Dismissed

Jeevankiran v. South Indian Bank

DRT9 Jul 2024SA/295/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the Securitization Application filed by four applicants against South Indian Bank. The court held that applicants were estopped from claiming properties were agricultural after executing non-agricultural declarations and found the bank complied with SARFAESI Act requirements for notices and possession.

What did the court decide?

Application dismissed. No costs awarded to either party.

Jeevankiran versus South Indian Bank — Banking and Recovery | 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 9^th DAY OF JULY, 2024

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

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S.A No. 295 of 2023

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Between

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M/s. Jeevankiran, a Charitable Society registered under the Travancore-Literary, Scientific and Charitable Societies Registration Act, 1955 having its Registered Office at Kozhikkottu Puthenpurayil,

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Oliyappuram P.O., Koothattukulam, Ernakulam -686662, represented by Its Secretary Smt. Asha Paul @ Asha Abi, W/o. Abi T.I.,

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Thuruthiyil House, Kottappady P.O Kothamangalam, Ernakulam-686695.

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Benny K. Joseph, S/o. K.S.Joseph, Kozhikkottu Puthenpurayil, Oliyappuram P.O., Koothattukulam, Ernakulam -686662.

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Sangeetha Joseph, W/o. Benny K. Joseph, Kozhikkottu Puthenpurayil, Oliyappuram P.O., Koothattukulam, Ernakulam -686662.

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Abi T.I. @ Abi Issac, S/o. Issac, Kozhikkottu Puthenpurayil, Oliyappuram P.O., Koothattukulam, Ernakulam -686662.

--- Applicants

SA No.295 of 2023

And

The South Indian Bank Ltd. Regional Office at Thrissur, Platinum Jubilee Building, Civil Lane Road, Ayyanthole, Thrissur – 680003, Represented by its Chief Manager and Authorized Officer.

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--- Defendant

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This Securitization Application coming on 15.03.2024 for final hearing before me in the presence of Mr. Bobby Mathew Koothattukulam, Advocate for the Applicants and Mr. Anto Thomas Adipuzha, 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 23.05.2023 seeking to set aside Annexure-1 Demand Notice and Annexure-5 Possession Notice and declare that classification of the loan accounts of the applicants as NPA by the defendant is illegal and invalid and declare that the proceedings initiated under the SARFAESI Act pursuant to Annexure-1 Demand Notice and Annexure-5 Possession Notice are illegal and invalid and restore the possession of the secured assets to applicants 2 to 4 and to declare that all proceedings leading to Annexure-14 notice issued by the Advocate Commissioner in MC No.680/2023 are unlawful, invalid and unsustainable and set aside Annexure-14 notice and cost of this proceedings.

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Availment of term loan of Rs.4 Crores on 31.03.2017 and another term loan of Rs.4 Crores on 07.03.2018 and another term loan of Rs.5 Crores on 28.12.2018 in the defendant bank upon creation of equitable mortgage over the schedule-A to C properties to the SA belonging to the applicants 2 to 4 by deposit of title deeds Annexure-A6 to A8 is admitted by the applicants in the S.A.

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The applicants have admitted in the S.A the 1^st applicant could not stick on to the repayment schedule, resulting the loan accounts being sticky. The defendant has contended in the written statement that since borrower and guarantor defaulted the repayment of credit facilities, their loan accounts were classified as NPA on 29.11.2022 as per the RBI guidelines. It is therefore evident that since the applicants

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SA No.295 of 2023

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defaulted the repayment of the outstanding loan due, their loan accounts were classified as NPA on 29.11.2022.

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The defendant bank issued Demand Notice dated 23.01.2023, Annexure-A1 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 notice. The defendant had averred in the written statement that the applicants did not send any statutory representation under Section 13 (3A) of the SARFAESI Act, 2002 though they received the Demand Notice. Annexure-A2 copy of the letter dated 24.06.2022, Annexure-A3 e-mail communications dated 07.11.2022 and 28.10.2022 sent by the1st applicant to the defendant are the representations made prior to issuance of Annexure-A1 Demand Notice. However, the defendant sent reply, Annexure-A4 to the applicants refusing the request of the 1^st applicant to restructure the loan accounts. In any event, the applicants having failed to send objection/representation to the Demand Notice are not entitled to get the relief of setting aside the Demand Notice.

