Dismissed

Anzar D v. South Indian Bank

DRT20 Sept 2023SA/599/2022

Case brief

AI extract

What is this about?

The Tribunal dismissed the Securitization Application alleging illegal recovery proceedings. It held the applicant lacked clean hands as the mortgagor did not challenge the measures. The Tribunal found no violation of Section 13(3A) and declined to direct loan restructuring.

What the court decided

AI extract

Anzar D versus South Indian Bank — Banking and Recovery | DRT (2023)

¶1

Fair Order

¶2

IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

¶3

DATED THIS 20^th DAY OF SEPTEMBER, 2023

¶4

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

¶5

S.A No. 599 of 2022

¶6

Between

¶7

Anzar D, S/o. Davood, Kodakkattuvalappil House, Pallikkara, Thekkumuri, Nannamukku P.O., Changaramkulam, Malappuram -679 575.

¶8

--- Applicant

¶9

And

¶10

The Authorized Officer, The South Indian Bank Ltd., Regional Office, Kozhikode, Happy Towers, Vaikkom Muhammed Bhashir Road, Mananchira P.O., Kozhikode – 673 001.

¶11

--- Defendant

¶12

This Securitization Application coming on 04.08.2023 for final hearing before me in the presence of Ms. M.R. Reena, Advocate for the Applicant and Mr. Mohan Jacob George, Advocate for the Defendant and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

¶13

SA No.599 of 2022

¶14

O R D E R

¶15

This Securitisation Application was filed on 12.12.2022 seeking to declare that the initiation of the proceedings under Annexure-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 re-structure 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 applicant seeking instalments on overdue amount and may be regularized the loan account and to take a decision at the earliest and to give a direction to the defendant not to include the expenses and the incidental charges on the applicant’s account, since the proceedings are initiated not in accordance with the law and to 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 had availed a Cash Credit Open Loan (CCOL) of Rs.24 Lakhs in the year 2019 and a ECLGS of Rs.4,93,000/- in 2020 and total amount of Rs.28,93,000/- for his business of stationery items and footwear shop by mortgaging by deposit of title deed of 9.75 cents of property and a residential building in Re-Sy. No.373/3,4 of Nannamukku Village in Malappuram District. The pandemic situation adversely effected his business, and hence he became defaulter in his payments. Now there is an amount of total nearly Rs.30,82,119.54 is pending as outstanding amount as per the affidavit filed by the bank before the CJM Manjeri, amount of the loan.

¶18

The defendant, who is the Authorized Officer who issued a demand notice dated 12.05.2022, under Section 13(2) of the Act, to the applicants demanding the entire outstanding loan amount with interest to be re-paid within 60 days from the date of receipt of the said notice. True copy of the demand notice is produced herewith as Annexure-A1.

¶19

The applicant had submitted a representation, Annexure-A2 to the authorized officer, seeking some time to pay the overdue amount and for the regularization of the loan account and to permit him to continue the OD loan account but no action had been taken on the

¶20

Page 2 of 8

¶21

SA No.599 of 2022

¶22

said representation. The non-consideration of the representation is a violation of the provisions envisaged under Sec.13 (3A) of the Act.

¶23

From the petition filed by the bank before the Hon’ble CJM it is learned that the possession notice was published on 21.08.2022 but the applicant has not received the same.

¶24

Now the applicant has received a notice, Annexure-A3 of an Advocate Commission informing that he will be inspecting the secured asset on 15.11.2022 to take the vacant possession of the secured asset. A certified copy of the affidavit and petition filed by the Bank before the Hon’ble CJM Manjeri is produced as Annexure-A4 and the Order of the Hon’ble CJM is produced as Annexure-A5. The Advocate Commission had given 7 days’ time to vacate the premises where the applicant’s family along with aged and ailing parents are residing. 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. Hence, it is liable to be interfered by this Hon’ble Tribunal.

