Dismissed

C K Prakasan v. Catholic Syrian Bank Limited

DRT6 Feb 2024SA/149/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the Securitization Application filed by C.K. Prakasan against C S Bank. The Tribunal held that service of notices via postal receipt and newspaper publication was sufficient and that the applicant failed to substantiate claims regarding improper valuation of the secured property.

What the court decided

AI extract

C K Prakasan versus Catholic Syrian Bank Limited — Contract and Commercial Disputes | 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 6^th DAY OF FEBRUARY, 2024

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

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S.A No. 149 of 2022

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Between

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C.K. Prakasan, S/o. Gopalan, Punathil Meetal House, Velliparamba P.O., Kozhikode – 673 008.

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--- Applicant

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And

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C S B, formerly (Catholic Syrian Bank Ltd.) Represented by the Authorised Officer, Zonal Office, C.M. Mathew, Arcadde, Chakkorath Kulam, Eranhipalam P.O., Kozhikode – 673 006.

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--- Defendant

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This Securitization Application coming on 04.01.2024 for final hearing before me in the presence of Mr. Bijumon E.A., Advocate for the Applicant and Ms. Keerthy K. Narayan, 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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SA No.149 of 2022

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O R D E R

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This Securitisation Application was filed on 24.03.2022 seeking to declare that the entire proceedings initiated by defendant under SARFAESI Act against the property are illegal and against law and set aside the same including Annexure-A3, A4, A5 and A8 proceedings and to declare that Annexure-A3, A4, A5 and A8 notices are illegal and also direct the defendant bank to keep in abeyance the securitization proceedings against the property till loan accounts are regularized.

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Availment of cash credit facility by the applicant and his wife from the defendant bank upon creation of equitable mortgage over the immovable property by the wife of the applicant in favour of the defendant bank as the collateral security for the aforesaid cash credit facility is admitted by the applicant in the S.A. Though, the applicant has produced copy of treatment progress note stating that he had to incur medical expense for his treatment, he has not specifically averred in the SA as to whether he was prompt in repayment of the outstanding loan due. However, it is revealed from the perusal of the written statement of the defendant that since the applicant committed default in repayment of the outstanding loan due, his loan account was classified as Non-performing Asset on 31.05.2019.

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The defendant issued demand notice dated 11.07.2019, Annexure-A3 to the applicant calling upon him to pay the outstanding loan due within a period of 60 days from the date of receipt of the notice. The applicant has admitted the receipt of the demand notice, but the contention of the applicant is that demand notice was not served to all the parties to the loan agreement. The rival contention of the defendant in its written statement is that Annexure-A3 demand notice was served to the applicant and the guarantor. Annexure-B1 copy of postal receipts produced by the defendant evidences the dispatch of Annexure-A3 demand notice to the applicant and the guarantor. When the applicant had received the demand notice, the guarantor who is none other than his wife and is residing with him ought to have received the demand notice. Hence the contention of the applicant that demand notice was not served to all the parties to the loan agreement does not hold good.

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The provisions of SARFAESI Act, 2002 and the Rules made thereunder does not contemplate issuance of any notice prior to classification of loan account as Non-performing Asset. Thus this

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SA No.149 of 2022

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Tribunal does not find any force in the contention of the applicant that loan account cannot be classified as Non-performing Asset without issuance of prior notice.

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It cannot be disputed that the applicant neither sent any objection/representation to the demand notice nor did he clear the outstanding liability to the defendant bank. Therefore, possession notice dated 27.09.2019, Annexure-B3 was issued for taking symbolic possession of the secured asset. The defendant has produced copies of paper publication as Annexure-B4 and B5 to show that Annexure-B3 was published in Deepika daily and The New Indian Express daily, which are having wide publication in the locality where the applicant and the guarantor are residing. The defendant has also produced Annexures-B6 and B7 which are postal receipts and postal acknowledgement cards to prove his claim that possession notice was served to the applicant and the guarantor. Hence the contention of the applicant that possession notice was not issued to the parties to the loan agreement as per Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 cannot be accepted as correct. Further, the applicant is not entitled to challenge the possession notice, since it was not challenged within the statutory period from the date of its issuance.

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A perusal of Annexure-A5, copy of petition filed in Crl. M.P. No.824/2021 on the file of the Chief Judicial Magistrate Court, Kozhikode shows that all the details such as availment of credit facilities by the applicant and his wife upon creation of security interest over the immovable property belonging to his wife, commission of default in repayment of the outstanding loan due, classification of loan account as Non-performing Asset, service of demand notice to all the parties, failure to repay the outstanding loan due even after receipt of demand notice, publication of possession notice, reason for taking physical possession of secured asset, description of the property with boundaries are stated. Thus it is evident that all the details contemplated under the proviso (i) to (ix) to the provisions of Section 14(1) of the SARFAESI Act, 2002 were furnished by the defendant in his affidavit. It is seen from the perusal of Annexure-A6, Order dated 14.01.2022 that the Chief Judicial Magistrate Kozhikode after having perused and satisfied over the contents of the affidavit passed Order appointing Advocate Commissioner to take physical possession of the secured asset. This Tribunal does not find any infirmity or procedural irregularity in Annexure-A6 Order. Pursuant to the direction given in Crl. M.P No.824/2021 the Advocate Commissioner issued Annexure-A7 notice to the applicant and the guarantor informing them that he would take

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Page 3 of 7

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SA No.149 of 2022

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possession of the secured asset on or before 15.03.2022. This notice cannot be challenged in any manner.

