Dismissed

Siju Varghese v. South Indian Bank

DRT21 Feb 2024SA/395/2023

Case brief

AI extract

What is this about?

The tribunal dismissed applicants' security application challenging the bank's actions under the SARFAESI Act. The court held that notices were valid and actions were in accordance with the law, rejecting claims regarding agricultural land status and lack of court intervention.

What did the court decide?

Security application was dismissed with no costs awarded to the applicants.

Siju Varghese 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 21^st 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. 395 of 2023

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Between

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Mr. Siju Varghese,

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S/o. Cheriyan V., Kothekkal House, Rackad, Valakom, Muvattupuzha,

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Ernakulam – 682 316.

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M/s. Oasis Packaged Drinking Water Unit, Mekkadampu P.O Rackad, Valakom, Muvattupuzha, Ernakulam – 682 316, Represented by its Proprietor, Siju Varghese.

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Mrs. Suna Baby, W/o. Siju Varghese, Kothekkal House, Rackad, Valakom, Muvattupuzha, Ernakulam – 682 316.

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Mr. Cherian V., S/o. Cheriyan V., Kothekkal House, Rackad, Valakom, Muvattupuzha, Ernakulam – 682 316.

--- Applicants

SA No.395 of 2023

And

The Authorised Officer, Regional Office, South Indian Bank, SIB Building, Infopark Road, Rajagiri Valley P.O., Kakkanad, Ernakulam-682039.

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--- Defendant

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This Securitization Application coming on 21.12.2023 for final hearing before me in the presence of Ms. Jinnu Sara George, 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 22.06.2023 seeking to declare that the proceedings initiated under Section 13 of the SARFAESI Act, 2002 as against the properties mentioned in Annexures-A1, A4 and A5 are void ab initio; to pass an order setting aside Annexure-A1 demand notice u/s.13(2), Annexure-A4 possession notice u/s.13(4) and Annexure-A5 notice u/s.13(8) of the SARFAESI Act, 2002 with regard to the properties as scheduled to the notices and to award the costs to the applicants for the above proceedings.

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It is not in dispute with regard to availment of various credit facilities by the applicants from the defendant bank upon creation of equitable mortgage over the immovable properties in favour of the defendant bank. The applicants have not specifically averred in the SA as to whether they were prompt in repayment of the outstanding loan due. But a perusal of the averments of para 6 to the S.A would show that the repayment of the outstanding loan due became irregular after Covid-19 pandemic. However, the defendant has averred in his written statement that since the applicants defaulted in repayment of the outstanding credit facilities, their loan account was declared as NPA on 29.12.2022.

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Annexure-A1 Demand Notice dated 22.02.2023 was issued to the applicants calling upon them to repay the outstanding loan due within a period of 60 days from receipt of the Demand Notice. The applicants sent Annexure-A2 objection dated 06.05.2023 to the

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Page 2 of 6

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SA No.395 of 2023

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defendant stating that non-payment of the debt was not wilful due to the aftermath of Kerala Flood 2018 and Covid-19 pandemic, their business sustained loss and that the secured asset is agricultural property and that therefore issuance of Demand Notice is liable to be withdrawn and that the total amount is claimed in the notice is exorbitant including interest computation and that no compound interest/penal interest shall be charged pursuant to announcement of moratorium by the RBI. The defendant sent reply dated 09.05.2023, Annexure-A3 to the applicants. A perusal of the same shows that the defendant suitably replied parawise for the aforesaid issues raised by the applicants in Annexure-A2. Hence this Tribunal does not find any valid force in the contention of the applicants that the defendant issued reply without adverting to the objections raised in AnnexureA2.

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The Issuance of Annexure-A4 Possession Notice dated 11.05.2023 and the receipt of the same is admitted by the applicants in the S.A. The defendant issued Annexure-A5 notice dated 16.05.2023 to the applicants under Section 13(8) of the SARFAESI Act, 2002 informing them that the secured asset would be sold on expiry of 30 days from the date of receipt of the notice, if they failed to pay the amount due to the defendant bank. It is also clearly stated in Annexure-A5 that the date and time of auction shall be informed through a separate sale notice. The receipt of Annexure-A5 notice is admitted by the applicants in the S.A. Indisputably, the applicants did not clear their outstanding liability to the defendant bank even after receipt of Annexure-A5 which is the redemption notice.

