 after executing the necessary loan documents in favour of the Bank. They executed a Credit Facility Agreement in favour of the bank agreeing to repay the amount with interest, penal interest and other charges.

¶49

As security for the aforesaid credit facilities, the 1^st applicant created hypothecation of contract receivables/work in progress covered by Power of Attorney. Further, the 2^nd applicant created equitable mortgage by deposit of title deeds over the property admeasuring (1) 3.45 Ares (Apprx.8.52 cents) of land with residential building thereon in Re. Sy.Nos.390/1-2, 386/7-3-5, Block No.36 of Kunnathunad village, Kunnathunad Taluk owned by the 1^st applicant

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covered under Sale Deed Nos.2637/2012 dated 07.05.2012 and 5396/2006 dated 27.7.2006 of SRO Puthencruz and (2) 3.36 Ares (Aprx.8.29 cents) of land with right of cartable way along with residential building thereon in Re. Sy.No.390/1-2-3, Block No.36 of Kunnathunad Village, Kunnathunad Taluk owned by 2^nd applicant, covered under Settlement deed No.128/2014 dated 06.01.2014 of SRO Puthencruz. They had also executed letters confirming deposit of title deeds in favour of the bank pursuant to the creation of mortgages as aforesaid.

¶53

The borrower was a Government Contractor, who undertakes work under various Government Department. The OD contractor limit is sanction based on his projected wok. But the Drawing Power is derived based on 75% of the govern work contracts secured. The government shall issue a bill on the due date which can be discounted with the banks. Here, there may be delay in completion of work due to COVID. But never there is a delay in payment of the work is undertaken as per stipulation. The loss, if any caused due to COVID is negligible. The borrower had opened another limit with Kerala Gramin Bank and have diverted the sale proceeds through the said account. The said act is construed as “Diversion of Fund” and bank is in process of classifying the account as fraud account in terms of RBI circular in this regard.

¶54

The borrowers and guarantors defaulted the repayment of the aforesaid credit facility and accordingly, the bank had declared the said loan accounts as NPA on 24.03.2021 (i.e after the moratorium was lifted by Hon’ble Supreme Court upto 23.03.2021) with effect from 29.12.2020. The bank classified the account as NPA as per RBI guidelines and also following the Hon’ble Supreme Court verdicts. Subsequently, the bank initiated recovery proceedings under the provisions of the SARFAESI Act. Annexure-A1 demand notice dated 07.06.2021 under Section 13(2) of the SARFAESI Act, was issued to the borrower and guarantors calling upon them to pay a total amount of Rs.1,46,60,653.65 (in the 4 accounts) as on 06.06.2021 due to the bank plus further interest, within 60 days from the date of receipt of the notice. The demand notices were duly received by them. The borrowers and guarantors never approached the bank after receiving the demand notice nor have they submitted any statutory representation under Section 13 (3A) of the SARFAESI Act.

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The amounts remitted by the borrowers/guarantors were properly credited to the accounts. The amount claimed in the 13(2) demand notice is correct and the same is excluding the capitalised penal interest. There is no illegality in issuing the Demand Notices by

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the Authorised Officer of the Bank as defined under Rule 2(a) of the Security Interest (Enforcement) Rules, 2002 by virtue of Section 13(12) of the SARFAESI Act, which states that the rights of the secured creditor under the Act may be exercised by one or more of his officers authorized in this behalf in such manner as may be prescribed. The 1^st applicant had remitted an amount of Rs.18,56,000/- as on 27.12.2019 in the overdraft limit of Rs.90 Lakhs and in the year 2020 an amount of Rs.13,27,861.63 was also remitted and in the year 2021 further an amount of Rs.13,69,265.79 was also remitted. Anyhow, any of these contentions are not relevant as the account as on then was not an NPA account. Also, the said remittances cannot be considered as remittances or principle repayment as the account was an Overdraft limit wherein remittance as well as withdrawals were permitted. Hence the latter contention is baseless and holds no ground.

