Dismissed

Ummer K v. Urban Co. operative Bnak Ltd.

DRT29 Jul 2024SA/372/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed this Securitization Application filed by borrower Applicants challenging a notice issued by the bank and its Advocate Commissioner. The court held the property was not exempt agricultural land and the procedural challenge was unsustainable.

What did the court decide?

Securitization Application dismissed with a direction that no costs be awarded.

Ummer K versus Urban Co. operative Bnak Ltd. — 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 29^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. 372 of 2023

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Between

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Ummer K., S/o. Enu Haji, Kurukkan House, Valliyamcheri P.O., Malappuram – 679 327.

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Askan Traders, Represented by its Proprietor Ummer K., S/o. Enu Haji, Kurukkan House, Valliyamcheri P.O., Malappuram – 679 327.

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--- Applicants

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And

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The Urban Co-operative Bank Ltd., Perinthalmanna, P.B. No.10, Head Office, Perinthalmanna P.O Malappuram – 679 322, Represented by its General Manager.

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Authorized Officer, The Urban Co-operative Bank Ltd., Perinthalmanna, P.B. No.10, Head Office, Perinthalmanna P.O Malappuram – 679 322.

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--- Defendants

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SA No.372 of 2023

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This Securitization Application coming on 10.07.2024 for final hearing before me in the presence of Ms. Jinsamol, Advocate for the Applicants and Ms. Jayasree K.P., 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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O R D E R

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This Securitisation Application was filed on 19.07.2023 seeking to set aside Annexure-A3 notice as illegal and unsustainable and to declare that Annexure-A3 proceedings is not binding on applicants’ property including residential building covered under it and to realize the cost of the proceedings from the defendants.

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It is not in dispute that the applicants availed loan amount of Rs.1,46,00,000/- in the 1^st defendant bank upon creation of equitable mortgage over the 1^st applicant’s immovable property measuring an extent of 2.08 Acres situated in Re. Sy. No.179/2 in Edappatta Amsom Velliyancheri Desom of Malappuram District by executing Gehan Annexure-B1 in favour of the 1^st defendant bank. The applicants have admitted in the SA with regard to their default in repayment of the outstanding loan due. Hence loan account of the applicants came to be classified as NPA on 30.06.2018.

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Demand Notice dated 18.6.2019 was issued to the applicants calling them to repay the outstanding loan due within 60 days from the date of receipt of the notice. The applicants themselves have produced copy of the Demand Notice as Annexure-A1. Admittedly, the applicants neither sent any objection/representation to the Demand Notice nor did they clear the outstanding liability to the bank. Therefore Possession Notice dated 20.09.2019 was issued for symbolically taking possession of the secured asset. The applicants have themselves produced copy of the Possession Notice as AnnexureA2.

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Subsequently, the defendants approached the Chief Judicial Magistrate Court Manjeri and filed application under Section 14 of the SARFAESI Act, 2002. Order came to be passed in CMP No. 1545/2023 appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued notice dated 08.06.2023 Annexure-A3 to the applicants informing them that he would take physical possession of the secured asset on 24.06.2023.

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Page 2 of 5

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SA No.372 of 2023

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It is submitted by the counsel for the applicants that the Demand Notice does not mention the existence of any building and that the rate of interest calculated is incorrect and that untenable charges were added to the loan account of the applicants and that the secured is the agricultural property which is exempted under Section 31 (i) of the SARFAESI Act, 2002 and that Possession Notice was not published in newspapers and that therefore the SA may be allowed as prayed for.

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Per contra , the counsel appearing for the defendants submitted that in Annexure-B1 Gehan executed by the applicants in favour of the 1^st defendant bank, the existence of the building is mentioned and that Annexure-A1 Demand Notice mention the existence of the residential building and that interest has been charged as per the terms of the agreement and that Possession Notice was published in Desabhimani and Kerala Kaumudi dailies on 31.01.2020 and that secured asset is not an agricultural property and that therefore the SA may be dismissed with cost.

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In Annexure-A1 Demand Notice, the description of the property is given in vernacular language. Therefore as per the direction of this Tribunal the counsel appearing for the defendants have filed English translated version of Annexure-A1 pertaining to the schedule of the property along with memo. A perusal of the same shows that the existence of the building in the land is clearly mentioned.

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The applicants have not placed any material before this Tribunal to prove their contention that interest calculated is incorrect and that untenable charges were added to the loan account of the applicants.

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Possession Notice Annexure- A2 was issued as early as on 20.09.2019. The applicants having failed to challenge the Possession Notice within a period of 45 days from the date of issuance of the same are not entitled to challenge now, that Possession Notice was not published in newspapers. Be that it may so, the applicants are not challenging Annexure- A2 Possession Notice in this S.A.

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In K. Sreedhar Vs. M/s. Raus Constructions Pvt. Ltd. {2023 (1) Supreme 130} relied on by the Counsel for the defendants, the Hon’ble Supreme Court has held as follows :

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“It is settled law that only when the secured property is put to use as an agricultural land or when secured property was not used as a security by way of mortgage, can be exempted under

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Page 3 of 5

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SA No.372 of 2023

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Section 31(i) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002”.

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The applicants have not produced any material before this Tribunal to substantiate their contention that the secured asset was the agricultural property on the date of creation of security interest over the same. Therefore, there is no substance in the contention of the applicants that the secured asset is agricultural property.

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The applicants have not produced the copy of the affidavit filed in CMP No.1545/2023 filed by the defendants before the Chief Judicial Magistrate Court, Manjeri, and also the copy of the order passed in CMP No.1545/2023. However, the applicants have produced copy of the petition filed in CMP No.1545/2023. It is not the contention of the applicants 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.1545/2023. It is also not the contention of the applicants that the Chief Judicial Magistrate Court, Manjeri, 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 the notice Annexure-A3 issued by the Advocate Commissioner is unsustainable since this notice is not the measure contemplated under Section 13(4) of the SARFAESI Act, 2002.

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This Tribunal holds that the applicants having failed to establish their case, are entitled to get the reliefs sought for in the S.A.

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In the result, S.A No.372 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 29^th day of July, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 4 of 5

SA No.372 of 2023

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

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Sl. No.	Date	Particulars
1.	18.06.2019	True copy of the Demand Notice issued by defendants.	Annexure-A1
2.	20.09.2019	True copy of the Possession Notice issued by the defendants.	Annexure-A2
3.	08.06.2023	True copy of the Advocate Commissioner notice.	Annexure-A3

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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.	31.03.2018	True copy of the Gehan executed by the	Annexure-B1
		applicantin favourofthe bank.
2.	---	English Translation of Annexure-B1.	Annexure-B1a

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 5 of 5

Ummer K v. Urban Co. operative Bnak Ltd.

Case brief

What is this about?

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Ummer K v. Urban Co. operative Bnak Ltd.

Case brief

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