Dismissed

Gireesh Sivasankar v. Sundaram Home Finance Ltd.

DRT13 Nov 2023SA/495/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed an application challenging securitization measures under the SARFAESI Act. The Tribunal held that the applicant, having sold the mortgaged property via a registered deed undisputed in law, was not an aggrieved third party and lacked locus standi to resist the proceedings against the borrower.

What did the court decide?

Securitization Application dismissed; costs of Rs.10,000 awarded to 1st defendant; Incident Adjustment disposed.

Gireesh Sivasankar versus Sundaram Home Finance Ltd. — Banking and Recovery | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

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Dated this the 13^th day of November, 2023

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SECURITISATION APPLICATION No.495/2023

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Between

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Gireesh Sivasankar, S/o.Sivasankaran Pillai, Sivanivas, Thiruvampady.P.O., Alappuzha – 673 582. …Applicant

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And

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Sundaram Home Finance Ltd., Kottayam Branch, 1^st Floor, SNDP Kottayam Union Office Building, S.N.Square, S.N.Junction, M.C.Road, Kottayam – 686 001,

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Represented by its Branch Manager.

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The Authorised Officer, Sundaram Home Finance Ltd., Kottayam Branch, 1^st Floor, SNDP Kottayam Union Office Building, S.N.Square, S.N.Junction, M.C.Road, Kottayam – 686 001,

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Rajeev Bhasker Warrier, S/o.Bhaskara Warrier, Rajeevam House, Thathampally.P.O., Alappuzha – 688 013. …Defendants

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This Securitization Application having been heard on 30.10.2023

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in the presence of Advocates M/s.Sadchith.P.Kurup, C.P.Anil Raj, Siva Suresh and Reshma Raj for the applicant, Advocates M/s.Saji Isaac.K.J

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and Jithin Saji Isaac for the 1^st and 2^nd defendants, Advocates M/s.Vidhu.M.Unnithan, Abu Mathew and Aju Mathew for the 3^rd defendant and stood over to this day for consideration, the Tribunal delivered the following:

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SA 495/2023

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F I N A L O R D E R

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This SA is filed by a third party under S.17(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) praying to declare that the securitization measures initiated by the 1^st and 2^nd defendants in respect of the subject matter property and the notice issued by the Advocate Commissioner as illegal, with further relief to set aside the same.

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Brief facts of the case :

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In the SA the applicant claimed that he was the owner in possession of the subject matter property. Due to some business transaction, he handed over the property to the 3^rd defendant by executing a registered document. Despite execution of the regd. documents the physical possession of the property was with the applicant. As per the agreement, the 3^rd defendant should re-convey the property having an extent of 3.24 Ares to the applicant. Instead of re-conveying the property, the 3^rd defendant mortgaged the subject matter property in favour of the 1^st defendant for availing a loan. The applicant has filed a civil suit bearing OS No.302/2023 before the Munsiff Court, Alappuzha against the 3^rd defendant which is pending for consideration. In the securitization measures initiated by the 1^st and 2^nd defendants, possession notice dated 03.02.2023 marked Annexure-A2 was issued to the borrowers. Getting knowledge of the same, the applicant filed W.P.(C) No.14299/2023 before the Hon'ble High Court of Kerala challenging such measures which was disposed giving liberty to the applicant to work out his remedy in accordance with law in appropriate court of law.

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SA 495/2023

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It is claimed by the applicants in the SA that by issuing possession notice, 1^st and 2^nd defendants took symbolic possession of the secured asset and are trying to take physical possession of the same without issuing any notice to the applicant. The applicant has filed another writ petition before the Hon'ble High Court of Kerala bearing W.P.(C) No.23919/2023, which was disposed by judgment dated 10.08.2023 giving liberty to the applicant to work out his remedies in accordance with law and the recovery proceedings were deferred till 25.08.2023. Since the applicant is in possession of the secured asset, 1^st and 2^nd defendants ought to have issued notice to him before taking physical possession but no such notice was issued. The Advocate Commissioner appointed by the CJM, Alappuzha issued notice to the 3^rd defendant and his wife which is not binding on the applicant. The applicant, being an aggrieved person, has right to challenge the securitization measures and hence the SA is filed challenging the same in this forum.

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The 1^st and 2^nd defendants filed written statement denying the averments in the application and claimed inter alia that the applicant alienated the subject matter property to the 3^rd defendant in the year 2016 vide Annexure-D1 sale deed No.2330/2016 and the 3^rd defendant derived ownership and possession of the property. Basing upon the sale deed, the 3^rd defendant approached the 1^st defendant to avail loan by creating equitable mortgage of the said property which was sanctioned and he availed the same. Due to irregular repayment, securitization measures were initiated by the defendant bank against the 3^rd defendant. The applicant is no way connected with the loan transaction or the equitable mortgage created by the 3^rd defendant nor

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SA 495/2023

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he has any right to resist the securitization measures initiated by 1^st and 2^nd defendants. The applicant is not in physical possession of the secured asset and the claim is totally false and fabricated. There is no illegality in the measures taken by the 1^st and 2^nd defendants for realisation of the outstanding dues from the 3^rd defendant and his wife and they have absolute authority to proceed against the subject matter property as per law. Hence the SA, being devoid of any merit, may be dismissed.

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The 3^rd defendant appeared in this case but no written statement is seen to have been filed by him.