¶59

The averment that the 1^st applicant had remitted in the aforesaid over draft limit of Rs.46 Lakhs, an amount of Rs.6,47,489.94 in the year 2019 is correct and an amount of Rs.7,80,461/- and Rs.8,78,901.99 in the year 2021 is correct.

¶60

The averments contained therein are not fully correct and hence denied. The averment that the 1^st applicant had remitted an amount of Rs.6,08,759.63 as on 07.10.2021 in the term loan account No.47 and the averment that further amount of Rs.2,46,498.52 in the term loan account No.53 is correct. The borrower had opened another limit with Kerala Gramin Bank and have diverted the sale proceeds through the said account. The said act is construed as “Diversion of Fund” and bank is in process of classifying the account as fraud account in terms of RBI circular in this regard. In such circumstance it is incorrect to say that the officer concerned of the defendant Bank also agreed that time will be granted to regularize the loan account.

¶61

The outstanding amounts claimed in Annexure-A1 demand notice reflects the actual loan arrears (as on the date of the demand notice) due from the borrowers/guarantors. There is no material incorrectness in the description of secured assets in Annexure-A1 demand notice. Moreover no prejudice whatsoever is caused to the borrowers/applicants due to description of the secured assets contained in the demand notice. The secured assets are properly identifiable from the descriptions and from the boundaries mentioned/ given in the demand notice.

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The borrower and guarantor defaulted the repayment of the aforesaid credit facilities and accordingly, the bank had declared the said accounts as NPA on 24.03.2021, with effect from 29.12.2020, after the order of the Hon’ble Apex Court in Small Scale Industrial Manufactures Association vs. Union of India & others (judgment dated 23.03.2021 in W.P (C) No. 476/2020). Hence there is no violation of the judgment of the Hon’ble Supreme Court in Gajendra Sharma vs. Union of India & another (judgment dated 27.11.2020 in W.P (C) No. 825/2020.

¶65

The borrowers and guarantors had not settled the outstanding dues in the loan account even after issuing/receiving the Demand notice. The 2^nd defendant took symbolic possession of the secured immovable property on 24.11.2021 by issuing Annexure-A6 possession notice under Section 13(4) of the SARFAESI Act, read with Rue 8(1) of the Security Interest (Enforcement) Rules. The possession notice was issued to the borrowers and guarantors through registered post with AD on 26.11.2021. The possession notice was received by them. The possession notice was published on 27/11/2021 in two leading newspapers one in vernacular language having sufficient circulation in that locality namely; New Indian Express and Mathrubhumi Dailies, by the defendant. The possession notice was affixed in the secured asset on 24.11.2021. The defendants strictly complied with the provisions of the SARFAESI Act, 2002 and the Security Interest (Enforcement) Rules, 2002.

¶66

An amount of Rs.1,30,18,847/- was outstanding in the loan accounts as on 4.2.2022 and as per Annexure-A8 judgment, the Hon'ble High Court of Kerala directed the borrowers to repay the same in twenty (20) equated monthly instalments starting from on or before 30.07.2022 and subsequent instalments on or before the last working day of every succeeding month provided in the event of default of any one instalment, the respondent bank shall be entitled to proceed in accordance with law. The applicants and guarantors failed to fully comply with the directions in Annexure-A8 judgment of the Hon'ble High Court of Kerala. The borrower had made repayment for the month of July and August, 2022 and thereafter failed to stick on to schedule fixed by the Hon'ble High Court.

¶67

The defendants filed Annexure-A13 M. C. No. 236/2023 before the Additional Chief Judicial Magistrate Court, (MP’s and MLA’s), Ernakulam under Section 14 of the SARFAESI Act. The 2^nd defendant had also filed affidavit strictly in compliance with Section 14(1) of the SARFAESI Act. Annexure-A13 application and the affidavit accompanying thereon were filed by the Authorised Officer of the bank

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in accordance with Section 14 read with Section 13(12) of the SARFAESI Act, and there is no illegality in filing both the petition and affidavit by the same authorized officer. The learned Additional CJM passed Annexure-A14 order dated 05.04.2023 after fully appreciating the case of the defendants and rightly appointed an Advocate Commissioner to take physical possession of the secured asset. There is no violation of the principles of natural justice in passing AnnexureA14 and A15 order. The borrowers/guarantors have no right to be heard while passing Annexure-A14 and A15 order. In turn the Advocate Commissioner issued Annexure-A9 notice dated 05.05.2023. Subsequently, as per Annexure-A15 common order dated 24.05.2023 the learned Additional CJM has granted an order of police assistance and to break open the door of the building in the secured asset owned by Ummer T.A and allowed police assistance in taking possession of properties owned by Ummer T.A and Siddique T.A.