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It is contended by the applicant that sale notice dated 05.03.2022 was issued and that the reserve price fixed for the property is Rs.16,50,000/- which is very low and that value for the property was fixed without taking any proper valuation of the property and that value of the property is more than Rs.30,00,000/-. The contention of the defendant is that the reserve price fixed in the sale notice dated 30.03.2020 was Rs.27.50 Lakhs and that sale was not materialized for want of bidders and that therefore, another sale notice dated 05.03.2022 was issued fixing the reserve price at Rs.16.50 Lakhs after obtaining fresh valuation report, Annexure-B8 and that the reserve price was fixed corresponding to the current market value of the property. In Annexure-B8 valuation report, the estimated value of the land is fixed at Rs.20,62,500/- and the distressed value of the property is fixed at Rs.16,50,000/-. The defendant has fixed this amount of Rs.16,50,000/- as the reserve price for the property. Though the applicant has vehemently averred in the SA that the reserve price fixed for the property is very low and that worth of the property is more than Rs.30,00,000/-, no material has been produced by the applicant before this Tribunal to substantiate the above averment. This Tribunal finds that the above fixation of the reserve price for the property appears to be correct. The defendant has produced Annexure-B10 and B11 in order to show that Annexure-A8 sale notice was published in two leading newspapers, Mathrubhoomi edition and The Hindu edition.

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The applicant has miserably failed to prove his case that he is entitled to get the reliefs sought for in the SA.

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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.149 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 6^th day of February, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

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SA No.149 of 2022

S C H E D U L E

District : Kozhikode Taluk : Kozhikode Village : Kuttikkattoor Re. Sy. No. : 16/1B

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Description

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All that forms part and parcel of land having an extent of 13.75 cents in Re.Sy. No.16/1B in Kuttikkattoor Village, Kozhikdoe Taluk, Kozhikode District.

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Four Boundaries (as per sale deed)

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East : Valiya Myladikummu South : Bhagapathrathile 3-am number West : Valiya Myladikunnu ippol edavazhy North : Bhagapathrathile 1-am number.

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Page 5 of 7

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SA No.149 of 2022

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

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Sl. No.	Date	Particulars
1.	---	True copy of the statement of account for the period of 14.11.2014 to 26.09.2020.	Annexure-A1
2.	---	True copy of the treatment summary.	Annexure-A2
3.	11.07.2019	True copy of Section 13(2) notice.	Annexure-A3
4.	02.10.2019	True copy of the paper publication on Section 13(4) notice (English translation ofthe samealso producedherewith)	Annexure-A4
5.	09.11.2021	True copy of CMP No.824/2021 before the CJMCourt,Kozhikode	Annexure-A5
6.	14.01.2022	True copy of the order in CMP No.824/2021	Annexure-A6
7.	19.03.2022	True copy of the Advocate Commissioner notice.	Annexure-A7
8.	05.03.2022	True copy ofthe salenotice.	Annexure-A8

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

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Sl. No.	Date	Particulars
1.	---	True copy of the postal receipts evidencing dispatch of Annexure-A3 demand notice to the applicant and the guarantor.	Annexure-B1
2.	19.09.2019	True copy of the request letter issued by the applicant	Annexure-B2
3.	27.09.2019	True copy of the possession notice issued by the defendant bank.	Annexure-B3
4.	---	True copy of the possession notice publishedin ‘Deepika’	Annexure-B4
5.	---	True copy of the possession notice publishedin ‘New Indian Express’	Annexure-B5

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Page 6 of 7

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SA No.149 of 2022

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6.	---	True copy of the postal receipts evidencing dispatch of Annexure-B2 possession notice to the applicant and the guarantor.	Annexure-B6
7.	---	True copy of the acknowledgement card evidencing receipt of Annexure-B5 possession notice.	Annexure-B7
8.	15.12.2022	True copy of the Valuation Report issued by the approved valuer by the defendant bank.	Annexure-B8
9.	---	True copy of the returned envelops addressed to the applicant and the guarantor.	Annexure-B9
10.	---	True copy of the sale notice published in ‘Mathrubhoomi’	Annexure-B10
11.	---	True copy of the sale notice published in ‘TheHindu”.	Annexure-B11

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 7 of 7

C K Prakasan v. Catholic Syrian Bank Limited

Case brief

What is this about?

What the court decided

C K Prakasan v. Catholic Syrian Bank Limited

Case brief

What is this about?

What the court decided

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