Dismissed

Sudhakaran K C v. Catholic Syrian Bank Limited

DRT11 Apr 2023SA/538/2022

Case brief

AI extract

What is this about?

The Securitisation Application was dismissed. The Tribunal held that the bank complied with statutory provisions, the applicant failed to prove representation submission or High Court compliance, and unsustainable objections regarding residential property did not warrant interference with the possession order.

What did the court decide?

Application dismissed with no costs.

Sudhakaran K C versus Catholic Syrian Bank Limited — Execution and Attachment | DRT (2023)

¶1

Fair Order

¶2

IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

¶3

DATED THIS 11^th DAY OF APRIL, 2023

¶4

PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

¶5

S.A No.538 of 2022

¶6

Between

¶7

Sudhakaran K.C., S/o. Unni K.K., Gokulam House, Near Panthakkal Temple, Pattambi Village, Palakkad Taluk, Pattambi P.O., Palakkad Dt.

¶8

---Applicant

¶9

And

¶10

The Authorized Officer, Catholic Syrian Bank Ltd., North Kerala Zone, Ground Floor, CM Mathew & Brothers Arcade, Chakkarothukulam, Kozhikode – 673 006.

¶11

---Defendant

¶12

This Securitisation Application coming on 28.02.2023 for final hearing before me in the presence of Mr. P.S. Sujeth, Advocate for Applicant and Mr. Madhu Radhakrishnan Advocate for Defendant and upon hearing the arguments of Counsels for both the parties and having stood over for consideration till this day, this Tribunal delivered the following:

¶13

SA No.538 of 2022

¶14

O R D E R

¶15

This Securitisation Application was filed on 14.11.2012 seeking to declare that the initiation of the proceedings under Annx.A3 notice of the Advocate Commission to be null and void, since the proceedings initiated without keeping the statutory provisions envisaged under Section 13 (3A) of the Act and to direct the defendant to consider the latest restructure measures and the benefit being declared by the Reserve Bank of India as well as the Central Govt. Of India and extend the same benefits to the applicant too, in view of the COVID 19 pandemic situation prevails in the State and to direct the defendant to consider the representation submitted by the applicants seeking instalments on overdue amount and to regularise the loan account and to take a decision at the earliest and to give a direction to the respondent not to include the expenses and the incidental charges on the applicant’s account and direct the defendant to pay costs of this proceedings to the applicant.

¶16

The averments of the applicant in the SA in brief are as follows:

¶17

The applicant availed two Housing loans of Rs.15 lakhs in the year 2012 for a term of 15 years @ Rs.15,000/- as an EMI and Rs.14 lakhs in the year 2015 with an EMI of Rs.14,000/- for the construction of his residential by mortgaging by deposit of title deed of 9.75 cents of property and a residential building in Sy. No.62/12 of Pattambi village. The applicant was conducting a gold ornaments working unit and he was regularly paying the EMIs till 2019 March. In the meanwhile the pandemic situation adversely effected his work. Moreover his manufacturing equipment and some gold were washed away during the flood. Hence he became defaulter in his payments. Now there is an amount of total nearly Rs.9 Lakhs is pending as overdue amount of the loan.

¶18

The Authorized Officer of the bank had issued a demand notice dated 03.05.2021, under Section 13(2) of the Act, to the applicant demanding the entire outstanding loan amount with interest to be repaid within 60 days from the date of receipt of the said notice. The applicant submitted a representation, Annx.A1 on 30.6.2021 to the Authorized Officer, seeking some time to pay the overdue amount and for the regularization of the loan account but no action had been taken on the said representation. The non-consideration of the representation is a violation of the provisions envisaged under Sec 13 (3A) of the Act.

¶19

Page 2 of 9

¶20

SA No.538 of 2022

¶21

The bank authority issued a possession notice, Annx.A2 issued on 06.09.2021 intimating that the symbolic possession of the secured asset had been taken by the Authorized Officer. The amount shown in the said possession notice is Rs.34,18,296/-. The applicant approached the Hon'ble High Court of Kerala by filing a writ petition as W.P. (C) No. 13606/2022, installment facility and extended time was granted. After the High Court order, the applicant remitted Rs.9.6 Lakhs and the payment was irregular again as he was suffering from back pain. Now he has received a notice of Advocate Commissioner Annx.A3, directing to handover the possession of the secured asset within seven days. Certified copy of the affidavit and petition filed by the bank before the Hon’ble CJM Palakkad is produced as Annx.A4 and the order of the Hon’ble CJM Palakkad dated 282.03.2022 is produced as Annx.A5.

