Dismissed

Asil Mohammed v. Federal Bank

DRT4 Jan 2024SA/126/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed the applicant's application challenging the legality of possession notices under the SARFAESI Act, holding that the notices were issued in accordance with the Act and rules, and that regularization of accounts is not a measure contemplated under Section 13(4).

What did the court decide?

Application dismissed; no change in possession; applicant is at liberty to approach the bank for detailed statement of accounts.

Asil Mohammed versus Federal Bank — Landlord and Tenant | DRT (2024)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS THE 4^th DAY OF JANUARY, 2024

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

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S.A No. 126 of 2022

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Between

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Asil Mohammed, S/o.Aboobacker, Parassery Veedu, Vaikkathoor, Valancheri P.O, Kattipparuthi, Valancheri, Malappuram-676 552.

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--- Applicant

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And

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Federal Bank Ltd., Represented by the Authorised Officer, First Floor, Federal Towers, Arayidathupalam, Kozhikode – 673 016.

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--- Defendant

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This Securitization Application coming on 19.12.2023 for final hearing before me in the presence of Mr. Bijumon E.A., Advocate for the Applicant and Mr.Santhosh Kumar, 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:

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O R D E R

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This Securitisation Application was filed on 12.09.2023 seeking to declare Annexure-A1 and A2 proceedings as illegal and to set aside the same; to set aside Annexure-A3 proceedings; to direct the defendant to produce the decisions taken by the bank on the request made by the applicant; to direct the defendant to take proper and accurate valuation of the property; to direct the defendant to produce the detailed statement of

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SA 126/2022

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account; to keep in abeyance the Securitization proceedings against the secured asset till loan accounts are regularized; to award cost of the proceedings to the Applicant and to direct the defendant to reverse the expenses incurred.

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The availment of financial assistance by the applicant upon creation of security interest over his immovable property, from the defendant bank is admitted by the applicant in the SA. The applicant has not specifically averred in the SA as to whether he was prompt in repaying the outstanding loan to the defendant bank. However, it is revealed from the perusal of the written statement filed by the defendant bank that since the applicant and the co-obligants defaulted in repayment of the outstanding loan due, loan account was classified as NPA.

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Annexure-A1 demand notice was issued to the applicant and other co-obligants calling upon them to repay the outstanding loan due within 60 days from the date of receipt of the notice. Admittedly, the applicant and other co-obligants neither sent any objection/representation for the demand notice nor did they clear the outstanding loan due. Therefore, possession notice dated 14.02.2022 Annexure-A2 was issued for symbolically taking possession of the secured asset. The defendant has produced copies of paper publications, postal Acknowledgment cards and photographs as Annexure-B3, B4 and B5 respectively to prove his contention that possession notice was published in two leading newspapers and that it was served to the applicant and other co-obligants and that it was affixed on the conspicuous part of the secured asset.

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The counsel appearing for the applicant submitted that demand notice was not served to the applicant and other parties to the loan transaction and that demand notice was not published and that the date of classification of the loan account as NPA is not mentioned in the demand notice and that the loan account was classified as NPA during Covid 19 pandemic lock down period, possession notice was not sent to all parties to the loan transaction and that possession notice was not issued as per Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 and that payment made by the applicant was not credited to his loan account and that the Advocate Commissioner issued notice Annexure-A3 dated 07.12.2022 informing the applicant that he would take possession of the property on 15.12.2022 and that therefore SA may be allowed as prayed for.

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The counsel appearing for the defendant submitted that since the applicant and the co-obligants defaulted in repayment of the outstanding loan due, loan account was classified as NPA and that even though the applicant and the co-obligants received the demand notice, they neither sent any objection to the demand notice nor did they clear their liability and that

Page 2 of 5

SA 126/2022

possession notice was issued as per Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 and that the applicant and the co-obligants never approached the defendant bank for reschedule of the repayment of the loan facilities and that the payment made by the applicant was duly credited to the loan account and that interest has been charged as per the agreed terms and conditions and that SA may be dismissed with exemplary cost to the defendant.

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The applicant has himself produced copy of the demand notice as Annexure-A1 along with the SA. Thus it is evident that Annexure-A1 demand notice was served to the applicant and the co-obligants as contended by the defendant. Neither the provisions of Section 13(2) of the SARFAESI Act, 2002 nor the Rule 3 of the Security Interest (Enforcement) Rules, 2002 does contemplate the mentioning of date of classification of loan account as NPA in the demand notice. In any event, the applicant having failed to raise the aforesaid issue by sending objection to the defendant is deemed to have waived his statutory right. Further the applicant has not averred in the SA as to how he was prejudiced on account of non mentioning of the date of classification of loan account as NPA in the demand notice.

