Dismissed

Risheraj v. R v Dcb Bank Limited

DRT6 May 2024SA/34/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application challenging the bank's SARFAESI measures. The Tribunal held that since the deceased borrower had released her interest in the mortgaged property, issuing a notice to her legal heirs was unnecessary. The Tribunal also rejected claims that the notice description was incorrect or that petitioner payments were not accounted for.

What the court decided

AI extract

Risheraj v R versus Dcb Bank Limited — 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 6^th DAY OF MAY, 2024

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

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PRESIDING OFFICER

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S.A No. 34 of 2022

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Between

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Risheraj V.R., S/o.Rajappan P.K. Vattekkat House, Karimughal P.O Puthencruz, Ambalamedu, Ernakulam, Kochi-682 302.

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Sooraj V.R., S/o. Rajappan P.K. Vattekkat House, Karimughal P.O Puthencruz, Ambalamedu, Ernakulam, Kochi-682 302.

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Rajappan V.R., Vattekkat House, Karimughal P.O Puthencruz, Ambalamedu, Ernakulam, Kochi-682 302.

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--- Applicants

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And

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Authorized Officer, DCB Bank, Branch Office at No.6, Rajaji Road, Opp: Tennis Stadium, Nungambakkam, Chennai -600 034.

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--- Defendant

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SA No.34 of 2022

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This Securitization Application coming on 06.03.2024 for final hearing before me in the presence of Mr. Dileep Chandran, Advocate for the Applicants and Mr. Ashley John, Counsel 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 25.01.2022 seeking to set aside Annexure-A4 Demand Notice, Annexure-A5 Possession Notice, Annexure-A7 application and its affidavit and Annexure-A8 order issued by the Additional Chief Judicial Magistrate Court (for MLA's and MP's) Ernakulam in MC No.1037/2022.

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The applicants have admitted the availment of business loan of Rs.30 Lakhs in the defendant bank upon creation of security interest over the property belonging to the 1^st and 2^nd applicants, which is situated in Re. Sy No.51/12-4, Block No.39, Vattakkattu House, Karimugal P.O, Puthencruz Village, Kochi-23 as the collateral security in favour of defendant bank. The applicants have produced AnnexureA1 to A3 series which are copies of medical bills and discharge summary stating that huge amount had to be spent for the treatment and medical expenses of the 3^rd applicant and his wife Snehalatha Rajappan who are the parents of applicants 1 and 2. According to the applicants, due to the aforesaid medical expenses and Covid 19 pandemic, they could not repay the loan due. The applicants having agreed to the terms and conditions put forth by the defendant bank on the date of sanctioning of the loan amount that they would repay the outstanding loan due without default, are estopped from raising the aforesaid untenable reasons for their failure to repay the outstanding loan due.

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The applicants have themselves admitted in the SA that they were not in a position to repay the loan amount. Hence the loan account of the applicants came to be classified as Non-Performing Asset on 31.3.2021. Demand Notice dated 22.04.2021, Annexure-A4, was served to the applicants. Admittedly, applicants did not send any objection or representation to the Demand Notice.

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The learned counsel appearing for the applicants submitted that Demand Notice was not issued to all the legal heirs of the deceased borrower Snehalatha Rajappan and that the defendant has also admitted in Annexure-A7 that Demand Notice sent to Snehalatha Rajappan was returned with endorsement as ‘expired’ and that as per the community certificate, one Smt. Nisha who is the daughter of the 3^rd applicant and Snehalatha Rajappan is their legal heir and that

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Page 2 of 6

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SA No.34 of 2022

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since Demand Notice was not issued to her, the SARFAESI measures initiated by the defendant are invalid and that the Hon'ble High Court of Madras had held in Sheeba Philominal Merlin and others Vs. The Repartriates Co-Op Finance and Development Bank Ltd . that Demand Notice issued to dead person is invalid.

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The counsel appearing for the defendant submitted that there is no plea in the SA that Smt. Nisha is the legal heir of the deceased Snehalatha Rajappan and that secured asset is owned only by the 1^st and 2^nd applicants and that the 3^rd applicant and the deceased Snehalatha Rajappan had already released their interest in the secured asset by executing the Release Deed No.6995/2006 of Puthencruz SRO, Annexure-D1 (English translated copy of the same is produced as Annexure-D2) and that since they had already released their interest in the secured asset and there is no necessity to issue the Demand Notice to the legal heirs of deceased Snehalatha Rajappan and that as per Annexure-D2 release deed, only applicants 1 and 2 are the legal heirs of the 3^rd applicant and Snehalatha Rajappan and that the community certificate produced by the applicants does not specifically state that Smt. Nisha is their legal heir and that therefore Annexure-A4 Demand Notice is valid.

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It cannot be disputed that SARFAESI measures can be initiated against the defaulters who are the borrowers and guarantors and also against the legal heirs who acquire right, interest or title over the secured asset or other assets belonging to the borrowers and guarantors. In the present case on hand, it is established through the release deed, Annexure-D2 that both the 3^rd applicant and his wife, Snehalatha Rajappan had already released their right over the immovable property, which has been mortgaged with the defendant bank. Therefore, the death of Snehalatha Rajappan does not warrant issuance of the Demand Notice to her legal heirs. Hence the above submission of the counsel for the applicants does not hold good.

