Dismissed

Sri Gopinath Rao Miraskar v. Bank of Baroda (Vijaya Bank)

DRT17 Oct 2023SA/489/2023

Case brief

AI extract

What is this about?

The Appellant appealed against a possession notice issued under the SARFAESI Act, claiming the bank failed to process objections regarding recovered deposits. The Court held that the bank complied with statutory requirements, the reply notice was defective, and the appeal lacked merit.

What did the court decide?

The appeal SA No. 489/2023 is dismissed. Interim orders stood vacated. No order as to costs.

Sri Gopinath Rao Miraskar versus Bank of Baroda (Vijaya Bank) — Banking and Recovery | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL-I, KARNATAKA AT BENGALURU

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Dated this the day 17th of October,2023

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Present: Sri Imtiaz Ali

Presiding Officer

SA No. 4A9/2O23

BETWEEN:

Sri Gopinatha Rao Miraskar S/o. Sri Chinnoji Rao Aged about 47 years R/at No.76, Ramrao Layout Opp. Malleshwaram Railway Station Bengaluru 560 003

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... APPELLANT

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AND:

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Bank of Baroda (Erstwhile Vijaya Bank) Represented by its Authorised Officer And Chief Manager Branch Office1Oth Cross Branch Ma lleshwa rm Bengaluru 560 003 Counsels on record/apoeared for: Appellant : Sri Amaranath Respondent : Sri Vignesh Shetty

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... RESPONDENT

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FINAL ORDER

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The Appellant has filed an Appeal under Section 17 of the SARFAESI Act, 2002 seeking for quashing/setting aside the possession notice dated 03.09.2020 issued by the Respondent Bank and all further proceedings pursuant there to in respect of

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SA No.489/2023

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the schedule property for recovery of Rs.66,81,697.25 from

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the Appellant with further interest thereon, charges, costs, etc.

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The facts of the case of the Appellant in a nutshell are, the Appellant had availed Housing Loan of Rs.54 lakhs and Rs.1O lakhs respectively, from the Respondent by mortgaging the immovable property as mentioned in the schedule A to C of the main appeal.

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The Appellant stated that, the Appellant has paid a sum of Rs.14.00 lakhs to the Respondent Bank through installment. As the Appellant wished to pay the Remaining amount regularly but by the time Covid-19 pandemic started and business and rentals to the Appellant came to be stand still. In the mean time, the Respondent Bank has issued a demand notice dated O2.O3.2O20 under section 13(2) of SARFAESI Act, 2002. For that, the Appellant through his Counsel sent a reply to the said above demand notice issued by the Respondent Bank. But the Respondent bank did not reply whether objection is not acceptable or tenable within 15 days of receipt of objection or representation with reasons as per section 13(34) of SARFAESI Act, 2002. Thereafter, the Respondent Bank has issued the

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SA No.489/2023

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possession notice dated 03.09.2020 under section 13(4)^r-rf SARFAESI Act, 2002. Further, in the alleged^possession notice, the Respondent has stated that a sum of Rs.66,81,697l- is due as on 28.02.2020^plus interest, thereon at the contractual rate plus cost, charges and expenses till the date of payment under section 13(4) of SARFAESI Act, R/w Rule B of the Security Interest (Enforcement) Rules 2002 which is wrong, illegal and arbitrary. After representation or objection to demand notice under section 13(2) of SARFAESI Act 2OO2, the Respondent Bank either accept or reject the representation or objections artd communicate it to the Appellant under section 13(34) of SARFAESI Act, 2002. It is further submitted that though Housing credit facility of Rs.54,00,000/- and Rs.10,00,000/- was availed by the Appellant but on the other hand, the Appellant had remitted sum of Rs.14,00,000/- as against the Housing Credit of Rs.54,00,000/- and Rs.10,00,000. It is submitted that by virtue of the aforesaid transaction, the Bank has received substantial interest and mad'e profit out of it. However, the Bank now wanted to dispossess the Appellant from the secured asset so as to see that the entire amount due as alleged shall be recovered in one lump sum. In the light of the foregoing

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5A No.489/2023

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contentions and the grounds urged, the Appellant has sought to allow the present appeal memo as prayed for.

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Upon service of notice, the Respondent Bank entered appearance through its Counsel and subsequently filed detailed statement of objections to the appeal. According to the Respondent Bank, the present application is not maintainable either in law or in facts and the same is liable to be dismissed. The present application is based on gross suppression of material facts, misrepresentation and is a malafide attempt on the part of the Appellant from restraining the Respondent Bank.

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The Respondent Bank had sanctioned Housing Loan facilities of Rs.54,00,000/- vide loan A/c. No.11390835tOOOt42 and for Rs.10,00,000/- vide loan A/c. No.113908351000152 to the borrower. The borrower had also executed various loan documents including mortgage documents in this regard by depositing the title of the properties in the schedule of the said application by executing a Memorandum of deposit of title deed as a primary and collateral security in repayment facility availed by the Appellant and the Memorandums of mortgage was created on 78.O4.2Ot7 and 01.08.2017.