¶25

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

¶26

The above S.A is not maintainable either in law or on facts. The applicant is the Proprietor of one M/s. Swalath Agencies which had availed of a CCOL facility of Rs.24 Lakhs from the Nilambur Branch of the defendant bank. The applicant was also granted another financial facility of Rs.4,93,000/- under the Emergency Credit Line Guarantee Scheme due to Covid-19 period. The security for the aforesaid financial facilities availed by the applicant for his proprietorship concern is Rs.9,75 cents of land with residential building thereon in Re-Survey No.373/3, 4 as per revenue records Re-survey 373/4 of Nannamukku village, Ponnani Taluk, Malappuram District (owned by Mr.Davood K. alias Kodakkattu Valappil Bava) and on hypothecation of the current assets etc to M/s. Swalath Agencies.

¶27

The owner of the property has not challenged the proceedings initiated under the SARFAESI Act. As on 19.01.2023 an amount of Rs.31,87,779.54 is outstanding from the applicant. The account had turned NPA on 04.02.2022. Notice under Section 13(2) dated 12.05.2022 was issued by the defendant and the copy of the same is produced by the applicant as Annexure-A1. No representation or objection was raised by the applicant or the mortgagor against Annexure-A1. Annexure-A2 produced along with the S.A is a fabricated document and this defendant denies that it was sent by the

¶28

Page 3 of 8

¶29

SA No.599 of 2022

¶30

applicant as alleged in the S.A. The applicant has not produced any evidence of the same being sent or accepted by the defendant to substantiate his allegation.

¶31

Since the applicant did not settle the liability pursuant to receipt of Annexure-A1 demand notice, the defendant was constrained to initiate further measures of taking symbolic possession of the property under Section 13(4) of the SARFAESI Act. Copy of the possession notice dated 18.8.2022 is produced as Annexure-B1. Copy of the acknowledgment cards evidencing receipt of possession notice delivered to the applicant and the mortgagor are produced herewith as Annexure-B1(a) and B1(b) respectively. The aforesaid possession notice was affixed on a conspicuous part of the residential building situated in a security property and copy of the photographs evidencing the affixture of the sale notice on a conspicuous part of the building in a security property is produced as Annexure-B2. The aforesaid possession notice was also published in the English daily, The Hindu dated 21.08.2022 and in the vernacular Malayalam daily Malayala Manorama dated 21.08.2022. Copies of the aforesaid paper publications was made in the English daily, “The Hindu” dated 21.08.2022 and in the vernacular Malayalam daily “Malayala Manorama” dated 21.08.2022 are produced as Annexure-B3 and B3(a) respectively. The possession of the property was taken in accordance with the Act and Rules. The applicant did not settle the liability and hence the defendant was constrained to move Section 14 application before the CJM Manjeri. As per order dated 20.10.2022, the CJM had allowed the section 14 application and had appointed an Advocate Commissioner to take possession of the security property. It is accordance with the Annexure-5 order of the CJM that the Advocate Commissioner had issued Annexure-3 notice. There is no violation of any statutory provisions of the Act or the Rules and the applicant has without any bonafides is making false statements and has approached this Hon’ble Tribunal by filing the above S.A and the same is liable to be dismissed with costs.

¶32

The applicant is not the owner of 9.75 cents of property with the residential building thereon which is the security property for the financial facilities availed. The applicant is in receipt of the possession notice as evidenced by the acknowledgment card. The State Govt. has not granted any relaxation which is binding on this bank as alleged by the applicant.

¶33

The security interest created in respect of security property was duly registered with the Central Registry and copy of the CERSAI Registration is produced herewith as Annexure-B4. There is no

¶34

Page 4 of 8

¶35

SA No.599 of 2022

¶36

impropriety, illegality or irregularity in any of the measures initiated taken by the defendant under the provisions of the SARFAESI Act. The above SA lacks of merit and therefore it is only just and proper that the above SA be dismissed with costs.