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The applicants have admitted the issuance and receipt of Annexure-A5 Possession Notice dated 02.12.2021. The applicants have averred in the SA that the description of the property given in Annexure-A5 is not correct and that there is a residential building in the secured asset and that the same is not mentioned in Annexure-A4 Demand Notice and Annexure-A7 petition filed under Section 14 of the SARFAESI Act, 2002. The object of issuance of Demand Notice to the borrower is to inform him of his default in repayment of the outstanding loan due and also of further measures, if he fails to respond to the terms of the Demand Notice. Therefore, it is not necessary or mandatory for the secured creditor to specifically mention in the Demand Notice about the nature of the property since the borrower is quite aware of the property mortgaged by him. Admittedly, there is no specific mention in Annexure-A4 Demand

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Page 3 of 6

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SA No.34 of 2022

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Notice with regard to the existence of the building. The applicants have not established as to whether they got any prejudice for the nonmentioning of the building in the secured asst. hence this Tribunal does not find any force in the above contention of the applicants. The applicants have also not clearly averred in the SA as to how the description of the property in Annexure-A5 Possession Notice is not correct.

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The defendant filed petition and affidavit, Annexure-A7 before the Additional Chief Judicial Magistrate Court (MPs/MLAs) Ernakulam under Section 14 of the SARFAESI Act, 2002. Order dated 06.01.2023, Annexure-A8 came to be passed in MC No.1037/2022 appointing Advocate Commissioner to take physical possession of the secured asset. Pursuant to the direction given to the Advocate Commissioner in MC No.1037/2022, he issued notice dated 23.01.2023, Annexure-A6 to the applicants for taking physical possession of the secured asset.

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It is not the contention of the applicants that all the requirements contemplated under the proviso (i) to (ix) to provisions of Section 14(1) of SARFAESI Act, 2002 were not complied with by the defendant in Annexure-A7 petition and affidavit. In Annexure-A7 all the details such as, availment of loan by the applicants in the defendant bank upon creation of security interest over the immovable property, registration of the security interest with CERSAI, default in repayment of the outstanding loan due, classification of loan account as NPA, issuance of Demand Notice to the borrowers, receipt of the Demand Notice by the borrowers, their failure to send objection to the Demand Notice, failure of the borrows to repay the outstanding loan due even after receipt of the Demand Notice, issuance of Possession Notice, the secured asset being free of any lease hold right, description of the secured asset with boundaries, total outstanding amount as on the date of filing the Annexure-A7 are furnished by the defendant. It is clearly mentioned in the description of the secured asset as all part and parcel of non-agricultural property, with all improvements and appurtenant having a total extent of 7.29 Ares. Thus it is evident that the word appurtenant refers to super structure or building put up on the mortgaged land. Hence this Tribunal does not find any force in the contention of the applicants that the existence of the building is not mentioned in Annexure-A7.

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A perusal of Annexure-A4 Demand Notice, A5 Possession Notice and also Annexure-A7 petition and affidavit, shows that the person who signed the aforesaid documents is the authorized officer of the defendant bank. Hence the contention of the applicants that the person who signed Annexure-A4, A5 and A7 is not the Authorized Officer of the defendant bank does not hold good.

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Page 4 of 6

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SA No.34 of 2022

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The applicants have averred in the SA that after issuance of the Demand Notice, they paid a sum of Rs.2,00,000/- and that it has not been accounted in their loan account. The applicants have not produced any material to prove the above payment of Rs.2,00,000/- to the defendant bank after receipt of the Demand Notice.

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The applicants have miserably failed to prove their case that they are entitled to get the reliefs sought for in the SA.

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In the result, S.A No.34 of 2022 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 6^th day of May, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 5 of 6

SA No.34 of 2022

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

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Sl. No.	Date	Particulars
1.	---	True copy of medical bills issued from medical TrustHospital,Ernakulam.	Annexure-A1
2.	---	True copy of medical bills issued from lakeshoreHospital,Nettoor,Ernakulam	Annexure-A2
3.	---	True copy of the discharge summary.	Annexure-A3
4.	22.04.2021	True copy of the Demand Notice	Annexure-A4
5.	02.12.2021	True copy of the Possession Notice	Annexure-A5
6.	23.01.2023	True copy of notice issued by Advocate Commissioner in MC 1037/2022 of Chief Judicial Magistrate Court, Ernakulam.	Annexure-A6
7.	---	True copy of MC No.1037/2022 along with its affidavit on the files of learned Additional Chief Judicial Magistrate Court (for MLA's andMP's)Ernakulam.	Annexure-A7
8.	06.01.2023	True copy of the order in MC No.1037/2022 along with its affidavit on the files of learned Additional Chief Judicial Magistrate Court (for MLA's andMP's)Ernakulam.	Annexure-A8

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List of documents filed by the defendant along with the written

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				statem	ent
Sl. No.	Date			Partic	ular	s
1.	---	True c No.6695/ executed Rajappan applicants	opy 200 by in .	of 6 of Rajapp favour	Pu an of	relea then & the	se cruz Sneh 1^st	deed SRO alatha & 2^nd	Annexure-D1
2.	---	Translated No.6695/ executed Rajappan applicants	200 by in .	copy 6 of Rajapp favour	of Pu an of	rel then & the	ease cruz Sneh 1^st	deed SRO alatha & 2^nd	Annexure-D2

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 6 of 6

Risheraj v. R v Dcb Bank Limited

Case brief

What is this about?

What the court decided

Risheraj v. R v Dcb Bank Limited

Case brief

What is this about?

What the court decided

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