¶71

The applicants have not challenged Annexure-A6 possession notice dated 24.11.2021 within time. Hence there is no point in challenging Annexure-A14 order passed by the learned Addl.CJM and the consequent Annexure-A9 notice issued by the Advocate Commissioner. The challenge against the possession notice and order of the learned CJM are barred by limitation. An amount of Rs.82,46,337.28 is due to the bank in the Overdraft A/c No.0759081000000029. True copy of the Statement of Account of Overdraft A/c No. 0759081000000029 is produced as Annexure-B1. Therefore, this Hon'ble Tribunal may be pleased to dismiss the S.A. with costs.

¶72

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

¶73

Point: The availment of various credit facilities from the 1^st defendant Bank is admitted by the applicants. The averments of the defendants with regard to hypothecation of contract receivables/work in progress by the 1^st applicant and creation of equitable mortgage by deposit of title deeds over the property admeasuring (1) 3.45 Ares (Apprx.8.52 cents) of land with residential building thereon in Re. Sy.Nos.390/1-2, 386/7-3-5, Block No.36 of Kunnathunad village, Kunnathunad Taluk owned by the 1^st applicant covered under Sale Deed Nos.2637/2012 dated 07.05.2012 and 5396/2006 dated 27.7.2006 of SRO Puthencruz and (2) 3.36 Ares (Aprx.8.29 cents) of land with right of cartable way along with residential building thereon in Re. Sy.No.390/1-2-3, Block No.36 of Kunnathunad Village, Kunnathunad Taluk owned by 2^nd applicant, covered under Settlement deed No.128/2014 dated 06.01.2014 of SRO Puthencruz is

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not refuted or denied by the applicants. According to the defendants, since the applicants defaulted in repayment of the outstanding loan due, loan accounts were declared as Non-Performing Asset on 24.03.2021 with effect from 29.12.2020. It is the contention of the defendants that the accounts were classified as Non-Performing Asset only after the moratorium upto 23.03.2021 was lifted by the Hon’ble Supreme Court. A perusal of Annexure-A1 demand notice shows that the loan accounts of the applicants came to be classified as NPA on 24.3.2021 with effect from 29.12.2020. Thus it is evident that the loan accounts of the applicants came to be classified only on 24.03.2021 and not on or before 31.08.2020 during which period the order of the Hon’ble Supreme Court passed in W.P (C) No. 825/2020, W.P (C) No. 476/2020 (X) had been in force. Hence the contention of the counsel for the applicants that the classification of the loan account as on 24.03.2021 with effect from 29.12.2020 against the orders passed by the Hon’ble Supreme Court in the aforesaid writ petitions does not hold good.

¶77

Demand notice, Annexure-A1 was served to the applicants calling upon them to repay the outstanding loan due within 60 days from the date of receipt of the notice. Receipt of demand notice is admitted by the applicants. The counsel for the applicants submitted that the amounts stated in Annexure-A1 demand notice as on 06.06.2021 is totally incorrect and that subsequent remittance made by the applicants to the loan accounts as per Annexures-A2 to A5, copies of statement of accounts, was not mentioned in the demand notice and that the demand notice issued by the 2^nd defendant, who is the authorised officer is per se illegal since demand notice under Section 13(2) of the SARFAESI Act, 2002 could be issued only by the secured creditor. The counsel appearing for the defendants submitted that the amounts remitted by the applicants were properly credited to their loan accounts and that the amount claimed in the demand notice is correct and that the remittances made by the applicants cannot be strictly considered as remittances or principal repayments since the account was an overdraft limit wherein remittance as well as withdrawal were permitted and that the demand notice issued by the authorised officer of the bank is valid as per Rule 2(a) of Security Interest (Enforcement) Rules, 2002 r/w Section 13(12) of the SARFAESI Act, 2002.