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Since the applicants failed to respond to the terms of the Demand Notice, the defendant issued Annexure-A5 Possession Notice dated 13.04.2023 for symbolically taking possession of the secured asset. It is the contention of the applicants that, Possession Notice was issued without compliance of Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 and that Possession Notice was not served on the applicants and the guarantors and that it was not published in two leading newspapers within 7 days from the date of taking possession of the properties. The rival contention of the defendant is that Possession Notice was served to the applicants 1, 2 and 4 and that Possession Notice was sent to the 3^rd applicant was returned as un-served and that it was published in newspapers and that it was affixed on the secured assets. In order to prove the above contention, the defendant has produced copies of postal receipts, Annexure-B5, and copies of acknowledgment cards and copy of returned postal cover Annexure-B6(a) and copies of paper publications, Annexure-B7 and B8 and copy of photograph Annexure-B9. A perusal of Annexure-B5 to B9 shows that Possession Notice was served to applicants 1, 2 and 4 and that Possession Notice could not be served on 3^rd applicant since he had shifted his residential address and that Possession Notice was published within the period of 7 days from the date of its issuance in two leading newspapers one in English edition The Hindu and the vernacular language edition Malayala Manorama and that Possession Notice was affixed on the conspicuous part of the secured assets.

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The two main contentions raised in the SA are schedule A to C scheduled properties are un-identifiable since these are lying contiguously as a single plot along with adjacent properties without

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SA No.295 of 2023

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demarcation of boundaries and that these properties are agricultural lands. The rival contention of the defendant is that A to C schedule properties are identifiable and that these properties are not adjacent properties and A to C scheduled properties are situated at Kottappady Village, Koothattukulam Village and Marady Village respectively and these properties are identifiable with boundaries on four sides. The above contention of the defendant is not challenged nor refuted by the applicants. Further, the applicants have not produced any material before this Tribunal to substantiate their above contention.

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The applicants have produced Annexure-A9 pertaining to ‘A’ schedule property and B10 pertaining to B schedule property, copies of certificates issued by the Agricultural Officer and Annexure-A11 copy of sketch mahazar issued by the Village Officer, Muvattupuzha to prove their contention that A to C schedule properties are agricultural properties. In Annexure-A9, it is stated that Abi T.I. @ Abi Issac (4^th applicant) is cultivating nutmeg, coconut, arecanut etc in the property which is agricultural/cultivating land. In AnnexureA10 it is stated that, Sri. Benny K. Joseph (2^nd applicant) is cultivating arecanut, coconut, nutmeg, pineapple, ginger, turmeric in the land. There is no mention in Annexure-A9 and A10 that the Agricultural Officer personally inspected the aforesaid properties and verified that the properties are agricultural lands. In Annexure-A11, which is sketch mahazar, it is mentioned that there is 10 coconut trees and pineapple cultivation in the property. But there is no mention that the property is agricultural land. Hence no reliance can be placed upon Annexure-A9 and A11 to accept the contention of the applicants that ‘A’ to ‘C’ schedule properties are agricultural properties.

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Be that it may so, a perusal of Annexure-B3, copy of deed of declaration dated 07.03.2018 executed by 2^nd and 3^rd applicants and Annexure-B4 copy of deed of declaration dated 07.03.2018 executed by the 4^th applicant in favour of the defendant bank would show that the applicants 2 and 4 have declared that their properties over which security interest is created are not agricultural in nature and usage and that the lands shall continue to be in non-agricultural usage until the full tenure of the loan. The applicants having executed the aforesaid declaration letters are estopped from contending now that the secured assets are agricultural lands.

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It is submitted by the counsel for the defendant that the applicants have not produced any records to show that secured assets are agricultural properties on the date of creation of security interest and that even if the secured assets are agricultural properties, without admitting, since the applicants have created security interest in respect of the alleged agricultural lands it would show that they did not treat the lands as agricultural lands. In support of his above submissions, he relied on the judgments of the Hon'ble Supreme

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SA No.295 of 2023

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Court delivered in Indian Bank Vs. K. Pappireddiyar [(2018) 18 SCC 252] and in ITC Limited Vs. Blue Coast Hotels Private Limited & others [(2018) 15 SCC 99].

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In Indian Bank Vs. K. Pappireddiyar [(2018) 18 SCC] the Hon’ble Supreme Court has held as follows:

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“9. The classification of land in the revenue records as agricultural is not dispositive or conclusive of the question whether the SARFAESI Act does or does not apply. Whether a parcel of land is agricultural must be deduced as a matter of fact from the nature of the land, the use to which it was being put on the date of the creation of the security interest and the purpose for which it was set apart.”

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In ITC Limited Vs. Blue Coast Hotels Pvt. Ltd. & others [2018 (15) SCC] the Hon'ble Supreme Court has held as follows :

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“ Obviously, since no security interest can be created in respect of agricultural lands and yet it was so created, goes to show that the parties did not treat the land as agricultural land and that the debtor offered the land as security on this basis .”