¶22

The initiation of recovery proceedings against the residential property is per-se illegal and against the law and also against the provisions envisaged under the Act. The applicant is always ready and willing to settle the loan account with the defendant bank, but only sought some more time to settle the loan account.

¶23

The applicant is entitled to get the benefit announced by the State as well as the Central Governments, on account of the recent floods and the COVID-19 pandemic. The ongoing recovery proceedings are violative of the provisions under the Act and the applicant seeks interference of the Hon’ble Tribunal to ensure justice to the applicant.

¶24

The defendant came on record and filed Written Statement interalia contending as follows :

¶25

Mr. Sudhakaran K.C. as borrower and Sumi P.M as guarantor has availed a housing loan of Rs.15 lakhs from CSB Pattambi branch on 29.02.2012. They had also availed a second housing loan of Rs.14 Lakhs upon the same property on 10.09.2015. The first housing loan of Rs.15 lakhs was granted on 29.02.2012 for construction of house with 237 EMIs of Rs.16,600/- each. The second housing loan of Rs.14 Lakhs was granted on 25.08.2015 for the finishing works with 240 EMIs of Rs.14,000/- each. Property mortgaged as security is 9.75 cents of land with residential building in Sy. No. 62/12 of Pattambi village, Ottapalam Taluk of Palakkad District in the name of Sudhakaran K.C. The accounts turned NPA on 24.10.2020.

¶26

Demand Notice, Annx.A1, under SARFAESI Act, was issued on 03.05.2021 for recovery of an amount of Rs.33,02,048.06 with future

¶27

Page 3 of 9

¶28

SA No.538 of 2022

¶29

interest from 01.05.2021 and the notice was acknowledged by the borrower/guarantor.

¶30

The averments in paragraph 3 are false. No such representation dated 30.6.2021 as stated in the SA has been submitted by the applicant. The bank had in fact visited Pattambi on 11.08.2021 for the purpose of taking symbolic possession. However, the bank deferred from taking possession on the said date considering the borrower’s representation that he shall remit Rs.50,000/- before 27.08.2021 and the balance amount required for regularization on or before 25.09.2021 and also that in case he is unable to make remittance as aforesaid, he shall not question or prevent the recovery actions of the bank. True copy of the representation given on 11.08.2021 is produced as Annx.2.

¶31

The borrower failed to remit the 1^st installment as promised. Hence symbolic possession was taken on 06.09.2021 and newspaper publication was made on 10.09.2021 in the Business Line and Desabhimani newspapers. There were no such relaxations on loans on account of Covid in force at the time of taking symbolic possession. Section 14 petition was filed before the CJM Court Palakkad and orders has been passed by CJM Palakkad on 28.03.2022 and has directed the Advocate Commissioner to take possession and file report on or before 28.07.2022. The Advocate Commissioner thereafter issued notice of possession to the applicant.

¶32

The borrower filed W.P. (C) No. 13606/2022 before the Hon'ble High Court of Kerala. The High Court vide order dated 08.04.2022 directed the petitioner to remit the overdue instalment amount of Rs.9,65,776/- in ten equated monthly instalments. The 1^st instalment was to be remitted before 08.05.2022. Regular EMIs was also to be paid along with the instalments directed above. It was also specified that failure to remit any one instalment shall entitle the Bank to proceed in accordance with law. The averment of the applicant/ borrower that he had remitted Rs.9.60 Lakhs after the High Court order is not correct. He had remitted only Rs.1,90,000/- after the High Court order as shown below:

¶33

17.05.2022 – Rs.1,30,000/06.06.2022 – Rs. 30,000/27.07.2022 – Rs. 30,000/-

¶34

True copy of the order of the High Court in W.P. (C) No. 13606/2022 is produced as Annexure-3.

¶35

Page 4 of 9

¶36

SA No.538 of 2022

¶37

The applicant filed a petition for extension of time to pay the pending 2^nd and 3^rd instalments and the High court vide order dated 29.07.2022 directed the petitioner to pay the 2^nd and 3^rd instalments within 30 days. The Court also clarified that the remaining instalments and EMIs had to be paid as directed in the judgment. The borrower failed to comply with the direction of the High Court. True copy of the order of the Hon'ble High Court of Kerala dated 29.07.2022 is produced as Annexure-4.

