Allowed

Mrs S Abinisha v. Indian Bank

DRT29 Mar 2023SA/533/2022

Case brief

AI extract

What is this about?

The Tribunal upheld the account classification as NPA but struck down the demand and possession notices. The ruling held that the secured creditor failed to comply with statutory service mandates to all borrowers, rendering the notices liable to be set aside.

What did the court decide?

Measures leading to the impugned possession notice including the demand notice struck down as not maintainable for want of proper service on all borrowers.

Mrs S Abinisha versus Indian Bank — Banking and Recovery | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 29^th day of March, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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SA No.533 of 2022

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Mrs. S. Abinisha D/o T. Swaminathan 107, K Velayutha nagar-1^st Cross Jayankondan PO Udayarpalam Taluk Ariyalur District 2. Mr. T. Swaminathan S/o Thangavel 107, K Velayutha nagar-1^st Cross Jayankondan PO Udayarpalam Taluk Ariyalur District 3. Mrs. S. Vijayaran W/o T. Swaminathan 107, K Velayutha nagar-1^st Cross Jayankondan PO Udayarpalam Taluk Ariyalur District …Applicants Versus The Chief Manager / The Authorised Officer Indian Bank Nilagiri Branch 204, AVP Alagammal Nagar Trichy Main Road, Near New Bus Stand Thanjavur …Respondent Counsel for the Applicant : Mr. J. Srinivasasan Counsel for Respondent : …..

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FINAL ORDER

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This application is filed under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,

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2002, herein after been referred as SARFAESI Act or the Act as the case be, challenging the possession notice issued by the respondent dated 6.9.2022.

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The 1^st applicant admits to have approached the respondent for an Education Loan for studying MBBS professional course and in lieu of the same a facility for Rs.13,25,000/-was sanctioned wherein the 2^nd applicant stood as the guarantor and 3^rd respondent as the co-borrower. It is also admitted that the mortgage of the schedule property were created as a collateral security. It is also stated that the 1st applicant though completed the course could not commence the practice as she started the PG course. It is contended that the respondent without considering the said factual situation had initiated the measures under the Act and issued the demand notice, which according to the applicants was issued only to the 1^st applicant. It is also it case of the applicants that the consequential possession notice, which is impugned herein was also issued only to the 1^st applicant. In the grounds to the SA also the applicant is reiterating the contention as to the alleged failure of the applicant to issue the demand notice and possession notice on 2^nd and 3^rd applicants. Hence on the above contention the applicants seek to set aside the measures leading to the impugned possession notice.

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Notice was issued to the respondent. Even after issuance of notice and service on the respondent there was no representation for them on 6.1.2023. Even though from 6.1.2023 the matter was adjourned to 8.2.2023 for appearance of the respondent and counter there was no appearance and hence on 8.2.2023 the chance of filing counter was closed and the matter was posted to 6.3.2023 for hearing. On 6.3.2023 also there was no representation

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for the respondent and hence the respondent was called absent and the applicant was heard.

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The only issue that is to be decided is as to the legality of measures leading to the issuance of impugned possession notice.

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Heard the counsel for the applicant. The applicants are admitting the availment of the facility and the defaults committed by them the only compliant as against to the classification of NPA is that the respondent had not considered the alleged fact that the 1^st applicant had not commenced her practice, after completion of the course. This contention is legally untenable as applicant does not have a case that the agreement allows the applicant to commence repayment only after the student gets a job. In view of the admission as to the defaults and want of any specific challenge as to the NPA, this Tribunal is of the view that the classification of account as NPA by the respondent cannot be interfered with and hence the said classification is upholded

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In their challenge as to be measures leading to the issuance of impugned possession notice, the applicant contends that the demand notice as well as the possession notice is served on the 1^st applicant alone. These contentions are not disputed or denied by the respondent as there was no appearance despite service of notice. In view of the fact that the respondent is called absent and the applicant’s contention remains uncontroverted, this Tribunal is of the view that the demand notice and possession notice are liable to be struck down for want of proper service. The statute mandate the service of

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demand notice on all the borrowers. It is also imperative for the secured creditor to serve the possession notice also on all borrowers.

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In view of the above findings the following orders are passed.

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(a) SA No. 533 of 2022 stands allowed.

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(b) The measures taken by the respondent leading to the impugned possession notice, including the demand notice is struck down as not maintainable.

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(d) The respondent is directed not to mulct the cost incurred in issuance and publication of impugned possession notice and the expenses for this litigation on the applicant. If any debit is already made in this regard, necessary reversal had to be made forthwith.

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(e) The applicant is permitted a cost of Rs.25,000/- which is to be adjusted at the time of settlement or closure of the loan, as the case be.

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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 29^th day of March, 2023)

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

Mrs S Abinisha v. Indian Bank

Case brief

What is this about?

What did the court decide?

Mrs S Abinisha v. Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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Case details

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