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SA N0.489/2023

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The Respondent Bank has contended that, the borrolver duly enjoyed the said loan facilities but failed and neglected to make^payment of the EMIs as^per the terms and conditions in the loan agreement. Thereafter, the said loan account of the Appellant was classified as Non-Performing Asset on 29.O2.2O2O as per the guidelines of the RBL Finding no other alternative, tirr: Respondent Bank has issued the demand notice dated O2.O3.2O2O under section 13(2) of the SARFASEI Act, 2002 calling upon the borrower to clear the outstanding loan amount of Rs.66,81,697.25 due within 60 days. The said demand notice was duly received by the said borrower/g uara ntor. Thereafter, flre Respondent Bank has issued the possession notice dated 03.09.2020 under section 13(4) of SARFASEI Act,2OO2 and took symbolic possession of the secured property. The said possession notice was also affixed on the conspicuous paft of the schedule property. After taking symbolic possession of the secui.eri property, the Respondent Bank has published the possession notice in two leading newspapers namely^..The New Indian Express", English daily and "Kannada prabha,, Kannada daily both on 08.09.2020.

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SA N0.439/2023

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The Respondent Bank further contended that, the

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Appellant is making up false, baseless allegations as and by way of afterthought, in an attempt to keep the subject property out of the process initiated against the Appellant under the Act of 2002. No lawful or valid ground has been or could be made by the Appellant in support of his purported reliefs. Every steps and actions till date initiated by the Respondent Bank is under due process of law to recover its dues which is in the aggregate as on 28.02.2020 is Rs.66,81,697.25 and interest at 8.9olo and B.65orir from 28.02.2020 till date of realization. The present application is prima facie not maintainable, complete abuse of the process of the SARFAESI Act and is liable to be dismissed with exemplary costs. In that view of the matter, the Respondent Bank has prayed for dismissal of the appeal with costs.

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B. On the above background, I have gone through the records of the case and heard the arguments advanced by Learned Counsels appearing for both the parties and the following points arise for my consideration:

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a) Whether the Appellant has made out a case to be

allowed ? and

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SA No.489/2023

b) To what relief, the^parties are entltled

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REASONS

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This SA is filed challenging the possession notice Cated 03.09.2020 issued by the Respondent Bank for recovery of a sunr of Rs. 66,81,697.25. lt is the case of the Appellant that although substantial amount has been deposited in the loan account, the Respondent Bank did not deduct the same. In this regard, the Appellant has produced the Annexure-A4 to show that some amount has been deposited in the loan account. The contentlon of the Appellant is that on receipt of the demand notice issued by the. Respondent Bank, his Counsel sent a reply to the said demand notice but the Respondent Bank neither accepted the S<\tv r crt provisions of section 13(3A) of reply nor rejected the -^per '' SARFAESI Act. However, the Respondent Bank claimed that no such reply has been received from the Appellant. The copy annexed as Annexure-A3 by the Appellant has no date and signature. Even there is no proof to show that the said document was served to the Respondent Bank. Since no service was being affected to the Respondent Bank, the question of violation cf section 13(34) SARFAESI Act does not arise. But the Appellant

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SA No.489/2023

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side did not go ahead to make repayment of the loan amount. As the Appellant failed to make repayment, the Respondent Bank issued the impugned^possession notice dated 03.09.2020. As^per the postal receipts and acknowledgement, the^possession notice was served on the Appellant side and same would be evident from Annexure-A2 series. It is found that the Respondent Bank has caused paper publication of the possession notice in the "The New Indian Express", an English edition and "Kannada Prabha", Kannada edition, both on 08.09.2020. The^photographs produced by the Respondent Bank show the possession notice was affixed on the mortgaged property. The Learned Counsel for the Respondent Bank submitted that the Borrower is a chronic defaulter even prior to the date of the account being classified as NPA and despite providing several opportunities, the Borrower failed to regularise the loan account. The Learned Counsel for the Respondent Bank also submitted that the security interest in the property in question is created by the Appellant by executing a valid memorandum of deposit of title deeds and also deposited the title deeds with Respondent Bank with an intention to create equitable mortgage over the property as security for the loan amount utilised, which would establish subsistence of a valid,

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SA No.489/2023

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legally enforceable mortgage in favour of the Respondent Bank. Having regard to the above, it is seen that the Respondent Bank has complied with the provisions of the SARFAESI Act and Rules made thereunder. In these circumstances, as it is evident that the actions of the Respondent Bank are in accordance to law and the Appellant could not establish any infirmities, the present Appeal is devoid of merits and the same is liable to be dismissed.

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