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In the present case on hand, the applicants have not produced any records to show that the secured assets were agricultural lands on the date of creation of security interest. Even assuming for argument’s sake that the secured assets are agricultural lands, in the light of the dictum laid down in ITC Limited Vs. Blue Coast Hotels Pvt. Ltd. & others [(2018) 15 SCC] the applicants are not entitled to claim exemption under Section 31 (i) of the SARFAESI Act, 2002 on the ground that the secured assets are agricultural lands.

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It is submitted by the counsel for the applicants that ‘A’ schedule property was given to the 4^th applicant by way of settlement deed No.2255/1991 of Kothamangalam SRO, Annexure-A6 subject to the life interest of her mother who is still alive and that she is not a party to the mortgage and that Annexure-A1 and A5 notices were not served on her and that therefore, the defendant cannot take possession of ‘A’ schedule property during the lifetime of mother of the 4^th applicant.

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SA No.295 of 2023

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Per contra , the counsel for the defendant submitted that the life interest over the ‘A’ schedule property was released in favour of the 4^th applicant as per the release deed No.2022/2013 of Kothamangalam SRO on 17.04.2013 and that hence the 4^th applicant alone has valid and absolute title, possession and enjoyment over the ‘A’ schedule property and that the applicants have suppressed the above fact before this Tribunal. The applicants have not produced the copy of the settlement deed No.2255/1991 of Kothamangalam SRO to substantiate their contention that the mother of the 4^th applicant is having the life interest over the ‘A’ schedule property. Though the defendant has not produced the release deed No.2022/2013 of Kothamangalam SRO, the above averment of the defendant is not challenged or refuted by the side of the applicants. Therefore, the contention of the applicants that mother of the 4^th applicant having life interest over the ‘A’ schedule property is liable to be rejected.

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The defendant filed application and affidavit in MC No.680/2023 before the Additional Chief Judicial Magistrate Court (MPs/MLAs) Ernakulam under Section 14 of the SARFAESI Act, 2002. Order came to be passed appointing Advocate Commissioner for taking physical possession of the secured assets. Pursuant to the direction given to the Advocate Commissioner, in MC No.680/2023 by the Additional Chief Judicial Magistrate Court (MPs/MLAs) Ernakulam, he issued Annexure-A14 notice to the applicants informing them that he would take physical possession of the secured assets. The applicants have not produced copy of the application and affidavit filed in MC No.680/2023 and also the copy of the Order passed by the learned Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam in MC No.680/2023. The applicants have also not averred in the SA as to whether requirements contemplated under Clause (i) to (ix) to provisions Section 14(1) of SARFAESI Act, 2002 was not complied with in respect of the affidavit filed in MC No.680/2023 and also as to whether the learned Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam passed order for taking physical possession of the secured assets without having perused the contents of the affidavit and the documents and having satisfied over the same. Without assailing the aforesaid aspects, the challenge made by the applicants in respect of issuance of Annexure-A14 Advocate Commissioner notice is unsustainable, since the issuance of Annexure-A14 notice is not a measure.

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SA No.295 of 2023

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In view of the foregoing reasons and discussions this Tribunal holds that the applicants are not entitled to get the reliefs sought for in this SA. In the result, S.A No.295 of 2023 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 9^th day of July, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

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SA No.295 of 2023

A – Schedule Property

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District : Ernakulam Sub District : Kothamangalam Taluk : Kothamangalam Village : Kottappady Sy. Nos. : 256/1A & 262/1/34/H1/26 Extent : 45.56 Ares

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Description

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All parts and parcel of land having an extent of 45.56 Ares comprised in Sy. Nos.256/1A & 262/1/34/H1/26 of Kottappady village, Kothamangalam Taluk, Ernakulam District, with all the improvements including the residential building standing therein together with all fixtures, fittings thereon and all the trees and cultivations thereon covered by Sale Deed No.2255/1991 of Kothamangalam SRO.

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Boundaries

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North : Property of Issac Thuruthiyil (executant) and road. South : Property of Thuruthiyil Varghese East : Properties of Skaria and Annamma West : Property of Thuruthiyil Thomas and road

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SA No.295 of 2023

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B – Schedule Property

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District : Ernakulam Sub District : Koothattukulam Taluk : Muvattupuzha Village : Koothattukulam Sy. Nos. : 879/3B1 Extent : 6.07 Ares

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Description

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All parts and parcel of land having an extent of 6.07 Ares comprised in Sy. Nos.879/3B1 of Koothattukulam village, Muvattupuzha Taluk, Ernakulam District, with all the improvements including the residential building standing therein together with all fixtures, fittings thereon and all the trees and cultivations thereon covered by Sale Deed No.1244/2002 of Koothattukulam SRO.

