Allowed

Mohammad Sharief v. The Kottakkal cooperative Urban Bank Ltd.

DRT27 Nov 2024SA/255/2023

Case brief

AI extract

What is this about?

Debt Recovery Tribunal allowed a securitization application setting aside a possession notice and an order appointing an Advocate Commissioner. The court found irregularities in affixing the possession notice and held the CJM order liable to be set aside for lack of application of mind to the records.

What did the court decide?

Annexure-II, Annexure-III possession notices and Annexure-V order of Chief Judicial Magistrate were set aside; liberty granted to issue fresh possession notice in accordance with law.

Mohammad Sharief versus The Kottakkal cooperative Urban… — Insolvency and Bankruptcy | DRT (2024)

¶1

Fair Order

¶2

IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

¶3

DATED THIS 27^th DAY OF NOVEMBER, 2024

¶4

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

¶5

S.A No. 255 of 2023

¶6

Between

¶7

Muhamed Sherief, Pukkattil House, S/o. Muhamed Kasim Haji,

¶8

Puthur P.O., Malappuram – 676 503.

¶9

Three Star Granite Industries, Rep by Managing Partner, Muhammed Shareef P. Pukkattil House, Parakkori, Puthur P.O., Malappuram – 676 503.

¶10

--- Applicants

¶11

And

¶12

Kottakkal Co-operative Urban Bank Ltd. No.1378, represented by its Manager, Kottapady, Kottakkal, Malappuram District – 676 503.

¶13

The Authorized Officer, Kottakkal Co-operative Urban Bank Kottapady, Kottakkal, Malappuram District – 676 503.

¶14

--- Defendants

¶15

SA No.255 of 2023

¶16

This Securitization Application coming on 22.10.2024 for final hearing before me in the presence of Mr. V.K. Peer Mohamed Khan, Counsel appearing for the Applicants and Mr. B. Satheez Chandran, 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:

¶17

O R D E R

¶18

This Securitisation Application was filed on 26.04.2023 seeking to set aside Annexure-I Demand Notice and Annexure-II to AnnexureVI proceedings and to restrain the defendants from evicting the applicants from the secured assets and to allow the cost of this proceeding from the defendants.

¶19

The applicants have admitted the availment of credit facility from the 1^st defendant bank upon creation of equitable mortgage over their immovable property admeasuring 63.4 cents comprised in Sy. No.285/3-4 of Othukkungal Village, Malappuram District. The applicants have conveniently omitted to aver in the SA as to whether they were prompt in repayment of the outstanding loan due. However it is revealed from perusal of the written statement filed by the 2^nd defendant that since the applicants defaulted in repayment of the outstanding loan due, their loan account came to be classified as Nonperforming Asset on 30.06.2021 and demand notice dated 03.11.2021 Annexure-1 [English translated version of the Demand Notice is produced as Annexure-I(a)] 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. The applicants neither sent any objection/representation to the demand notice. According to the defendants, the applicants approached the defendants and requested to abstain from further proceedings and they agreed to pay of the liability within a short period and hence further measure was not initiated and but the applicants failed to remit the amount as agreed. Therefore, another Demand Notice dated 13.06.2022, Annexure-D1 was issued [English translated version of Annexure-D1 is produced as Annexure-D1(a)] to the applicants. The defendants have produced copy of postal acknowledgement card as Annexure-D2 to prove the service of the Demand Notice on the 1^st applicant. It cannot be disputed that the 2^nd applicant which is the granite industry is represented by the 1^st applicant who is its Managing Partner. Hence the service of Demand Notice on the 2^nd applicant is deemed to have been effected through the 1^st applicant. The defendants have admitted the payment of a sum of Rs.24,00,000/from 10.03.2022 to 29.03.2022 by the applicants. According to the defendants, the applicants did not make any further payments. Hence

¶20

Page 2 of 7

¶21

SA No.255 of 2023

¶22

this Tribunal does not find any procedural irregularity in respect of issuance of Annexure-I and Annexure-D1 Demand Notices.

