Dismissed

B Srinivasan Devaiah v. cholamandalam finance

DRT22 Sept 2023SA/664/2022

Case brief

AI extract

What is this about?

The Tribunal dismissed an application challenging the respondent's procurement of Section 14 orders under the SARFAESI Act. Upholding the legality of enforcement measures, the court found compliance with procedural rules regarding service of notices and failed to accept unproven claims of account regularization.

What did the court decide?

The Securitization Application was dismissed; all pending interim applications were closed without specific orders on costs.

B Srinivasan Devaiah versus cholamandalam finance — Banking and Recovery | DRT (2023)

¶1

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

¶2

Dated this 22^nd day of September, 2023

¶3

PRESENT: SHRI T. RAJESH

¶4

PRESIDING OFFICER

¶5

SA No.664 of 2022

¶6

B. Srinivasan Devaiah S/o P.R.K. Baskaran Residing at No.46, 1^st Main Road Indira Nagar, Adayar

¶7

Chennai – 600 020

¶8

S. Renuka W/o B. Srinivasan Devaiah Residing at No.46, 1^st Main Road Indira Nagar, Adayar Chennai – 600 020 …Applicants

¶9

Versus

¶10

The Authorized Officer Cholamandalam Investment & Finance Co., Ltd., Dare House, No.2, N.S.C. Bose Road Parrys, Chennai – 600001 …Respondent

¶11

Counsel for Applicants : M/s S. Seshadri Counsel for Respondent : Mr. M. Arunachalam

¶12

FINAL ORDER

¶13

This Securitization Application in short SA is filed under section 17of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), herein after been referred as SARFAESI Act or the Act as the case be impugning the measures taken by the respondent leading to the procurement of section 14 orders from the Chief Metropolitan Magistrate, Egmore in Crl.MP.30034 of 2022.

¶14

The case of the applicant in succinity is as follows:-

¶15

¶16

The applicant along with his family is carrying on business in the name and style “Leo Retail Concepts” a proprietary concern engaged in the business of manufacture and sale of coffee seeds and power under brand name “Leo Coffee”. It is also the case of the applicant that their son approached the respondent approached the respondent and got sanctioned a Home equity loan for Rs.4.60 crores on 31.5.2014. It is also admitted that another facility for Rs.1 crore was also sanctioned on 21.4.2015 which was followed by sanctioning and disbursement of another credit facility for Rs.1.84 crores.

¶17

It is also stated that but of the credit facilities of Rs.7.44 crores, the applicant had repaid to the tune of Rs.7.88 crores and as on date of the application the due could only be Rs.94 lakhs against which an amount of Rs.1 crore was paid. It is further contented by the applicant that during 17.5.2021 and 28.5.2021 their son was called upon by the bank to provide additional documents.

¶18

It is the further case of the applicant that the applicant was shocked to receive a notice dated 28.07.2021 calling upon the borrowers to pay the sum mentioned there in within 60 days from the date of receipt of the notice. It is also contended that on receipt of the notice, the applicant had preferred a representation on 30.9.2021 reminding them about the reschedulement of the loan and had also paid an amount of Rs.31.50 lakhs. In this regard it is the case of the applicant that no reply was received by them. It is also contended that though two items of properties were given as security the property at Dindugal is not included in the notice and a separate notice was issued in respect of that property.

¶19

¶20

Along with the SA the applicant had produced the following documents viz., the request for reschedulement dated 05.05.2021, Demand notice dated 28.07.2021, Possession notice dated 13.10.201, Demand notice for Dindugal property dated 19.10.201, Sale notice dated 28.10.201, Interim order dated 29.10.2021 in SA.352 of 2021, Possession notice of Dindugal properties dated 10.01.2022, Sale notice of Dindugal property dated 25.01.2022, Proceedings in SA.352/2022, SA.103/2022 and SA.352/2021 dated 21.2.2022, 4.3.2022, 8.4.2022 respectively, Notice withdrawing SARFAESI Action dated 22.04.2022, Demand notice dated 25.4.2022, Proceedings in SA.352/11 and SA.103/2022 dated 24.05.2022 and 02.06.2022 respectively, Petition filed before the Magistrate court, Affidavit and proof affidavit, Order by the Ld. Magistrate dated 01.12.2022, Demand notice dated 31.5.2021, Representation to demand dated 29.07.2022. The applicant had filed an additional typed set containing copies of acknowledgment cards, copy of reply dated 29.7.2021.

¶21

It is also contended that neighbours informed applicant that officials of the respondent visited the place and affixed a notice styled as possession notice. The applicant further admits that applicant son had also preferred SA.352 of 2021, SA.103 of 2021. Thereafter a memo had been filed by the respondent in these matters that they are not proceeding with the impugned measures therein.