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The defendant has produced copies of postal receipts and postal Acknowledgment cards as Annexure-B1 and B2 to disprove the contention of the applicant that Annexure-A2 possession notice not served to him and other co-obligants.

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The applicant has not pointed out in the SA as to which amount remitted by him was not credited to his loan accounts. Hence, the contention of the applicant that payment made by him was not given credit to his loan account does not hold good.

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The applicant has not placed any material before this Tribunal to substantiate his contention that exorbitant rate of interest has been charged. Hence this Tribunal does not find any force in the above contention of the applicant.

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The defendant has proved that Annexure-A1 demand notice and A2 possession notice were issued in accordance with the provisions of the SARFAESI Act and the Rules made there under. Therefore, the applicant is not entitled to get the relief of declaration that Annexure-A1 and A2 notices are illegal. The applicant has not placed any material before this Tribunal to prove his contention that he approached the defendant bank for regularization of the loan account. In any event, regularization of loan account is not a measure contemplated under Section 13(4) of the SARFAESI Act, 2002. Hence, the relief sought for by the applicant to keep

Page 3 of 5

SA 126/2022

in abeyance the securitization proceedings till the loan accounts are regularized is untenable.

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The applicant is seeking to set aside Annexure-A3 notice dated 07.12.2022 issued by the Advocate Commissioner. A perusal of AnnexureA3 notice shows that the Advocate Commissioner issued the notice to the applicant and the co-obligants informing them that he would inspect the secured asst on 15.12.2022. This notice was issued by the Advocate Commissioner pursuant to the direction given to him in Crl. M. P. No.2253/2022 by the Chief Judicial Magistrate Court Manjeri in order to take physical possession of the secured asset. It is also not the case of the applicant that the affidavit filed by the defendant under Section 14 of the SARFAESI Act, 2002 before the Chief Judicial Magistrate Court, Manjeri in Crl. M.P. No.2253/2022 is not in consonance with the mandatory requirements contemplated under the proviso (i) to (ix) to the provisions of Section 14(1) of the SARFAESI Act, 2002 and that the Order passed in Crl. M.P. No.2253/2022 suffers from any infirmity or procedural irregularity. The applicant has also not produced the copies of the affidavit filed in Crl. M.P. No.2253/2022 and also the copy of the Order passed therein. Annexure-A3 notice cannot be challenged in any manner, without challenging the aforesaid aspects.

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The applicant has not specifically averred in the SA as to what is the request made by him to the defendant and also as to what are the decisions taken by the defendant bank on such request. Further, the aforesaid issue does not fall under any category of the measures contemplated under Section 13(4) of the SARFAESI Act, 2002. It is also not the contention of the applicant that his request for furnishing the detailed statement of account was not considered by the defendant bank. Hence, the applicant is not entitled to get the aforesaid reliefs sought for in the SA. The applicant is at liberty to approach the defendant bank to get the detailed statement of accounts pertaining to his loan transactions.

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The applicant has failed to prove his case that he is entitled to get the reliefs sought for in the SA. In the result, S.A No.126 of 2022 stands dismissed. No costs.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 4^th day of January, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 4 of 5

SA 126/2022

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

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Sl.	Date	Particulars	Annexures
No.
1.	12.07.2021	True copy of the Section 13(2) notice issued by the defendant.	Annexure- A1
2.	14.02.2022	True copy of the Section 13(12) read with Rule 3 of the Act and Rules issued by the defendant.	Annexure-A2
3.	07.12.2022	True copy of the Advocate Commissioner notice.	Annexure-A3

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List of documents filed by the defendant along with the written statement

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Sl.	Date	Particulars
No.
1.	28.07.2021	True copy of the postal receipts.	Annexure-B1
2.	----	True copy of the postal acknowledgment cards (5 Nos.)	Annexure-B2
3.	16.01.2022	True copy of the paper publication of possession notice in Madhyamam and Indian Express dailies.	Annexure-B3
4.	---	True copy of the postal acknowledgment cards (5 Nos.)	Annexure-B4
5.	---	True copy of the photographs of the affixture.	Annexure-A5

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/-

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Page 5 of 5

Asil Mohammed v. Federal Bank

Case brief

What is this about?

What did the court decide?

Asil Mohammed v. Federal Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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