Dismissed

P B Abdul Basheer v. State Bank of India

DRT23 Feb 2024SA/304/2023

Case brief

AI extract

What is this about?

A debtor challenged various notices under the SARFAESI Act, claiming lack of security registration, excessive dues, and procedural irregularities in possession and sale notices. The Tribunal found security interest was registered, the claim was supported, and the petitioner failed to prove procedural flaws, dismissing the application.

What did the court decide?

The Securitization Application No. 304 of 2023 is dismissed with no costs awarded to either party.

P B Abdul Basheer versus State Bank of India — 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 23^rd 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. 304 of 2023

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Between

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P.B. Abdul Basheer, S/o. P.S. Bava, Proprietor, M/s. Periyar Traders, Pannikode, Kunnissery P.O. Palakkad – 678681.

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--- Applicant

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And

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State Bank of India,

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rep. by its Branch Manager,

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Erimayur Branch, Palakkad.

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The Authorised Officer, State Bank of India, Asset Recovery Management Branch, R.S. Building, M.G. Road

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Ernakulam – 682 011.

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--- Defendants

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This Securitization Application coming on 25.01.2024 for final hearing before me in the presence of Mr. V.K.Peer Mohamed Khan, Advocate for the Applicant and Mr. Tom K. Thomas, Advocate 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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SA No.304 of 2023

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O R D E R

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This Securitisation Application was filed on 03.04.2023 seeking to pass an order setting aside Annexure-IX Demand Notice and Annexure-X Possession Notice against the properties scheduled therein, and restricting the defendant bank from evicting the applicant from the properties and to restrain the defendants from proceeding with Annexure-IX and X proceedings in taking possession and declaring that the defendant bank is not entitled to proceed against the properties of the applicants under SARFAESI Act and to set aside the Demand Notice issued by the defendants and setting aside Annexure-XI Sale Notice dated 21.08.2023 and setting aside Annexure-XII to XIV proceedings in taking possession under Section 14 of the SARFAESI Act.

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The Counsel appearing for the applicant submitted that the revival letter dated 25.01.2018 is a falsely created document and that the amount claimed in Annexure-IX is excessive and that the cost and expenses allegedly incurred for earlier proceedings could not be added to the Demand Notice which was withdrawn and that no security interest has been created over the property and that security interest was not registered with the Central Registry and that the memo dated 25.01.2024 producing copy of CERSAI certificate as Annexure-B7 would prove that security interest not registered with the Central Registry for the loan amount of Rs.24,00,000/- and that additional transaction by creating security interest was made on 16.01.2024 and that on the date of issuance of Annexure-IX Demand Notice dated 13.09.2022 the defendant bank has not authorized to initiate SARFAESI proceedings against the property for the alleged secured amount of Rs.57,61,769/- and that therefore, Possession Notice, Annexure-X issued pursuant to Annexure-IV Demand Notice is liable to be set aside and that the statement of accounts produced before the Chief Judicial Magistrate Court, Palakkad is not in tune with the claim made in the Demand Notice and in the affidavit filed under Section 14 of the SARFAESI Act, 2002 and that Annexure-XI sale notice dated 21.08.2023 is unsustainable and is liable to be set aside since it does not fulfil the provisions of Rule 8 (6)(A)(B) of the SARFAESI Act, 2002 on account of mentioning of different amounts and its issuance during the pendency of the S.A and failure to affix the sale notice as provided in Rule 8(7) of the SARFAESI Act, 2002 and that reserve price fixed in the sale notice is too low and that the defendants failed to take the valuation of the properties as provided under Rule 8(5) of the SARFAESI Act, 2002 and that petition, Annexure-XII filed in MC No.513/2023 on the file of the Chief Judicial Magistrate Court Palakkad and Order, Annexure-XIII passed in MC

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Page 2 of 7

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SA No.304 of 2023

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No.513/2023 and Annexure-XV issued by the Advocate Commissioner are illegal and liable to be set aside.

