Allowed

S Ganesan v. Union Bank of India

DRT16 Jun 2023SA/539/2022

Case brief

AI extract

What is this about?

In this Securitization Application, the Debts Recovery Tribunal examined whether the issuance of a sale notice by the Respondent Bank was legal and valid. The Tribunal allowed the application, set aside the sale notice, and annulled any subsequent sale.

What did the court decide?

Sale notice dated 14.9.2022 set aside; any sale held pursuant thereto annulled; Respondent not to multiply Applicant with cost of issuance and publication of sale notice; Applicant allowed Rs.1,00,000

S Ganesan versus Union Bank of India — Banking and Recovery | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 16^th day of June, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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SA No.539 of 2022

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S. Ganesan S/o Subramani No.2, Bharathiyar Street, Arni Tiruvannamalai District Tamil Nadu – 632 301

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Mrs. Panchalai W/o Subramani

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No.2, Thandu Mariamman Street Kosappalayam, Arni Tiruvannamalai District …Applicants

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Versus

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The Authorised Officer Union Bank of India, Arni Branch (erstwhile Corporation Bank) SF No.35/12C, C/2 Block, Door No.285 Gandhi Road, Arni, Tiruvannamalai District Tamil Nadu – 632 301 …Respondent

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Counsel for the Applicants : M/s Dharani Kasinathan Counsel for Respondent : M/s Ananda Gomathy & R. Roshan

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FINAL ORDER

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The sale notice issued by the respondent dated 14.9.2022 is under challenge in this Securitization Application, in short the SA filed under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (herein after been referred as SARFAESI Act or the Act as the case be.

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The applicant’s case in nutshell is as follows: -

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The 1^st applicant borrowed a housing loan for Rs.5,24,454.31 and a personal loan for Rs.2,50,000/- from the erstwhile corporation Bank. It is also admitted that the 2^nd respondent stood as a guarantor to the facilities. It is further contended that the repayment were regular till 2020, however the applicant is admitting the defaults from 2020.

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It is urther contended that the respondent had declared the account as NPA and issued the demand notice dated 30.7.2020 followed by possession notice dated 22.12.2020. It is also contended that the respondent had issued the impugned sale notice. In respect to the measures it the case of the applicant that the same is taken without considering the financial condition of the applicant.

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In the grounds to the SA the applicant is reiterating that the account is illegally classified as NPA that too without extending the financial measures offered by the government.

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The respondent though entered appear though a lawyer and filed the vakalat no counter affidavit was filed despite being granted with many opportunities. Ultimately the chance for filing counter was closed on 3.3.2023, chance for filing counter was closed and the matter was heard.

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Heard the Ld. Counsel for both sides, considered the contentions as taken by the applicant in the SA. The only issue that is to be gone into and decided in this SA is as to the legality of measures leading to the issuance of impugned sale notice.

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The applicant is admitting the availment of the credit facility, and creation of security interest. The applicant is also admitting the defaults occurred in the account. In the light of clear admission as to the defaults, the contest as to NPA classification is to be brushed aside. This is more so as the applicant who claims existence of guidelines of Department of Financial Services failed to produce any supporting evidence as to the existence of such Scheme.

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The applicant is also admitting the issuance of demand notice and the possession notice. The applicant has not put forward any contention as to the service of demand notice and possession notice.

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Now in regard to the question as to the challenge of impugned sale notice, the applicant had not raised any specific ground as to why the sale notice is to be interfered with. However the mandate of Section 17 requires this Tribunal to go into the legality of impugned measures. The respondent which is obliged to prove the legality of measures had even failed to file counter and documents.

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In the light of the above this Tribunal is inclined to uphold the challenge as to the sale notice and hence this application is to be allowed.

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In the result: -

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(i) SA No.539 of 2022 stands allowed.

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(ii) The sale notice dated 14.9.2022 stands set aside.

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(iii) Sale if any held pursuant to the sale notice is annulled.

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(iv) The respondent is directed not to mulct the applicant with cost of the issuance and publication of impugned sale notice.

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(v) The applicant is allowed a cost of Rs.1,00,000/- which is to be adjusted

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at the time of settlement or closure of the loan account.

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(Dictated to PS, transcribed by him, corrected, signed and pronounced by me in Open Court on this the 16^th day of June, 2023)

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

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S Ganesan v. Union Bank of India

Case brief

What is this about?

What did the court decide?

S Ganesan v. Union Bank of India

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

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