¶22

It is also stated by the applicant that the respondent had again issued another demand notice dated 24.5.2022, which according to the applicant is issued in contravention of the interim order the Tribunal, which also stood withdrawn as

¶23

¶24

a fresh demand notice was issued on 31.5.2022. According to the applicant, the remittances made by them had taken the account out of NPA. It is also stated that the respondent had also procured the order u/s 14 of the Act. In the grounds to the SA, the applicant contents that action of the respondent is against law and the notice contain incorrect facts. It is also stated in view of the non-consideration of the representation it is to be held that the measures under Section 14 is premature. It is also stated that the remittances of Rs.31.50 Lakhs and 75 Lakhs made by the applicant were not reckoned by the respondent.

¶25

The respondent entered appearance and filed their counter refuting the contentions as raised in the SA. The respondent further contents that they had scrupulously followed the procedure as required under the statute. The respondent had also put forward the details of three credit facilities availed by the applicant. The respondent had also provided the chronology of events which is as follows:

¶26

24.03.2021	-	Classificationofaccount asNPA
28.07.2021	-	Issuance of Demand Notice in respect of Adayar Chennai Property.
13.10.2021	-	Issuance of Possession Notice in respect of Adayar Chennai Property
19.10.2021	-	Issuance of demand notice in respect of Nilakottai Property
10.01.2022	-	Issuance of Possession Notice in respect of Nilakottai Property.
O3.02.2022	-	Mortgagorof Nilakottaiproperty expired.
22.04.2022	-	Withdrawal of both the demand notice by the respondent in viewofdeathof Mr. P.R.K. Baskaran
25.04.2022	-	Issuance of demand notice in respect of both the properties which waslateron withdrawn.
31.05.2022	-	Issuance of demand notice in respect of all the secured assets served on all the borrowers and legal heirs of the deceased.
August 2022	-	Section 14 application filed
01.12.2022	-	Advocate Commissionerappointed byLd.CMM, Chennai.

¶27

¶28

Along with the counter, the respondent had produced the following documents viz., Copy of the demand notice dated 31.5.2022 and postal receipts and track record, Copy of the paper publication of demand notice, CERSAI report, Board Resolution. The respondent had filed an additional typeset producing the copy of representation submitted by the borrowers on 15.7.2022 and 29.7.2022 and the reply to the same dated 30.7.2022 and 8.8.2022.

¶29

Heard the Ld. Counsel for both sides and considered the rival contentions in the light of available evidence. The only issue that arose for consideration in this matter is as to the legality of measures and procedure followed by the respondent in obtaining the orders under Section 14 of the Act.

¶30

Even though the applicant contents about the issuance of several demand notices which later stood withdrawn, the same are not adverted to as by issuing the last demand notice dated 31.5.2022, there is implied withdrawal of the earlier notices. In the absence of any contention as to the regularization of the accounts after the withdrawal of earlier demand notice, this Tribunal is of the considered opinion that the enquiry can be confirmed to the measures sequel to the demand notice dated 31.5.2022.

¶31

The contention as to the so claimed remittances are made without producing any evidence as the same. Even otherwise, the Tribunal cannot go into and decide whether the repayments so made will wipe of the liability as no particulars as to the said so claimed remittances are made. Apart from making a sweeping reference, no particulars of the said remittance as to which account the same is made are not made in the SA.

¶32

¶33

The respondent had produced the proof of despatch and service of demand notice on borrowers as evidenced by track of postal department site. Even otherwise there is proof as to the compliance of proviso to the rules is also available as it is proved that there is paper publication of the demand notice. These documents prove the compliance of Rule 3 of the Security Interest (Enforcement) Rules which is the only pre-condition for measures under Section 14 of the Act.

¶34

No other contentions are put forth by the applicant in their challenge as to the measures under the Act. In view of the findings as to the due compliance mandate of the statute, this Tribunal is of the view that there is no merit in the SA and the same is liable to be dismissed.

¶35

In the result TSA stands dismissed, all pending IA’s stands closed, no orders as to cost. Issue copies in accordance with Rule 16 of the Debt Recovery Tribunal (Procedure) Rules 1993.

¶36

(Dictated to PS, transcribed by him, corrected, signed and pronounced by me in Open Court on this the 22^nd day of September, 2023)

¶37

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

¶38

B Srinivasan Devaiah v. cholamandalam finance

Case brief

What is this about?

What did the court decide?

B Srinivasan Devaiah v. cholamandalam finance

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

Mrs S Saroja versus State Bank of India

S Paldurai versus Canara Bank

Tamilnad Mercantile Bank Limited versus M/s.Sun Traders

A C Velmurugan versus City Union Bank Limited

Hdfc Bank Limited versus Ms. v. Ammani

State Bank of India versus Mr. P. Panneerselvam