¶38

On 20.09.2022 the CJM Court granted permission to break open the lock of the gate and front door of the residential building in the secured property. The Advocate Commissioner again issued notice dated 10.10.2022 to the parties intimating that physical possession will be taken on 21.10.2022. The petitioner again approached the High court for extension of time for a further period of 30 days for paying the 2^nd to 6^th instalments. The Hon’ble High Court extended the time for payment of all the defaulted installments as directed in the judgment dated 08.04.2022 and the regular EMIs as per the terms of loan agreement till 19.11.2022. It was also specified that in case the petitioner fails to comply with the above, the bank can proceed further. It is also very clearly stated in the High Court dated 20.10.2022 that “under no circumstances shall any further extension or modification be granted to the petitioner”. In the event of default in complying with the above condition, the respondent bank shall be free to proceed in accordance with law. True copy of the order of the High Court dated 20.10.2022 is produced as Annexure-A5.

¶39

The contention of the applicant that SARFAESI action cannot be preceded against residential property is not correct. The borrower has no intention to settle the account and is only buying time endlessly. The possession notice shows the dues in the account as on 31.08.2021 and the dues shown in the Section 14 petition is as on 31.01.2022.

¶40

Bank has complied with all statutory provisions before proceeding with the recovery action. The account has become NPA on 31.03.2021. The amount advanced to the applicant is public money and the bank is bound to recover the public money extended. No representation on the demand notice has been received by the Bank. In the light of the above, it is prayed that this Hon’ble Tribunal be pleased to dismiss the S.A with costs.

¶41

The point arising for consideration is as to whether the applicant is entitled to get the reliefs sought for in this S.A.

¶42

Page 5 of 9

¶43

SA No.538 of 2022

¶44

Point: The availment of housing loan to a tune of Rs.15 Lakhs in the year 2012 and another housing loan of Rs.14 Lakhs in the year 2015 from the defendant bank by mortgaging his immovable properties situated in Sy. No.62/12 of Pattambi village has been admitted by the applicant in the S.A. Further the default in repayment of the outstanding loan due has also been admitted by the applicant in the SA. Hence the loan account of the applicant came to be classified as Non-Performing Asset. Demand notice dated 03.05.21, Annx.B1 (wrongly mentioned as Annexure-A1 in the index of the written statement) was issued to the applicant calling upon him to pay the outstanding loan due within a period of 60 days from the date of receipt of the notice. According to the applicant, he sent representation dated 30.06.2021, Annx.A1 to the defendant requesting some to time to pay the overdue amount and for regularising his overdue amount in instalments. But the defendant has averred in his written statement that no such representation dated 30.06.2021 was submitted by the applicant. The applicant has not filed any proof to prove his contention that he sent Annx.A1 representation to the defendant. Therefore, the above averment of the applicant cannot be accepted as correct.

¶45

According to the defendant, when the Officer of the defendant Bank visited the secured asset on 11.08.2021 for the purpose of taking symbolic possession of the property, the applicant submitted representation, Annxexure-B2, (wrongly mentioned as Annexure-A2 in the index of the written statement) stating that he would remit Rs.50,000/- on or before 27.08.2021 and the balance amount required for regularization of the loan account on or before 25.09.2021 and that if he was unable to make remittance as aforesaid, he would not question or prevent the recovery action of the bank. A perusal of Annx.B2 representation shows that the applicant made the above representation. It is seen from the averment of the written statement that the applicant failed to remit the first instalment amount of Rs.50,000/- as promised by him. Hence, possession notice dated 06.09.2021, Annx.A2 for taking symbolic possession of the secured asset was issued.

¶46

On application along with affidavit, Annexure-A4, filed by the defendant under Section 14 of the SARFAESI Act, 2002 before the Chief Judicial Magistrate Court, Palakkad, order dated 28.03.2022 Annx.A5, was passed in M.C. No.37/2022 appointing Advocate Commissioner for taking physical possession of the secured asset and file report on or before 28.07.2022. The Advocate Commissioner thereafter issued possession notice to the applicant. The applicant

¶47

Page 6 of 9

¶48

SA No.538 of 2022

¶49

filed W.P. (C) No. 13606/2022 before the Hon'ble High Court of Kerala. The Hon'ble High Court of Kerala vide order dated 08.04.2022, Annexure-B3, directed the petitioner to remit the overdue instalment amount in ten equal monthly instalments. It was also specified that failure to remit any one instalment shall entitle the Bank to proceed in accordance with law. The first instalment was to be remitted before 08.05.2022. The applicant filed a petition for extension of time to pay the pending 2^nd and 3^rd instalments and the Hon'ble High Court of Kerala vide order dt.29.7.2022 directed the applicant to pay the 2^nd and 3^rd instalments within 30 days. The applicant failed to comply with the above direction of the Hon'ble High Court of Kerala.