¶37

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

¶38

Point: The availment of Cash Credit Open Loan of Rs.24 Lakhs in the year 2019 and ECLGS of Rs.4,93,000/- in the year 2020 from the defendant bank by the applicant is admitted in the SA. The applicant has averred in the SA that the aforesaid credit facilities were secured by deposit of title deed of 9.75 cents of property and a residential building in Re-Sy. No.373/3, 4 of Nannamukku Village in Malappuram District, as if the aforesaid secured assets belong to him. But it is revealed from the perusal of the written statement of the defendant that the secured asset absolutely belongs to one Mr.Davood K. alias Kodakkattu Valappil Bava. Thus it is evident that the applicant has not approached this Tribunal with clean hands. Admittedly, the aforesaid mortgagor has not challenged the measures initiated by the defendants in respect of the secured asset.

¶39

Default in repayment of the outstanding loan due is admitted by the applicant in the SA. Hence the loan account of the applicant came to be classified as NPA on 04.02.2022 and demand notice dated 04.02.2022, Annexure-A1 was served to the applicant calling upon him to repay the outstanding loan due within a period of 60 days from the date of receipt of the notice. It is the contention of the applicant that he submitted a representation, Annexure-A2 to the defendant seeking some time to pay the overdue amount and for the regularization of the loan account and to permit him to continue the OD loan account. But the rival contention of the defendant is that no representation or objection against Annexure-A1 was sent by the applicant to the defendant and that Annexure-A2 is a fabricated document. The applicant has not produced any proof to substantiate his contention that he sent Annexure-A2 representation to the defendant and that it was received by the defendant. In the absence of material proof, the mere oral averment of the applicant that the representation sent to the defendant was not considered cannot be accepted as true and correct. Hence the contention of the applicant that the non consideration of the representation is a violation of the provisions envisaged under Section 13 (3A) of the SARFAESI Act, 2002 is untenable.

¶40

Page 5 of 8

¶41

SA No.599 of 2022

¶42

Since the applicant failed to respond to Annexure-A1 demand notice, possession notice dated 18.8.2022 Annexure-B1 was issued by the defendant. The defendant has produced copies of postal acknowledgment cards as Annexure-B1(a), Annexure-B1(b), Annexure-B2 photograph, Annexure-B3 and B3(a) copies of paper publications to prove his contention that possession notice was served to the applicant as well as to the mortgagor of the secured assets and that possession notice was affixed on the conspicuous part of the secured asset and that it was published in two leading news papers, namely, English daily, ‘The Hindu’ edition dated 21.8.2022 and ’Malayala Manorama’ edition dated 21.8.2022 published in vernacular language.

¶43

Even after issuance of Annexure-B1 possession notice, the applicant failed to discharge his liability to the defendant. Hence the defendant filed affidavit and petition, Annexure-A4 under Section 14 of the SARFAESI Act, 2002 before the Chief Judicial Magistrate Court, Manjeri, praying to pass order to take physical possession of the secured asset. Order dated 25.10.2022 Annexure-A5 came to be passed in Crl. MP. No.2937/2022 for taking physical possession of the secured asset. Pursuant to the direction given to the Advocate Commissioner by the Chief Judicial Magistrate Court, Manjeri he issued Annexure-A3 notice to the applicant and the mortgagor informing them that he would take physical possession of the secured asset on 15.11.2022.

¶44

The applicant has merely averred in the SA that initiation of recovery proceedings against the residential property is per-se illegal and against the provisions of the SARFAESI Act, 2002. But the applicant has not averred in the SA as to whether the defendant failed to furnish all the details and particulars required as per the provisions under Section 14 (1) (i) to (ix) of the SARFAESI Act, 2002 in the affidavit, Annexure-A4 filed before the Chief Judicial Magistrate Court, Manjeri. It is seen from the perusal of Annexure-A4 affidavit that the availment of credit facilities by the applicant from the defendant bank upon creation of security interest by deposit of title deeds belonging to the 2^nd defendant (mortgagor), commission of default in repayment of the outstanding loan due, classification of loan account as NPA on 04.02.2022, issuance of demand notice to the applicant as well as to the mortgagor, receipt of the same by them, their failure to settle the loan account, the total outstanding due payable by them, secured asset is being free of lease hold, description of the secured asset in the schedule to the affidavit are stated. A perusal of Annexure-A5 order shows that the Ld. Chief Judicial Magistrate, Manjeri after having perused the contents of the petition and the affidavit and the