¶23

Possession notice dated 16.02.2023, Annexure-II [English translated version of the possession notice is produced as AnnexureII(a)] for symbolically taking physical possession of the secured asset. In Annexure-D4 copy of the possession notice the 1^st applicant has signed in token of the receipt of the possession notice. It is the contention of the applicants that possession notice was not published in newspapers and it was not affixed on the secured asset. The defendants have produced Annexure-D5, D6 and D7 contending that possession notice was affixed on the secured asset and that it was published in Mathrubhoomi daily dated 19.03.2023 and Chandrika daily dated 19.03.2023.

¶24

In page No.5 of the written statement filed by the 2^nd defendant it is averred as follows. It (possession notice) has been duly pasted on the secured asset and the photograph of it is annexed as AnnexureD5. A perusal of Annexure-D5 shows that it is a copy of possession notice and not photograph showing the affixture of the possession notice on the secured asset. Therefore, it is evident that no proof has been filed by the defendants to show that possession notice was conspicuously affixed on the secured asset. Hence this Tribunal holds that the defendants failed to comply with Rule 8 (1) of the Security Interest (Enforcement) Rules 2002.

¶25

The defendants have averred in their written statement that the defendant bank took symbolic possession of the secured asset on 16.2.2023 and that the 2^nd applicant approached the defendant bank with request not to proceed against the secured asset stating that he would clear the due immediately and that hence the bank did not publish the possession notice in the newspaper. Annexure-II is the aforesaid possession notice. The defendants have not produced any material before this Tribunal to show that possession notice was not published in newspapers on the aforesaid ground. Further, in subsequent possession notice dated 14.03.2023, Annexure-III, there is no reference with regard to withdrawal of earlier possession notice dated 16.02.2023, Annexure-II. Without withdrawing or cancelling Annexure-II possession notice, the issuance of subsequent possession notice Annexure-III is unsustainable.

¶26

The defendants approached the Chief Judicial Magistrate Court Manjeri and filed Annexure-VI petition and affidavit and Annexure-D8 affidavit under Section 14 (1) of the SARFAESI Act, 2002. Order Annexure-V came to be passed appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued notice dated 18.05.2023, Annexure-VI to the 2^nd

¶27

Page 3 of 7

¶28

SA No.255 of 2023

¶29

applicant informing him that he shall inspect the property on 18.05.2023.

¶30

It is submitted by the counsel for the applicants that the defendants failed to furnish the necessary details as provided under Section 14 (1) (b) of the SARFAESI Act, 2002 and that description of the property has been wrongly mentioned in the application Annexure-IV and that the learned Chief Judicial Magistrate, passed an order appointing Advocate Commissioner to take physical possession of the secured asset without perusing the application and that therefore Annexure-V order is liable to be set aside.

¶31

Per contra , the counsel appearing for the defendants submitted that the secured asset is properly described in the application and affidavit filed in CMP No.1286/2023 and that the learned Chief Judicial Magistrate, Manjeri after having satisfied himself over the contents of the affidavit passed order appointing Advocate Commissioner to take physical possession of the secured asset and that hence the SA is liable to be dismissed with cost to the defendants.

¶32

Though the applicants failed to produce copy of the affidavit filed in CMP No.1286/2023 on the file of the Chief Judicial Magistrate Court, Manjeri, the defendants have produced the same as AnnexureD8. In Annexure-IV application, the description of the secured asset with its boundaries is clearly mentioned. Hence this Tribunal does not find any force in the submission of the counsel for the applicants that correct description of the property is not furnished in Annexure-IV application.

