Allowed

Ms Baldev Raj Bhushan Kumar v. Yes Bank

DRT8 Apr 2024SA/1/2024

Case brief

AI extract

What is this about?

In this Securitization Application, the applicant challenged the bank's reliance on Section 26-D of the SARFAESI Act, citing defective CERSAI registration wherein two distinct properties were recorded under a single entry without clear distinction. The court allowed the application on the grounds that the registration was imprecise and insufficient to establish valid security interest.

What did the court decide?

The Securitization Application was allowed due to the absence of proper CERSAI registration.

Ms Baldev Raj Bhushan Kumar versus Yes Bank — Contract and Commercial Disputes | DRT (2024)

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SA No.01/2024

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA No.01 of 2024 M/s Baldev Raj Bhushan Kumar Versus yes Bank and others

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08.04.2024 Item No.64

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Argued by: Sh.Akhilesh Vyas, Counsel for the Applicant. Sh.Amit Rishi, Counsel for respondent Bank.

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M/s Baldev Raj Bhushan Kumar (Applicant) has filed this Securitization Application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), against the Authorized Officer, Yes Bank and others (Respondents).

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Admittedly, Applicant had availed some loan &om the respondent Bank. To secure the same, Rishad Madaan and Neelam Madaan had created security interest in respect of a shop and a residential house, in favour of the Bank. Applicant did not make the repayment of the loan, and Bank initiated the SARFAESI proceedings.

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It is stated that the possession of the secured asset is fixed up for tomorr'ow. Mr.Vyas, counsel for the Applicant has argued that there is no proper CERSAI registration in favour of the Bank. It is stated that security interest was created in respect of two properties i.e. a shop and a residential house. However, by virtue of one registration, security interest was created in respect of these two properties, in favour of the Bank. It is stated that as a rule, the Bank should have got two CERSAI registrations. Counsel has drawn my attention to Debtor Based Search Report (Annexure R-4). Mr. Vyas has argued that in the column of assets details, it is stated as 'residential’ and in the survey number it is mentioned as 'Shop No. 25 and House No. 13’. 1t is stated that the properties are situated at Subzi Man(ii, Celebration Enclave Area, inside New And IV[andi.

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Mr.V)'as has argued that from a look at the CERS AI registration, it is difficult to make out as to in respect of which property the security interest was created by the Applicant, in favour of the Bank. As per Section 26-D o: the SARFASI Act, the secured creditor cannot initiate any measures unless the security interest has been duly registered with the Central Registry. That apart, it has been argued by Mr.Vyas that the Applicant is an MSME unit. However, 1

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SA No.01/2024

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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b e

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the case of the Applicant was not placed before the MSME committee, before declaring the account NPA.

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On the other hand, Mr.Rishi, counsel for the respondent Bank has argued that there was proper CERSAI registration and the matter was not required to be placed before the MSME committee. Mr.Rishi has relied upon the judgment passed by the Hon’bIo Supreme Court of India in Kotak &[ahindra Bank versus G&nar Corrugators Private Limited and others, Civil Appeal No.6662 of 2022 and judgment passed by the Hon’bIc Punjab and Haryana High Court, in Ms Ambco Embroideries versus State of Haryana and others, CWP No.59-2020, decided on 24.01.2024 .

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1 have considered the rival contentions.

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As far as, CERS Al registration is concerned, I am of the considered view that there is no proper CERS AI registration. In fact, it is not possible to make out as to whether the CERSAI registration was in respect of the house or shop and where they are situated. On this very ground, this SA deserves to be allowed. I order accordingly. As far as the judgments in Kotak Mahi7tdra Bank versus Girnar Corrugators Private Limited (supra) and M/s Awtbco Embroideries versus State of Haryana and others (supra) me concerned, I am of the considered view that both these judgments are beside the point as the issue involved in both the cases was entirely different.

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All the pending IAs, if any, are also disposed of, accordingly.

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Registrar is directed to send a copy of this order to all the parties, as per rule. Thereafter, file be consigned to record room after due combAance.

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Pronounced in open court. MANOJ/08.04.2024

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DRTiER;mm

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Ms Baldev Raj Bhushan Kumar v. Yes Bank

Case brief

What is this about?

What did the court decide?

Ms Baldev Raj Bhushan Kumar v. Yes Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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