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Boundaries

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North : Property of Sosamma Joseph. South : Property of Sosamma Joseph and road East : Properties of Sosamma Joseph West : Property of Sosamma Joseph

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SA No.295 of 2023

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C – Schedule Property

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District : Ernakulam Sub District : Muvattupuzha Taluk : Muvattupuzha Village : Marady Sy. Nos. : 293/15 & 294/7 Extent : 14.23 Ares

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Description

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All parts and parcel of land having an extent of 14.23 Ares comprised in Sy. Nos.293/15 & 294/7 of Marady village, Muvattupuzha Taluk, Ernakulam District together with all the improvements including trees and cultivation thereon covered by Sale Deed No.3445/1998 of Muvattupuzha SRO.

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Boundaries

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North : Property of Mandapathil Sreedharan South : Property of Nedumparayil K.K. Ravi East : Road West : 3 feet pathway

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SA No.295 of 2023

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

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Sl. No.	Date	Particulars
1.	23.01.2023	True copy of the Demand Notice issued by the defendant under Section 13(2) of the SARFAESI Act, 2002.	Annexure-1
2.	24.06.2022	True copy of the letter submitted by the 1^stapplicant.	Annexure-2
3.	07.11.2022 28.10.2022	True copy of email communication of the 1^stapplicant and reply mail sent by the defendant.	Annexure-3
4.	21.07.2021	True copy of the letter of the defendant refusing the request of the 1^stapplicant torestructure theloan.	Annexure-4
5.	13.04.2023	True copy of the Possession Notices issued by the defendant under Sec.13(4) ofthe SARFAESI Act, 2002	Annexure-A5
6.	16.05.1991	True copy of the Settlement Deed No.2255/1991 of Kothamangalam SRO relating to A schedule property with Englishtranslation.	Annexure-6
7.	22.09.2001	True copy of the sale deed No.1244/2001 of Koothattukulam SRO relating to B schedule property with Englishtranslation.	Annexure-7
8.	18.08.1998	True copy of the settlement deed No.3445/1998 of Muvattupuzha SRO, relating to C schedule property with Englishtranslation.	Annexure-8
9.	27.02.2023	True copy of the certificate issued by the Agriculture Officer, Krishi Bhavan, Kottappady relating to A schedule propertywith Englishtranslation.	Annexure-9
10.	01.03.2023	True copy of the certificate issued by the Agriculture Officer, Krishi Bhavan, Koothattukulam relating to B schedule propertywith Englishtranslation.	Annexure-10
11.	01.06.2009	True copy of sketch Mahazar of C schedule property prepared by the Village Officer, Muvattupuzha with Englishtranslation.	Annexure-11

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SA No.295 of 2023

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12.	15.03.2016	True copy of Sale deed No.392/2016 of Koothattukulam owned by the second applicantwith Englishtranslation.	Annexure-12
13.	15.03.2016	True copy of Sale deed No.393/2016 of Koothattukulam owned by the second applicantwith Englishtranslation.	Annexure-13
14.	18.10.2023	True copy of the notice of the Advocate Commissioner Binesh P Baby in MC No.680/2023 on the file of the Additional Chief Judicial Magistrate Court (MPs/MLAs)Ernakulam.	Annexure-14
15.	02.11.2023	True copy of the report of the Kerala State Remote Sensing and Environment Centre, Thiruvananthapuram obtaining undertheRight toInformation Act.	Annexure-15
16.	20.09.2014	True copy of the Sanction letter/	Annexure-16
17.	27.12.2018	The sanction letter/or renewal of credit facilities.	Annexure-17

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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.	07.03.2018	True copy of the credit facility agreement executed by the applicants in favouroftheBank.	Annexure-B1
2.	28.12.2018	True copy of the credit facility agreement executed by the applicants in favouroftheBank.	Annexure-B2
3.	07.03.2018 28.12.2018	True copy of the Deed of Declaration from mortgagor executed by the 2^nd& 3^rdapplicantsin favouroftheBank.	Annexure-B3
4.	07.03.2018 28.12.2018	True copy of the Deed of Declaration from mortgagor executed by the 4^th applicantin favouroftheBank.	Annexure-B4
5.	24.04.2023	True copy of the postal receipts issued from the Postal Department while sendingPossession Notice.	Annexure-B5
6.	---	True copy of the acknowledgment cards addressing to the applicants.	Annexure-B6
7.	---	True copy of the postal cover of the Possession Notice addressing applicant No.3	Annexure- B6(a)

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SA No.295 of 2023

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8.	---	True copy of the Possession Notice publishedin MalayalaManorama daily	Annexure-B7
9.	---	True copy of the Possession Notice publishedin TheHinduDaily.	Annexure-B8
10.	---	True copy of the photographs showing the affixture of Possession Notice on the secured assets.	Annexure-B9

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Jeevankiran v. South Indian Bank

Case brief

What is this about?

What did the court decide?

Jeevankiran v. South Indian Bank

Case brief

What is this about?

What did the court decide?

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