¶45

Page 6 of 8

¶46

SA No.599 of 2022

¶47

documents produced and after having satisfied over the same passed order appointing Advocate Commissioner to take physical possession of the secured asset. This Tribunal does not find any infirmity or flaw either in the affidavit filed before the Chief Judicial Magistrate Court, Manjeri or Annexure-A5 order passed by the Ld. Chief Judicial Magistrate Court, Manjeri. The Advocate Commissioner issued Annexure-A3 notice pursuant to the direction given to him by the Ld. Chief Judicial Magistrate Court, Manjeri for taking physical possession of the secured asset. Hence Annexure-A3 notice is not challengeable in any manner under Section 14 of the SARFAESI Act, 2002.

¶48

Therefore this Tribunal comes to a conclusion that there are no valid reasons and merits to interfere with the measures taken under Section 14 (1) of the SARFAESI Act, 2002 by the defendant. This Tribunal is not empowered to direct the defendant to consider the request of the applicant for re-structuring of the loan account or to permit the applicant to pay the outstanding loan due in instalments as sought for by the applicant in the SA.

¶49

In view of the foregoing reasons, this Tribunal holds that the applicant is not entitled to get the reliefs sought for in this SA. In the result, S.A No.599 of 2022 stands dismissed. No costs.

¶50

Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 20^th September, 2023.

¶51

(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 7 of 8

SA No.599 of 2022

List of documents filed by the Applicant along with the S.A.

¶56

Sl. No.	Date	Particulars
1.	12.05.2022	True copy ofthe demandnotice	Annexure-A1
2.	05.07.2022	True copy of the representation submitted by the petitioner.	Annexure-A2
3.	07.11.2022	Notice of the Advocate Commission.	Annexure-A3
4.	15.10.2022	Affidavit and petition filed by the bank before the CJM Manjeri.	Annexure-A4
5.	20.10.2022 List of	Order of the Hon’ble CJM Manjeri. documents filed by the Defendant Bank the Written Statement	Annexure-A5 along with
SL. No.	Date	Particulars
1.	18.08.2022	Copy ofthe possession notice	Annexure-B1
2.	---	Copy of the acknowledgment cards evidencing receipt of possession notice delivered to the applicant.	Annexure-B1(a)
3.	---	Copy of the acknowledgment cards evidencing receipt of possession notice delivered to themortgagor	Annexure-B1(b)
4.	---	Photographs evidencing the affixture of the sale notice on a conspicuous part of the buildingina security property.	Annexure-B2
5.	21.08.2022	Copy of the possession notice published in Englishdaily,“TheHindu”.	Annexure-B3
6.	21.08.2022	Copy of the possession notice published in vernacular Malayalam daily, ‘MalayalaManorama’	Annexure-B3(a)
7.	--	Copy of the certificate evidencing the registration of the security property withthe central Registry.	Annexure-B4

¶57

(Su. WILLYAHM) PRESIDING OFFICER

¶58

Mj/

¶59

Page 8 of 8

Anzar D v. South Indian Bank

Case brief

What is this about?

What the court decided

Anzar D v. South Indian Bank

Case brief

What is this about?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Bank of Baroda versus M/s Pung Enterprise

Canara Bank versus Sri Pranjal Boruah

Indian Bank versus M/s S. Footware and Others

Punjab National Bank versus Smt. Lalita Saini

Punjab National Bank versus Sh. Ram Singh

Union Bank of India versus Maya Saha and Anr.