Dismissed

Sukumaran v. South Indian Bank

DRT22 Oct 2024SA/25/2024

Case brief

AI extract

What is this about?

The appellate court dismissed an application by borrowers seeking to set aside bank notices and orders for possession of mortgaged property, holding that notices were validly issued and statutory requirements were met.

What did the court decide?

No costs.

What the court decided

Sukumaran versus South Indian Bank — 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 22^nd DAY OF OCTOBER, 2024

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

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SA No.25 of 2024

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Between

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Sukumaran, S/o. Sankaran, Kandachedath House, Ummalathoor, Kuttikkatoor, Kozhikode – 673 008.

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Sunitha A., D/o. Sukumaran, 4/644, Panagattu,

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Indeevaram, Feroke P.O., Kozhikode – 673 631.

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--- Applicants

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And

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The South Indian Bank Ltd., Branch Office @ Feroke, Represented by its Branch Manager, Do. No. 234 A, Madhavi Building, Market Road, Feroke, Kozikode, Kerala -673 631.

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The Authorized Officer, The South Indian Bank Ltd. Regional Office, Happy Tower, Vaikom Muhammed Basheer Road, Mananchira, Kozhikode-673 001.

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--- Defendants

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SA No.25 of 2024

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This Securitization Application coming on 11.09.2024 for final hearing before me in the presence of Mr. Raynold Fernandez N., Advocate appearing for the Applicants and Mr. Rajesh Rajagopala Pillai, Advocate appearing for the defendants 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 08.01.2024 seeking to set aside Demand Notice, possession notice and Annexure-A2 dispossession notice issued by the Advocate Commissioner and to set aside the order passed by the Chief Judicial Magistrate Court, Kozhikode in CMP No.1462/2023 and to declare that the classification of accounts as NPA is in violation of the guidelines issued by the RBI and to order restoration of possession of the property and to allow costs and compensation to the applicants.

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The applicants have admitted the availment of a sum of Rs.1,80,00,000/- from the defendant bank upon creation of mortgage over the immovable properties belonging to the 3^rd and 4^th applicants as the collateral security for the availment of the aforesaid credit facility. The applicants have also admitted their default in repayment of the outstanding loan due to the defendant bank. Hence the loan account of the applicants came to be classified as Non-performing Asset and demand notice dated 21.08.2018 Annexure-A1 was issued to the applicants calling upon them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. It appears that the applicants neither sent any objection/ representation to the demand notice nor did they clear off their liability due to the defendant bank.

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Therefore, possession notice dated 11.01.2023 Annexure – D3 was issued for symbolically taking physical possession of the secured asset. According to the defendants, the applicants declined to receive the possession notice. The defendants have produced copy of returned envelopes Annexure – D4 (series). A perusal of the same shows that postal envelope returned unserved in which possession notice was sent to both the applicants and co-borrowers. The defendants have produced Annexure–D5 and D6 copies of newspaper publications, Annexure–D7 copy of photograph in order to show that the possession notice was published in two leading newspapers one in Hindu daily on

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Page 2 of 6

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SA No.25 of 2024

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17.01.2023 and another one in Mathrubhumi dated 17.01.2023 and it was conspicuously affixed on the secured asset.

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Subsequently defendants filed application and affidavit Annexure – A1 under Section 14 of the SARFAESI Act, 2002 before the Chief Judicial Magistrate Court, Kozhikode. Order came to be passed in CRL. M.P. No.1642/2023 appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued notice dated 04.11.2023 Annexure–A2 to the applicants informing them that he would take physical possession of the property on or after 30.11.2023. The applicants having aggrieved against the above aforesaid measures filed this SA seeking for the relief stated supra .

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In Annexure – D1 Demand Notice, the availment of financial assistance to the limit of Rs.21,50,000/- on 07.11.2019 and the total outstanding amount of Rs.23,28,527.48 payable by the applicants and discretion of the property with boundaries are clearly mentioned. Therefore, the contention of the applicants that Demand Notice is invalid and is illegal and that description of property is incorrect is absolutely is incorrect. The applicants have not specifically averred in the SA as to how the amount mentioned in the Demand Notice is incorrect and that the classification of loan account as NPA is illegal. It is pertinent to mention here that the applicant who received the Demand Notice did not send any objection/representation to the Demand Notice.