¶50

On 20.09.2022 the Chief Judicial Magistrate Court Palakkad granted permission to break open the lock of the gate and front door of the residential building in the secured property. The Advocate Commissioner again issued notice dated 10.10.2022, Annx.A3 intimating the applicant that physical possession will be taken on 21.10.2022. The applicant again approached the High court for extension of time for a further period of 30 days for paying the 2^nd to 6^th instalments. The Hon’ble High Court extended the time for payment of all the defaulted instalments as directed in the judgment dated 08.04.2022 and the regular EMIs as per the terms of loan agreement till 19.11.2022. It was also specified that in case the petitioner failed to comply with the above, the bank can proceed further. It is also very clearly stated in the above order of Hon’ble High Court dated 20.10.2022 that “under no circumstances shall any further extension or modification be granted to the petitioner” and that in the event of default in complying with the above condition, the respondent bank shall be free to proceed in accordance with law. Admittedly, the applicant failed to comply with the above order of the Hon'ble High Court of Kerala in letter and spirit.

¶51

The contention of the applicant that SARFAESI action cannot be preceded against residential property is unsustainable. Since the secured creditor is entitled to proceed any property over which security interest has been created by the borrower or guarantor.

¶52

The applicant has not averred anything in the S.A as to what is the infirmity in the Order, Annexure-A5 passed by the learned Chief Judicial Magistrate Court, Palakkad. A perusal of Annexure-A4 affidavit filed by the defendant in M.C. No.37/2022 shows that the defendant has furnished all the details as required under Section 14(1) of the SARFAESI Act, 2002. It is seen from the perusal of the Order, Annexure-A5, that the learned Chief Judicial Magistrate Court, Palakkad passed the order after having satisfied with the contents of

¶53

Page 7 of 9

¶54

SA No.538 of 2022

¶55

the affidavit, Annexure-A4. Therefore, this Tribunal does not find any valid reasons to interfere with the order, Annexure-A5. The applicant has miserably failed to prove his case so as to get the relief sought for in the S.A.

¶56

In the result, S.A No. 538 of 2022 stands dismissed. No costs.

¶57

Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 11^th April, 2023.

¶58

(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 8 of 9

SA No.538 of 2022

List of documents filed by the Applicant along with the application

¶63

S.No.	Date	Particulars
1.	30.06.2021	True copy of the representation submitted to the respondent.
2.	06.09.2021	True copy ofpossession notice
3.	10.10.2022	Notice oftheAdvocate Commissioner.
4.	17.02.2022	Affidavit and petition filed by the Bank before the Hon’ble ChiefJudicial Magistrate Court,Palakkad.
5.	28.03.2022	Order of the Hon’ble Chief Judicial Magistrate Court, Palakkad.

¶64

List of documents filed by the Defendant Bank along with the Written Statement

¶65

S.No.	Date	Particulars
1.	03.05.2021	True copy oftheDemandnotice.
2.	11.08.2021	True copy oftherepresentation.
3.	08.04.2022	True copy of the judgment of the Hon'ble High Court of Keralain W.P.(C)No.13606/2022.
4.	29.07.2022	True copy of the order of the Hon'ble High Court of Keralain W.P.(C)No.13606/2022.
5.	20.10.2022	True copy of the order of the Hon'ble High Court of Keralain W.P.(C)No.13606/2022.

¶66

(Su. WILLYAHM) PRESIDING OFFICER

¶67

Mj/

¶68

Page 9 of 9

Sudhakaran K C v. Catholic Syrian Bank Limited

Case brief

What is this about?

What did the court decide?

Sudhakaran K C v. Catholic Syrian Bank 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

Similar cases

Indian Bank versus M/S Avenir Eco Projects Pvt. Ltd.

Ms Smriti Mini Rice Mill Ors. versus Dakshin Bihar Gramin Bank

Idbi Bank versus M/s Shiv Kriti Infracon Pvt. Ltd. and Others

Idbi Bank versus M/S Pathak Trading Company

Canara Bank versus Mr.Vishambhar Singh

Bank of Baroda versus M/S Ram Das Ganga Prasad