Dismissed

Ms Nandhini Bakery and Sweets Rep by Viswanathan Narayanan v. Sbfc Finance Private Limited Erstwhile Smal Business Fincredit India Private Limited

DRT16 Jun 2023SA/37/2022

Case brief

AI extract

What is this about?

A securitization application challenging possession measures taken under the SARFAESI Act was dismissed. The Tribunal found the respondents satisfied procedural requirements regarding notice service and publication as well as their entitlement to act under a valid Gazette Notification.

What did the court decide?

Securitization Application dismissed; all pending interim applications closed.

Ms Nandhini Bakery and Sweets Rep by Viswanathan Narayanan… — Banking and Recovery | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 16^th day of June, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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SA No.37 of 2022

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M/s Nandhini Bakery and Sweets Represented by its Proprietor Viswanathan Narayanan D. No.12, Rangaswamy Pillai Street S.F. No.6/1A/1A/4, Opposite to Andal Nursing Home Hosur Town, Krishnagiri District Tamil Nadu – 635 109 …Applicant

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Versus

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SBFC Finance Private Limited (Erstwhile Small Business FinCredit India Private Limited) No.58, 1^st Floor, Lakshmipuram CMH Road, Halasuru, Bangalore – 560 008 Karnataka

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…Respondent

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Counsel for the Applicant : Mr. V. Arvind Rajagopal Counsel for Respondent : M/s L. Surya Associates

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FINAL ORDER

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The applicant had filed this Securitization Application (SA) filed under section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (herein after been referred as SARFAESI Act or the Act as the case be challenging the possession notice.

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The case of the applicant as stated in the SA can be encapsulated as follows:The respondent had sanctioned a credit facility for Rs.30,00,000/-. It is also admitted that a security Interest is created over the schedule properties. The applicant further admits the defaults occurred in the account pursuant to which

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the applicant approached the respondent seeking restructuring of the facility. It is further alleged by the applicant that even as the applicant approaching the respondent; the respondent had affixed the impugned possession notice.

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In regard to the measures, the applicant contents that the demand notice as mentioned in the impugned possession notice is not served on the applicant. The applicant further contents that the possession notice was not published as required under the Act. Along with the SA, the applicant had produced the following documents: -

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(i) Facility agreement

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(ii) Memorandum of entry for creation of mortgage

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(iii) Hospital discharge summery and death certificate of the applicant’s father.

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(iv) Possession notice.

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On the basis of above contentions and documents, the applicant sought for setting aside the measures leading to the impugned possession notice.

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The respondent entered appearance and filed their counter denying the averments as made in the SA. It is contented by the respondent that they had scrupulously followed the procedure as envisaged under the statute. The particulars as to the disbursement and creation of security interest all are set forth in detail in the counter. The contention of the applicant as to the alleged non-service of the demand notice is also denied by the respondent. The respondent further submits that the possession notice is also issued in confirming with the provisions of the act. Along with the counter, the respondent had produced the following documents viz., CERSAI report, Demand notice along with its proof issuance, Postal track record along with

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returned covers, Proof of publication of demand notice, Possession notice along with proof of despatch and Proof of publication and proof of affixture of the possession notice.

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Heard the Ld. Counsel for both sides and considered the rival contentions. In the light of pleading the only issue that is to be gone into and decided is as to the legality of the procedure that is followed by the respondent in the measures leading to impugned possession notice.

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However at the time of hearing an additional affidavit was sworn in by the applicant as to the entitlement of the respondent in initiating and continuing the measures under the Act. In view of the same an additional issue is also gone into as to the entitlement of the respondent in initiating and continuing the measures.

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Both these issues had been gone into and decided together. The applicant though admitting the creation of security interest in lieu of the credit facility, and defaults occurred in the account, is impugning the measures primarily contenting that there is no service demand notice. This contention is successfully rebutted by respondent by producing the proof as to the issuance of demand notice, its returned cover, track report and the paper publication.

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The specific contention of the applicant as to the non-publication of the possession notice is also rebutted by the respondent as paper publication of the impugned possession notice is produced along with the typeset of documents.

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Hence on consideration of the documentary evidence as produced by the respondent, it is crystal clear that the contention of the applicant as to the noncompliance of Rule 3 and 8(2) are successfully rebutted by the respondent.

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In reply to the contention of the applicant as to entitlement of the respondent to initiate and continue the measures, the respondent had along with the memo dated 4.5.2022 (SR No.3086) produced Gazette Notification dated 12.2.2021 by the Ministry of Finance evidencing their entitlement to initiate and continue the measures.

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In view of the findings as entered in aforementioned discussions this Tribunal came to the conclusion that none of the contentions as raised by the applicant in this SA is having any merit init. The only conclusion that can follow on the basis of above finding is that the SA is liable to be dismissed.

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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.

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(Dictated to PS, transcribed by him, corrected, signed and pronounced by me in Open Court on this the 16^th day of June, 2023)

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

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Ms Nandhini Bakery and Sweets Rep by Viswanathan Narayanan v. Sbfc Finance Private Limited Erstwhile Smal Business Fincredit India Private Limited

Case brief

What is this about?

What did the court decide?

Ms Nandhini Bakery and Sweets Rep by Viswanathan Narayanan v. Sbfc Finance Private Limited Erstwhile Smal Business Fincredit India Private 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

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