Dismissed

U G Kanagaraj v. Canara Bank

DRT30 Nov 2023SA/452/2022

Case brief

AI extract

What is this about?

In this SARFAESI application, the applicant challenged a possession notice issued by Canara Bank for recovery of dues. The applicant alleged procedural irregularities regarding NPA classification and notice service. The Tribunal found the bank's procedure lawful and no infirmities were made out, dismissing the application without costs.

What did the court decide?

The SARFAESI application was dismissed without costs. All pending interim orders were vacated and other pending applications were closed.

U G Kanagaraj versus Canara Bank — Banking and Recovery | DRT (2023)

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S.A.452 of 2022 30.11.2023

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 30^th day of November, 2023

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Present: Shri Ganapathi K.R.K.

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Presiding Officer

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SARFAESI APPLICATION No. 452 of 2022

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Mr. U.G. Kanagaraj, S/o. Gurusamy, No.2B/5-6, Anna Street, Tejas Sunny Crest Apartment, Thiruvallur. …. Applicant

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The Authorized Officer, Canara Bank, Thiruvalluvar Branch, No.168, J.N. Road, Thiruvallur – 602 001 ….Respondents

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Counsels on record / appeared:

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Counsel for Applicant : M/s. J. Prince Counsel for Respondent Bank : M/s Akshai Mani

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ORDER

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This SA is filed by applicant challenging the Possession Notice dated

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08.09.2022, issued by respondent bank, for recovery of a sum of Rs.41,83,602/-.

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Heard Ld. counsels appearing for respective parties.

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It is the case of applicant that he had availed financial assistance from respondent bank to the tune of Rs.42 lakhs and was regular in repayment of instalments without any delay or default. It is the case of applicant that due to impact of Covid-19 pandemic, applicant’s business was impacted and therefore account fell in arrears, consequent upon which the account is declared as NPA and respondent bank had

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S.A.452 of 2022 30.11.2023

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issued Demand Notice dated 15.06.2022 calling upon the applicant to pay a sum of Rs.41,83,602.20p followed by the subject impugned possession notice dated 08.09.2022.

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Applicant had raised the following grounds in the SA:

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(i) Date of classification of loan account as NPA is not intimated by respondent bank to applicant and the said classification is contrary to RBI guidelines:

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(ii) Respondent bank failed to serve Demand Notice and Possession Notice to all parties

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(iii) Respondent bank failed to affix and publish the Possession Notice as mandated under the Act.

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Whereas respondent bank had put up appearance and filed their counter and typed set of documents evidencing their actions. Ld. counsel appearing for respondent bank submitted that as applicant along with his wife Smt. K. Vijayalakshmi as coborrower and Sh. G. Subbaiah, as Guarantor had availed (i) Home Loan facility to the tune of Rs.16,85 lakhs on 18.03.2016, (ii) MSME OD facility to the tune of Rs.20 lakhs on 03.04.2021 availed by M/s GK Car Zone, a proprietorship concern represented by its Proprietor U.G. Kanakaraj, applicant herein, (iii) MSME OD facility to the tune of Rs.10 lakhs on 03.04.2021 availed by M/s GK Tyre Shoppe, a proprietorship concern represented by its Proprietor U.G. Kanakaraj, applicant herein and executed necessary loan and security documents in favour of respondent bank. As borrowers failed to repay the dues and committed default, respondent had classified the loan accounts as NPA

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S.A.452 of 2022 30.11.2023

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on 25.05.2022 and issued Demand Notice dated 15.06.2022, which was duly served to all parties, as evidenced from acknowledgment cards filed along with typed set of documents. It is further submitted that Demand Notice was also affixed in the secured asset and published in two newspapers viz., The New Indian Express and Dinamani on 25.06.2022. Ld. counsel for respondent bank submitted that despite receipt of Demand Notice, as borrowers did not come forward to repay the dues, respondent proceeded further and took symbolic possession on 08.09.2022 and Possession Notice was duly sent to all parties. Notice sent to borrower and co-borrower returned as ‘left’, while notice was duly served to guarantor (copy of returned covers and acknowledgment cards produced). Possession Notice was also affixed at the conspicuous place of the secured asset and published in ‘The New Indian Express’ and ‘Dinamani’ on 10.09.2022 as evidenced from the typed set of documents filed along with counter. Ld. counsel for respondent bank submitted that there are no infirmities in the procedure adopted by the respondent while issuing the subject impugned Possession Notice and prayed for passing necessary orders.

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On perusal of records, although Possession Notice sent to applicant returned as ‘left’, as applicant had already filed the same in original in this SA, Possession Notice is duly served on applicant.

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From the foregone submissions of both parties, as applicant could not make out any tenable infirmities in the procedure adopted by respondent bank while issuing the subject impugned possession notice, this SA is liable to be dismissed. Further,

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S.A.452 of 2022 30.11.2023

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respondent bank had established its procedure while issuing the impugned Possession

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Notice, which are found to be in accordance to law.

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Accordingly, this SA is dismissed, however without costs. Interim order, if any granted and subsisting till this day stands vacated and all other IAs, if any pending stand closed.

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With the above observations, 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 30^th day of November, 2023)

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Sd/-

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(GANAPATHI K.R.K) PRESIDING OFFICER

U G Kanagaraj v. Canara Bank

Case brief

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U G Kanagaraj v. Canara Bank

Case brief

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