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The defendant has produced copies of statement of accounts pertaining to the various loan accounts of the applicants as AnnexureB2 to B11. A perusal of the same shows that the outstanding amount mentioned in Annexure-A1 Demand Notice is correct. Further, the applicants have not placed any material before this Tribunal to substantiate their contention that huge amount is demanded in the Demand Notice and that exorbitant rate of interest is claimed in the Demand Notice. Annexure-A1 Demand Notice was issued by the Authorized Officer who is also designated as the Chief Manager of the defendant bank. Therefore, the contention of the applicants that the Demand Notice issued by the Officer is not the Authorized Officer does not hold good.

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The 1^st applicant having voluntarily given Annexure-B1, deed of declaration to the defendant bank declaring that the immovable property over which security interest is created is not agricultural in nature and usage and that he shall be precluded from taking any contrary view as to the nature and usage of the land at any time during the tenure of the loan is estopped from raising the contention now that the secured asset is agricultural property by producing

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Page 3 of 6

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SA No.395 of 2023

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Annexure-A7 certificate issued by the Agricultural Officer. Further Annexure-A7 certificate does not reflect the actual nature of the property as on the date of creation of security interest over the same, as rightly contended by the defendant in his written statement. Therefore, no reliance can be placed upon Annexure-A7 to accept the contention of the applicants that the secured asset is agricultural property.

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The defendant has produced copies of statement of accounts pertaining to the loan accounts of the applicants as Annexure-B2 to B11. It is for the applicants to obtain the correct and true statement of accounts of the applicants 1 and 2 in respect of the credit facilities availed by approaching the defendant bank. Directing the defendant to furnish copies of account statement to the borrowers does not fall under the category of measure as envisaged in Section 13(4) of the SARFAESI Act, 2002. Hence this relief sought for by the applicants is not entertainable.

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In view of the foregoing reasons this Tribunal holds that issuance of Annexure-A1 Demand Notice, Annexure-A4 Possession Notice and Annexure-5 notice is in accordance with the provisions of the SARFAESI Act and the Rules made thereunder and that therefore this notices are not liable to be declared as void ab initio as prayed for by the applicants in the SA.

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In the result, S.A No.395 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 21^st day of February, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 4 of 6

SA No.395 of 2023

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

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Sl.	Date	Particulars
No.
1.	22.02.2023	True copy of the Demand Notice No. RO-EKM/0342/SAR/SH/1464/395/ 22-23 issued to the applicant under Section 13(2), SARFAESI Act, 2002.	Annexure-A1
2.	06.05.2023	True copy of the objection filed by the applicant.	Annexure-A2
3.	09.05.2023	True copy of the reply No.CRD:EKM: SAR:002:23-24 issued by the defendant bankto theapplicant.	Annexure-A3
4.	11.05.2023	True copy of the possession notice issued to the applicant under Section 13(4), SARFAESI Act, 2002.	Annexure-A4
5.	15.06.2023	True copy of the notice No.CRD:EKM: MEME:004:23-24 issued to the applicant under section 13(8), SARFAESI Act, 2002.	Annexure-A5
6.	27.05.2019	True copy of the Circular No.146/2019/ Rev. in File No.Rev-H3/134/2019-Rev issued by the department of Revenue, Govt of Kerala along with translation copy.	Annexure-A6
7.	18.04.2023	True copy of the testimony of the Agricultural Officer, Valakom along with translationcopy.	Annexure-A7

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SA No.395 of 2023

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List of documents filed by the Defendant along with the written

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statement

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Sl. No.	Date	Particulars
1.	25.03.2022	True copy of the Deed of declaration from mortgagor executed by the borrower in favourofthe bank.	Annexure-B1
2.	---	True copy of the statement of account of CCOL A/cNo.0342083000000001	Annexure-B2
3.	---	True copy of the statement of account of Term Loan A/cNo.0342652000000576	Annexure-B3
4.	---	True copy of the statement of account of Term Loan A/cNo. 0342652000000730	Annexure-B4
5.	---	True copy of the statement of account of WCTL-Restructured A/c No. 0342652000000866	Annexure-B5
6.	---	True copy of the statement of account of FITL-Restructured A/c No. 0342652000000867.	Annexure-B6
7.	---	True copy of the statement of account of Term Loan – restructured A/c No. 0342655000000224.	Annexure-B7
8.	---	True copy of the statement of account of Term Loan – restructured A/c No. 0342655000000225.	Annexure-B8
9.	---	True copy of the statement of account of ECLGSA/cNo.0342656000000262	Annexure-B9
10.	---	True copy of the statement of account of KCC Crop Finance A/c No.0342656000000032	Annexure-B10
11.	---	True copy of the statement of account of Agri Short Term (KCC Restructured) A/cNo.0342655000000233	Annexure-B11

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 6 of 6

Siju Varghese v. South Indian Bank

Case brief

What is this about?

What did the court decide?

Siju Varghese v. South Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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