¶33

Annexure-V is the order passed by the Chief Judicial Magistrate Court Manjeri in CMP No.1286/2023. This Tribunal notices that the learned Chief Judicial Magistrate, Manjeri passed Annexure-V order by way of printed format which had already been prepared by filling of the blanks with ink. It is seen that in the order, the name of the Authorised Officer, total outstanding liability, date, name of the Advocate Commissioner, name of the Village Office and date of pronouncement of the order are written in pen. Hence this Tribunal is holds that the learned Chief Judicial Magistrate Manjeri did not peruse the records and apply his mind in order to get himself satisfied over the contents of the affidavit, Annexure-D8 and the documents filed in support of the affidavit. Therefore, this Tribunal is constrained to hold that Annexure-V order passed in MC No.1286/2023 by the learned Chief Judicial Magistrate, Manjeri is liable to be set aside as it does not satisfy the statutory requirements mandated under the proviso to Section 14 (1) (b) of the SARFAESI Act, 2002.

¶34

Page 4 of 7

¶35

SA No.255 of 2023

¶36

In view of the foregoing reasons, this Tribunal holds that Annexure-II possession notice dated 16.02.2023, Annexure-III possession notice dated 14.03.2023 and Annexure-V Order dated 12.04.2023 and Annexure-VI notice dated 18.05.2023 issued by the Advocate Commissioner are liable to be set aside.

¶37

It is made clear that the defendants shall be at liberty to issue fresh possession notice and initiate fresh measures for taking physical possession of the secured asset in accordance with law.

¶38

Resultantly, this SA No.255 of 2023 stands allowed. There shall be no order as to costs.

¶39

Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 27^th day of November, 2024.

¶40

(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 5 of 7

SA No.255 of 2023

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

¶45

Sl. No.	Date	Particulars
1.	03.11.2021	True copy of the Demand Notice issued by the defendant bank.	Annexure-I
2.	---	True English translation of Annexure-I document.	Annexure-I(a)
3.	16.02.2023	True copy of the Possession Notice issued by the defendant bank.	Annexure-II
4.	---	True English translation of Annexure-II document.	Annexure-II(a)
5.	14.03.2023	True copy of the Possession Notice issued by the defendant bank.	Annexure-III
6.	---	True English translation of Annexure-III document.	Annexure- III(a)
7.	---	True copy of the application filed by the defendant bank along with English translation.	Annexure-IV
8.	12.04.2023	True copy of the order in CMP No.1286/2023.	Annexure-V
9.	18.05.2023	True copy of the notice issued by the Advocate Commissioner	Annexure-VI

¶46

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

¶47

Sl. No.	Date	Particulars
1.	13.06.2022	Photocopy of Demand Notice	Annexure-D1
2.	---	English translation of Annexure-D1.	Annexure- D1(a)
3.	---	Photocopy of Acknowledgment card	Annexure-D2
4.	---	Photocopy of statement of account.	Annexure-D3
5.	14.03.2023	Photocopy of Possession Notice duly accepted.	Annexure-D4
6.	14.03.2023	Photocopy of Possession Notice duly affixed (photograph).	Annexure-D5

¶48

Page 6 of 7

¶49

SA No.255 of 2023

¶50

7.	19.03.2023	Photocopy of the paper publication in Mathrubhoomi daily and the Chandrika daily.	Annexure-D6
8.	19.03.2023	English translation of Annexure-D6	Annexure-D7
9.	12.04.2023	Photocopy of the affidavit submitted by the defendant bank in CMP No.1286/2023 on the file of Chief Judicial Magistrate CourtManjeri.	Annexure-D8

¶51

(Su. WILLYAHM) PRESIDING OFFICER

¶52

Mj/

¶53

Page 7 of 7

Mohammad Sharief v. The Kottakkal cooperative Urban Bank Ltd.

Case brief

What is this about?

What did the court decide?

Mohammad Sharief v. The Kottakkal cooperative Urban Bank Ltd.

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

Mr Beeran Ali versus South Indian Bank

Hdfc Bank versus Bhavani Enterprise

Punjab National Bank (E-Oriental Bank of Commerce) versus Sh. Gobind Bansal

Sri Ram Prakash Sahani versus State Bank of India

Canara Bank (Syndicate Bank) versus M/S C.V. Mart

Kotak Mahindra Bank Limited versus Shri Ranjodh Singh