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Annexure – D2 Demand Notice has been signed and sent by the Authorised Officer who is the 2^nd defendant. It is also mentioned in Annexure – D2 Demand Notice that he is the Chief Manager of the 1^st defendant bank. Hence, the contention of the applicants that 2^nd defendant is not authorised to sign the Demand Notice and that it was not issued by the secured creditor does not hold hood.

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The applicants have also not specifically averred in the SA as to how the outstanding amount mentioned in Annexure–D3 possession notice is incorrect. The defendants have produced Annexure–D5 and D6 copies of newspaper publications, Annexure – D7 copy of photograph in order to show that the possession notice was published in two leading newspapers one in Hindu daily on 17.01.2023 and another one in Mathrubhumi dated 17.01.2023. Therefore, this Tribunal does not find any substance in the contention of the applicants that possession notice is invalid and that it was issued in violation of Rule 8 Sub-rule 2 of the Security Interest (Enforcement) Rules 2002.

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Page 3 of 6

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SA No.25 of 2024

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The applicants have not produced any materials before this Tribunal to prove their contention that the defendants are maintaining bogus account statement and that higher amount is claimed by them. In Annexure – A1 petition, it is clearly mentioned that Mr. Amjith G.K. is the Chief Manager and the Authorised Officer of the defendant bank. Therefore, it is evident that Annexure – D1 application is filed by the secured creditor who happens to be the Authorised Officer. Therefore, this Tribunal does not find any force in the contention of the applicants that the officer who signed the Annexure – A1 is not an authorised officer.

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The applicants have not produced the copy of the affidavit filed in CMP No.1642/2023 filed by the defendants before the Chief Judicial Magistrate Court, Kozhikode and also the copy of the order passed in CMP No.1642/2023. It is also not the contention of the applicant that the statutory requirements contemplated under Clause (i) to (ix) to the proviso of Section 14(1) of the SARFAESI Act, 2002 was not complied with by the defendants in respect of filing of the affidavit in CMP No.1642/2023 It is also not the contention of the applicant that the Chief Judicial Magistrate Court, Kozhikode passed order without having perused the contention of the affidavit and the documents filed in support of the affidavit and having satisfied over the same. Without challenging the aforesaid measures, challenging Annexure–A2 notice is unsustainable since this notice is not the measures.

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The applicants having failed to prove their case are not entitled to get the reliefs sought for in this SA.

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In the result, SA No.25 of 2024 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 22^nd day of October, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 4 of 6

SA No.25 of 2024

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

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Sl.	Date	Particulars
No.
1.	13.09.2023	True copy of petition in CMP No.1642/2023 filed by the 2^nd defendant before the Chief Judicial Magistrate CourtKozhikode	Annexure-A1
2.	04.11.2023	True copy of the dispossession notice issued by theAdvocate Commissioner	Annexure-A2
3.	04.11.2023	Readable typed copy of Annexure-A2	Annexure-A2A

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

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Sl. No.	Date	Particulars
1.	17.05.2022	True copy of the Demand Notice.	Annexure-D1
2.	---	True copy of the postal acknowledgement cards signed by the 1^stapplicant and returned envelope addressed to the 2^ndapplicant	Annexure-D2 (series)
3.	11.01.2023	True copy of the possession notice.	Annexure-D3
4.	---	True copy of the returned envelopes carrying possession notice to the applicants.	Annexure-D4 (Series)
5.	17.01.2023	True copy of the possession notice publishedin HinduDaily (English)	Annexure-D5
6.	17.01.2023	True copy of the possession notice publishedin Mathrubhumi(Malayalam)	Annexure-D6
7.	11.01.2023	True copy of the photograph evidencing affixture onthe scheduled property.	Annexure-D7
8.	---	True copy of the printout of CERSAI registration with asset ID 200035411132	Annexure-D8
9.	23.11.2023	True copy of the judgment in WP(C) No.38267 of 2023 of the Hon’ble High Court of Kerala.	Annexure-D9

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Page 5 of 6

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SA No.25 of 2024

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01.12.2023 True copy of the order in IA No. 1/2023 Annexure-D10 in WP(C) No. 38267/2023 of the Hon’ble High Court of Kerala.

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 6 of 6

Sukumaran v. South Indian Bank

Case brief

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Sukumaran v. South Indian Bank

Case brief

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