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From the respective case of the parties, the following

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points are emerged for adjudication in this case:

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(i) Whether the applicant is an aggrieved person to challenge the securitization measures initiated by 1^st and 2^nd defendants against the borrower/3^rd defendant in this case?

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(ii) Whether the applicant has any interest over the subject matter property to resist the securitization measures?

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(iii) Whether the applicant is entitled to get any relief in this case?

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FINDINGS :

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Point Nos.(i) to (iii):

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For the sake of convenience, all the three points being interlinked with each other are taken up together for adjudication. It is not disputed that the applicant was the original owner of the subject matter property and as per Annexure-D1 registered sale deed

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SA 495/2023

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No.2330/2016, he alienated the property to the 3^rd defendant. No material is placed by the applicant to prove that he has ever raised any question in challenging the said document in any forum during the last seven years. In the year 2023 a civil suit is filed by him before the Munsiff Court, Alappuzha seeking relief of mandatory injunction against the 3^rd defendant and direct him to re-convey the subject matter property to the applicant. Once the Regd. Sale deed is executed by the applicant in favour of the 3^rd defendant, unless and until it is set aside by competent court of law, it is a valid document and the applicant has no right to claim title or ownership over the property in question.

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During the hearing, learned counsel for the applicant would contend that there is no dispute about execution of the said sale deed in favour of the 3^rd defendant and creation of equitable mortgage over the same by him for availing the loan. In Annexure-A1 plaint, the same is also admitted by the applicant. It is claimed by him that there was mutual understanding to re-convey the property to him by the 3^rd defendant. No agreement or any other document is filed by the applicant to substantiate such claim advanced in this case. In absence of proof it cannot be believed that the impugned sale deed is not a sale deed in the eye of law and the 3^rd defendant agreed to re-convey the property to the applicant. After alienating the subject matter property, the applicant has no interest over the same and legally he is not entitled to lay claim over the same.

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As per S.17(1) of the SARFAESI Act, only an aggrieved third party can challenge the proceedings initiated by the secured creditor. A third party, being not aggrieved by the measures, cannot initiate any proceeding in this forum. Here in this case, the applicant

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SA 495/2023

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cannot be treated as an aggrieved person in view of the execution of registered sale deed in favour of the 3^rd defendant. He has no locus standi to challenge the securitization measures initiated by 1^st and 2^nd defendants against the 3^rd defendant. Unless and until it is decided by the competent court that the impugned sale deed did not convey any title to the 3^rd defendant, the applicant cannot resist the securitization measures and he has also no right to initiate this proceeding in this forum. He is not entitled to get any relief in this forum and hence all the points are answered against him.

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Hence it is ordered:-

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ORDER

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In view of the foregoing reasons, the SA, being devoid of any merit, is hereby dismissed on contest with costs of Rs.10,000/(Rupees ten thousand only) payable by the applicant to the 1^st defendant. Consequently, all the pending IAs are closed.

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(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 13^th day of November, 2023)

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 495/2023

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Documents on the part of the applicant

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Annexures	Date	Particulars of documents
Annexure-A1	11.04.2023	Copy of plaint in OS No.302/2023 filed by the applicant before the Munsiff Court, Alappuzha.
Annexure-A2	03.02.2023	Copy of possession notice issued to the applicant.
Annexure-A3	16.06.2023	Copy of judgment in W.P.(C) No.14299/2023 of the Hon'ble High Court of Kerala.
Annexure-A4	10.08.2023	Copy of judgment in W.P.(C) No.23919/2023 of the Hon'ble High Court of Kerala.
Annexure-A5	05.03.2023	Copy of MC No.128/2023 filed by defendants 1 and 2 before CJM, Alappuzha.
Annexure-A6	13.07.2023	Copy of notice issued by the Advocate Commissioner in MC No.128/2023.

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Documents on the part of 1^st and 2^nd defendants

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Annexure-D1 29.03.2016 Copy of sale deed No.2330/2016 of Alappuzha SRO. Annexure-D2 02.09.2022 Copy of letter issued by the 2^nd defendant.

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Documents on the part of the 3^rd defendant

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Nil

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PRESIDING OFFICER

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH

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PRESIDING OFFICER

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Dated the 13^th November, 2023

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SA No.495/2023

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Between

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Gireesh Sivasankar, S/o.Sivasankaran Pillai, Sivanivas, Thiruvampady.P.O., Alappuzha – 673 582. …Applicant

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And

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Sundaram Home Finance Ltd., Kottayam Branch, 1^st Floor, SNDP Kottayam Union Office Building, S.N.Square, S.N.Junction, M.C.Road, Kottayam – 686 001, Represented by its Branch Manager & 2 others. …Defendants

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F I N A L O R D E R

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SA 495/2023 10.11.2023

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Omitted to be listed. Adjourned to 13.11.2023.

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Presiding Officer

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SA 495/2023 13.11.2023

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…………… In view of the foregoing reasons, the SA, being devoid of any merit, is hereby dismissed on contest (vide separate final order) with costs of Rs.10,000/- (Rupees ten thousand only) payable by the applicant to the 1^st defendant. Consequently, all the pending IAs are closed.

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In view of the disposal of the SA, there is no necessity to consider the grievance raised by the applicant in IA No.2955/2023 and the same is also disposed.

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Presiding Officer

Gireesh Sivasankar v. Sundaram Home Finance Ltd.

Case brief

What is this about?

What did the court decide?

Gireesh Sivasankar v. Sundaram Home Finance Ltd.

Case brief

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What did the court decide?

What the court decided

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