¶78

A perusal of copies of statement of accounts, Annexure-A2to A5 shows that the amounts were remitted by the applicants on various dates are clearly reflected. The applicants have not specifically averred as to which payment made by them was not given to the loan accounts. The applicants did not send any objection or representation

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to the 1^st defendant that the payments made by them were not credited. Therefore, the contention of the applicant that payments made by them were not credited to the loan account is untenable.

¶82

Admittedly, Annexure-A1 demand notice has been issued by the 2^nd defendant, who is the authorised officer of the 1^st defendant bank. As rightly submitted by the counsel for the defendants as per Rule 2(a) of the Security Interest (Enforcement) Rules, 2002 r/w Section 13(12) of the SARFAESI Act, 2002, the rights of the secured creditor under the Act may be exercised by one or more of its officers authorized in this behalf in such manner as may be prescribed. Hence the contention of the applicants that demand notice is per se illegal as it has been issued by the 2^nd defendant is also untenable.

¶83

It is submitted by the counsel for the applicants that the description of three items of the properties scheduled in Annexure-A1 demand notice are not correct, since it is described in all the three items of the properties, there are residential buildings and that but in the first item of the property, there is no building. The counsel appearing for the defendants would submit that there is material incorrectness in the description of the scheduled assets in AnnexureA1 demand notice and that no prejudice could have caused to the applicants due to the description of the secured asset with existence of the building in the demand notice. Admittedly, in Annexure-A1 demand notice in schedule-B item No.1 to 3 properties are mentioned wherein the existence of residential building is not mentioned in item No.1 property. Even assuming for arguments sake that the first item of the property does not have a building, such wrong description of the property could not have caused any prejudice to the applicants, since they are quite aware of the fact that the properties mentioned under Schedule-B of the demand notice have been mortgaged by them with the 1^st defendant bank. Hence, such trivial commission of mistake in respect of description of the property will not vitiate the demand notice as invalid.

¶84

The issuance of possession notice dated 24.11.2021, AnnexureA6 is not specifically challenged in the SA, though one of the reliefs sought for by the applicants in the SA is to restore possession of the properties mentioned in the demand notice, Annexure-A1. AnnexureA6 possession notice was issued on 24.11.2021. The applicants did not file the SA challenging the possession notice within the period of 45 days from the date of issuance of Annexure-A6. The defendants have averred in their written statement that possession notice was served to the borrowers and guarantors and that it was received by them and that it was published in two leading news papers and that it

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was also affixed in the secured asset. The above averments of the defendants is also not specifically refuted or challenged by the applicants. Hence the relief sought for by the applicants to restore the possession of the secured asset mentioned in Annexure-A6 demand notice is unsustainable.

¶88

In Annexure-A13 petition and affidavit filed under Section 14 of the SARFAESI Act, 2002 one Remya Krishnan has signed in the capacity of the Authorised Officer of the 1^st defendant Bank. As already observed as per Rule 2(a) of the Security Interest (Enforcement) Rules, 2002 r/w Section 13(12) of SARFAESI Act, 2002, the rights of the secured creditor under the Act may be exercised by one or more of its officers authorized in this behalf in such manner as may be prescribed. Hence the submission of the counsel for the applicants that Annexure-A13 petition and affidavit are illegal on the aforesaid ground does not hold good.

