Dismissed

Dr Muthu Adhithiya Cholan v. Indian Bank

DRT23 Jun 2023SA/560/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed a Section 17(1) SARFAESI Act application challenging a possession notice for an educational loan. The Tribunal held the Respondent bank complied with statutory requirements, NPA classification was valid due to defaults, and service mandates were fulfilled.

What did the court decide?

Application dismissed; no order as to cost; pending IAs closed.

Dr Muthu Adhithiya Cholan 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 23^rd day of June, 2023

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PRESENT : SHRI T.RAJESH PRESIDING OFFICER

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SA No.560/2022

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Dr.Muthu Adhithiyacholan, S/o.Muthu Ramalingam, MMK Complex, 66/114, New Vellalar Street, Kodambakkam, Chennai – 600 024. … Applicant. Vs. The Authorised Officer, Indian Bank, Kodambakkam Branch, No.4/12, Trustpuram, 3^rd Cross Street, Kodambakaam, Chennai – 600 024. [IFSC CODE-IDIB000K040] … Respondent. Counsel for Applicant : Mr.P.V.Ramachandran. Counsel for Respondent : M/s.K.V.Subramanian Associatez. …..

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O R D E R

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This application is filed by the applicant under section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (herein after called SARFAESI Act or the ‘Act’, as the case be), with a prayer to set aside the impugned possession notice dt.16.09.2022 issued by the respondent.

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The Educational Loan for Rs.18,32,000/- was availed by the applicant with this father as co-obligant for completing his course of Medicine and Surgery in Georgia. It is stated that since the applicant had to pursue his further studies and could not find an avocation, the repayment could not be done as agreed upon. It is contended by applicant that the applicant had submitted a OTS request on 12.05.2022 which according to the applicant was arbitrarily rejected by the respondent. In regard to the measures also, it is contended by the applicant that the respondent had wrongly and arbitrarily issued the demand notice without taking note of payments made by the applicant. Though a detailed objection was submitted on 18.08.2022 after the demand notice, the respondent had not considered the same and proceeded further by issuing the impugned possession notice. In regard to the possession notice also it is stated that the same was not served on the co-obligant. Hence, the applicant is impugning the measures contending that the remittances made to the loan account were not duly considered and that there is no proper service of demand notice and possession notice. Along with SA, the applicant had produced the following documents:

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(a) Sec.13(2) Demand Notice dt.27.06.2022.

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(b) Objections by Applicant dt.18.08.2022.

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(d) Possession Notice received by Applicant dt.16.09.2022.

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The respondent who entered appearance on notice had filed their

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counter interalia denying that the contentions of the applicant as to the

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alleged illegality in measures leading to issuance of impugned possession notice. It is also specifically contended that the measures taken by them are all in accordance with the statute. Along with counter, the respondent had produced the following documents:

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(a) Demand Notice to Borrower/Guarantor under Section 13(2) of SARFAESI Act with acknowledgments dt.27.06.2022.

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(b) Representation submitted by the applicant dt.18.08.2022.

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(d) Possession Notice for immovable Property – Section 13(4) dt.16.09.2022.

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(e) Paper Publications both in English and vernacular language i.e.Tamil dt.21.09.2022.

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(h) Photograph showing the Possession Notice affixed on the mortgaged property of the Applicant dt.16.09.2022.

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Heard the Ld. Counsel for both sides and considered the rival contentions as taken in the SA and the counter affidavit in the light of documents produced by both sides. The only issue that arises for consideration in this matter is as to the legality of measures leading to the issuance of impugned possession notice.

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The main contention of the applicant in regard to the measures is the non-consideration of OTS proposal. This submission is made without producing any documents to prove as to the entitlement of applicant to get such OTS, if any. Even though the applicant is contending that the classification of account as NPA is erroneous, the self admission of the applicant as to the defaults coupled with nonproduction of any evidence proving the remittance if any made, leads to

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the only conclusion that the classification of account as NPA is due to the defaults occurred in the account.

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The applicant is admitting the receipt of demand notice, however putting forward a contention that the representation made by the applicant in pursuant to the demand notice is not considered by the respondent. This contention is rebutted by the respondent by producing reply they have forwarded to the representation. Despite production of said document along with counter, the applicant had not filed any rejoinder disputing the said fact. On the basis of documents produced by the respondent, the contention as to non-compliance of Rule 3A is to be rejected.

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The respondent had produced the proof of service of demand notice and the proof of service, publication and affixture of possession notice which leads to the due compliance of Rules 3, 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002. No other contention is raised by both sides at the time of hearing or pleading.

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In view of the above discussions and findings entered as above, this Tribunal is satisfied that the respondent had duly followed the mandate of statute in classifying the account as NPA and also in their measures leading to the issuance of impugned possession notice. Hence the SA is devoid of merits and is liable to be dismissed.

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In the result, SA 560/2022 stands dismissed. In view of the facts

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and circumstances of the case, no order as to cost is passed and all pending IAs stands closed. Issue copies in accordance with Rule 16 of

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the Debt Recovery Tribunal (Procedure) Rules, 1983.

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( Dictated to PA, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 23^rd day of June, 2023 )

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

Dr Muthu Adhithiya Cholan v. Indian Bank

Case brief

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Dr Muthu Adhithiya Cholan v. Indian Bank

Case brief

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