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The Counsel appearing for the defendants submitted that there is no irregularity or infirmity in respect of issuance of Demand Notice and Possession Notice and that Annexure-B5 certificate establishes that security interest was registered under the CERSAI as early as on 28.08.2014 in respect of the housing loan of Rs.12,00,000/- and that Exhibit-B7 shows the existing registration under the CERSAI was updated for the total secured amount of Rs.38,75,000/- and that the outstanding amount mentioned in the sale notice is correct and that the sale notice affixed on the conspicuous part of the secured asset and that there is no impediment for issuance of sale notice during the pendency of the SA and that the reserve price fixed in the sale notice is correct and that the reserve price was fixed based on the valuation report obtained from the approved Valuer and that in Annexure-B6 application all the requisite details are furnished and that there is no illegality in the Order passed by the Chief Judicial Magistrate Court, Palakkad appointing Advocate Commissioner to take physical possession of the secured asset and that the account of the applicant was declared NPA as early as on 30.04.2017 and that thereafter interest and other charges were applied to the account and that the amount shown in the affidavit is the total amount including the unapplied interest, penal interest and other charges and that the amount demanded in the Demand Notice, Annexure-IX is Rs.57,61,769/- as on 14.09.2022 and that applicant did not send any objection/representation to the Demand Notice and that he is estopped from challenging that amount claimed in Annexure-B6 application is incorrect and that therefore the S.A is liable to be dismissed with costs.

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Availment of cash credit facilities from the 1^st defendant bank upon creation of security interest over the immovable property and default in repayment of the outstanding loan due is admitted by the applicant in the SA. Therefore the loan account of the applicant came to be classified as NPA and Demand Notices, Annexure-I, III, VII, VIII and subsequently Annexure-IX were issued to the applicant calling upon him to pay the outstanding loan due within 60 days from receipt of the notice. It is not in dispute that the applicant neither sent any objection/representation to the Demand Notices nor did he discharge the outstanding liability to the 1^st defendant bank. Therefore, Annexure-X Possession Notice dated 14.02.2023 was issued for taking symbolic possession of the secured asset. During the pendency of the SA, Annexure-XI sale notice dated 21.08.2023 issued to bring the secured asset for sale. Thereafter the defendants approached the Chief Judicial Magistrate Court, Palakkad by filing Annexure-XII petition. Annexure-XIII Order came to be passed in MC No.513/2023 appointing Advocate Commissioner for taking physical possession of

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Page 3 of 7

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SA No.304 of 2023

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the secured asset. Pursuant to the above order, the Advocate Commissioner issued Annexure-XIV notice dated 10.10.2023 to the applicant informing him that he would take physical possession of the secured asset.

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The defendants have produced Annexure-B5 copy of the certificate. A perusal of the same shows that security interest in respect of the secured asset was registered as early as on 28.08.2014 in respect of the housing loan of Rs.12,00,000/-. A perusal of Annexure-B7, copy of certificate produced by the defendants strengthens their contention that the existing registration with the CERSAI was updated for the total secured amount of Rs.38,75,000/-. Therefore, the contention of the applicant that security interest was not registered as per the proviso of Section 26(D) of the SARFAESI Act, 2002 does not hold good.

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The applicant has not produced any material before this Tribunal to substantiate his contention that the amount claimed in Annexure-IX Demand Notice is excessive. Further, the applicant having failed to send any objection/representation to the demand notice is estopped from raising the aforesaid issue now. The defendants have produced Annexure-B2 photograph, Annexure-B3 and B4 copies of paper publications to prove their contention that Possession Notice, Annexure-X was affixed on the conspicuous part of the secured asset and that it was published in two newspapers having wide circulation in that area, one in The Hindu edition dated 17.02.2023 and another in the regional language, in Mathrubhoomi edition dated 17.02.2023. Therefore, the contention of the applicant that issuance of Possession Notice is bad for having not complied with the Rule 8(1) and (2) of the Security Interest (Enforcement) Rules, 2002.

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In Annexure-XI sale notice the outstanding amount is mentioned as Rs.64,17,834/- as on 21.08.2023 with future interest and costs. The applicant has not clearly and specifically averred in the SA as to how different amounts is mentioned in the sale notice. The applicant has also not produced any material before this Tribunal to show that the reserve price fixed for the property is too low.