¶89

In Annexure-A13 affidavit the details such as availment of various credit facilities by the applicants upon creation of security interest over the immovable properties by deposit of title deeds as well as hypothecation of the contract receivables/work in progress covered by power of attorney, the description of the secured assets with its extent sand survey numbers, the particulars of sale deeds, execution of letter confirming the deposit of title deeds by the applicants, registration of the mortgage with CERSAI, default of the applicants in repayment of the outstanding loan due, classification of loan account as Non-Performing Asset, the total outstanding amount as on the date of Non-Performing Asset, issuance of demand notice to the applicants, proof of service of demand notice to the applicants, failure of the applicants to discharge their liability even after receipt of the demand notice, various payments made by the applicants and credit of the same to the loan accounts, secured assets free of tenancy or leasehold, the total amount due to the 1^st defendant Bank as on the date of filing of the affidavit are clearly stated. Even though, in the affidavit, Annexure-A13 the buildings in the lands are described, there is no mention with regard to the boundaries of the properties. However, the boundaries have been furnished in the schedule to the petition, Annexure-A13.

¶90

A perusal of Annexure-A14 common order passed by the learned Additional Chief Judicial Magistrate Court, (MP’s and MLA’s), Ernakulam in M.C. No. 236/2023 shows that the learned Additional Chief Judicial Magistrate Court, (MP’s and MLA’s), Ernakulam after having perused the contents of the affidavit and the documents and after having satisfied over the same, passed over for taking physical

¶91

Page 13 of 16

¶92

SA No.309 of 2023

¶93

possession of the secured asset. This Tribunal does not find any infirmity or flaw in the above order. Pursuant to the above order, the Additional Chief Judicial Magistrate Court, (MP’s and MLA’s), Ernakulam passed common order in CMP Nos.2664/23 and 2665/23 in M.C. No. No.236/2023 permitting the Advocate Commissioner to take physical possession of the secured breaking open the door of the property, if necessary. In order to comply with the above direction, the Advocate Commissioner issued notice, Annexure-A9 to the applicants informing them that he would take physical possession of the secured asset on 22.05.2023. Therefore the above notice is not challengeable in any manner.

¶94

In view of the foregoing reasons and discussions, this Tribunal holds that the applicants have miserably failed to prove their case so as to get the reliefs sought for in the SA.

¶95

In the result, S.A No.309 of 2023 stands dismissed. No costs.

¶96

Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 19^th October, 2023.

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/

Page 14 of 16

SA No.309 of 2023

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

¶103

Sl. No.	Date	Particulars
1.	07.06.2021	True copy of demand notice issued by the 2^nd defendant.	Annexure-A1
2.	---	True copy of statement of accounts for the periodfrom 13.03.2019 to17.11.21	Annexure-A2
3.	---	True copy of statement of accounts with respect to overdraftlimit of Rs.46Lakh	Annexure-A3
4.	---	True copy of statement of accounts with respect to term loanaccountNo.47	Annexure-A4
5.	---	True copy of statement of accounts with respect to term loanaccountNo.53	Annexure-A5
6.	24.11.2021	True copy of possession notice issued by 2^nd defendant.	Annexure-A6
7.	04.12.2021	True copy of order in W.P (C) No. 27650/2021.	Annexure-A7
8.	06.06.2022	True copy of judgment in W.P (C) No. 27650/2021.	Annexure-A8
9.	05.05.2023	True copy of notice issued by the Advocate Commissioner in M. C. No.236 of 2023 on the file of Additional Chief Judicial Magistrate Court, (MP’s and MLA’s),Ernakulam.	Annexure-A9
10.	---	True copy of statement of account for the period from 01.01.2022 to 02.02.2023 with respect to over draft accountNo.35	Annexure-A10
11.	---	True copy of statement of account for the period from 01.01.2022 to 31.03.2023 with respect to over draft accountNo.29	Annexure-A11
12.	09.06.2023	True copy of order in IA No.1/2023 in W.P(C)No. 27650/2021.	Annexure-A12
13.	---	True copy of Sec.14 application and affidavit in M. C. No.236/2023 on the file of Additional Chief Judicial Magistrate Court, (MP’s and MLA’s), Ernakulam.	Annexure-A13
14.	05.04.2023	True copy of Sec.14 Order in M. C. No.236/2023 on the file of Additional Chief Judicial Magistrate Court, (MP’s andMLA’s),Ernakulam.	Annexure-A14