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The provisions under Section 14(1) of the SARFAESI Act, 2002 mandates to furnish the details as envisaged under the proviso (i) to (ix) in the affidavit filed before the Chief Judicial Magistrate Court. The applicant has not produced copy of the affidavit filed in MC No.513/2023 before the Chief Judicial Magistrate Court, Palakkad. However, the defendants have produced copy of the petition and affidavit filed in MC No.513/2023 as Annexure-B6. In the petition and affidavit all the details as required under Section 14(1) of the SARFAESI Act, 2002 are furnished. Hence this Tribunal holds that the

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Page 4 of 7

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SA No.304 of 2023

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applicant have failed to prove his contention that the details contemplated under the proviso (i) to (ix) to Section 14(1) of the SARFAESI Act, 2002 are not stated in the affidavit filed in MC No.513/2023. A perusal of Annexure-XIII Order shows that the learned Chief Judicial Magistrate, Palakkad after having perused the contents of the petition and affidavit and after having satisfied over the same, passed Order appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued Demand Notice Annexure-XIV to the applicant for taking physical possession of the secured asset pursuant to the direction given to him in MC No.513/2023. Hence this notice cannot be challenged in any manner. This Tribunal does not find any infirmity or flaw in Annexure-XII and XIII. The applicant has failed to make out a definite case so as to get the reliefs sought for in the S.A.

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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.304 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 23^rd day of February, 2024.

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/

Page 5 of 7

SA No.304 of 2023

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

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Sl. No.	Date	Particulars
1.	02.07.2016	True copy of Demand Notice	Annexure-I
2.	30.05.2017	True copy of Possession Notice	Annexure-II
3.	15.06.2020	True copy of Demand Notice	Annexure-III
4.	30.10.2021	True copy of the letter issued by the defendant bank regarding housing loan account.	Annexure-IV
5.	01.11.2021	True copy of the letter issued by the defendant bank regarding CC account	Annexure-V
6.	27.02.2023	True copy of the judgment in WP (C) No. 20748/2022 of the Hon'ble High Court of Kerala.	Annexure-VI
7.	03.02.2022	True copy of the Demand Notice issued by the defendant bank.	Annexure-VII
8.	06.05.2022	True copy of the Demand Notice issued by the defendant bank.	Annexure-VIII
9.	13.09.2022	True copy of the Demand Notice issued by the defendant bank.	Annexure-IX
10.	14.02.2023	True copy of the Possession Notice	Annexure-X
11.	21.08.2023	True copy of Sale Notice issued by the defendant.	Annexure-XI
12.	---	True copy of the petition filed by the defendant bank under Sec.14 of the SARFAESI Act.	Annexure-XII
13.	08.09.2023	True copy of the order of the CJM Court in MCNo.513/2023.	Annexure-XIII
14.	10.10.2023	True copy of the notice issued by the Advocate Commissioner.	Annexure-XIV

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Page 6 of 7

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SA No.304 of 2023

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

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Sl.	Date	Particulars
No.
1.	---	True copy of the postal acknowledgement card evidencing receipt ofthe same by theapplicant.	Annexure-B1
2.	14.02.2023	True copy of the photograph showing the affixture of the notice issued u/s.13(4) onthe secured asset.	Annexure-B2
3.	17.02.2023	True copy of the paper publication publishedin Hindu.	Annexure-B3
4.	17.02.2023	True copy of the paper publication publishedin Mathrubhumi.	Annexure-B4
5.	----	True copy of the certificate of Central Registry of Securitization Asset Reconstruction and Security Interest of India.	Annexure-B5
6.	----	True copy of the application filed u/s.14 of the SARFAESI Act, before the Chief Judicial Magistrate Court, Palakkad alongwiththe affidavit.	Annexure-B6
7.	---	True copy of CERSAI certificate in respect ofthe secured assets.	Annexure-B7

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 7 of 7

P B Abdul Basheer v. State Bank of India

Case brief

What is this about?

What did the court decide?

P B Abdul Basheer v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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