Dismissed

Firoze T v. Urban Co. operative Bnak Ltd.

DRT4 Oct 2024SA/448/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicants' Securitization Application seeking to set aside a demand notice and direct loan restructuring. The court held that no statutory requirement exists to file an application under Section 14(1) of the SARFAESI Act before issuing a Section 13(4) demand notice, and restructuring is not a measure under Section 13(4).

What did the court decide?

The Securitization Application stands dismissed; no costs.

Firoze T 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 4^th DAY OF OCTOBER, 2024

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

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S.A No. 448 of 2023

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Between

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Firoz T., S/o.Abubacker, Tharamel House, P.O. Cherplasseri, Ottapalam Taluk, Palakkad – 679 503.

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Ramla Beegum, W/o. Firoze T., Tharamel House, P.O. Cherplasseri, Ottapalam Taluk, Palakkad – 679 503. --- Applicants

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And

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The Authorized Officer/ General Manager, Cherplacheri Co-operative Urban Bank, Head Office, Main Road P.O, Cherplasseri, Ottapalam Taluk, Palakkad – 679 503.

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Cherplacheri Co-operative Urban Bank, represented by its General Manager, Head Office, Main Road P.O, Cherplasseri, Ottapalam Taluk, Palakkad – 679 503. --- Defendants

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SA No.448 of 2023

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This Securitization Application coming on 05.09.2024 for final hearing before me in the presence of Mr. P. Jayaram, Advocate for the Applicants and Mr. C. Sivadas, 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 23.08.2023 seeking to set aside Annexure-A1 and A2 notices and to direct the 2^nd defendant bank to regularize, restructure and re-schedule the applicants’ loan by allowing to re-pay the defaulted loan amount in 20 monthly instalments and to repay the entire loan amount within the original contractual period extending upto 2023 and to direct the 2^nd defendant bank to move against only part of the secured asset to realise the debt.

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The availment of housing loan to a tune of Rs.24,20,000/- is admitted by the applicants in the SA. But they have not averred as to whether the SA subject matter of the immovable property has been collaterally secured by way of equitable mortgage in favour of the 2^nd defendant bank for the aforesaid availment of housing loan. However, it is revealed from the perusal of the averment of the written statement filed by the defendants that the applicants have created equitable mortgage by deposit of title deeds over their immovable property situated in Sy. No.44/3, Re-Sy. No.44/2-1 of Cherplasseri Village, Ottapalam Taluk, Palakkad.

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The default in repayment of the outstanding loan due is admitted by the applicants. Hence the loan account of the applicants came to be classified as Non-performing Asset on 13.08.2022 and demand notice dated 14.11.2022 Annexure-A2 was issued 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 demand notice. It appears that the applicants neither sent any objection/representation to the demand notice nor did they clear off their liability due to the defendant bank. The applicants have averred that they sent objection on 03.12.2022, Annexure-A3 to the 2^nd defendant bank for the Demand Notice, Annexure-A2. The above averment of the applicants is stoutly refuted by the defendants in their written statement. According to them, no such reply/objection was sent to them. The applicants have not produced any proof to show that Annexure-A3 reply/objection was sent to the 2^nd defendant bank and that it was received by the 2^nd defendant bank. Therefore, it is evident that the above averment of the applicants cannot be accepted as true and correct.

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Page 2 of 5

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SA No.448 of 2023

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Since the applicants failed to respond to the terms of the Demand Notice, the defendants approached the Chief Judicial Magistrate Court, Palakkad and filed application under Section 14 of the SARFAESI Act, 2002. Order came to be passed in MC No.436/2023 appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued notice dated 14.08.2023 to the applicants informing them that he would visit the secured asset on 14.08.2023. The applicants having aggrieved against the above measures have filed this S.A seeking for the reliefs stated supra.

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There is not statutory requirement for the defendants to file application under Section 14 (1) of the SARFAESI Act, 2002 before the Chief Judicial Magistrate Court or District Magistrate, only after having issued possession notice under Section 13 (4) of the SARFAESI Act, 2002. Hence the contention of the applicants that without issuing notice under Section 13 (4) of the SARFAESI Act, 2002 approaching the Chief Judicial Magistrate Court Palakkad for taking physical possession of the secured asset is illegal does not hold good.

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The applicants have not produced the copy of the petition and affidavit filed in MC No.436/2023 filed by the defendants before the Chief Judicial Magistrate Court, Palakkad and also the copy of the order passed in MC No.436/2023. It is also not the contention of the applicant 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 MC No.436/2023. It is also not the contention of the applicant that the Chief Judicial Magistrate Court, Palakkad 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 Annexure-A1 notice is unsustainable since this notice is not the measures contemplated under Section 14 (1) of the SARFAESI Act, 2002.

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One of the reliefs sought for by the applicants in the SA is to direct the 2^nd defendant bank to regularize, restructure and reschedule the loan account of the applicants and to permit them to repay the loan amount in 20 monthly installments. The above said relief is not a measure contemplated under Section 13 (4) of the SARFAESI Act, 2002. It is for the applicants to approach the 2^nd defendant bank and work out the remedy. Hence the above relief sought for by the applicants in this SA is untenable.

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Page 3 of 5

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SA No.448 of 2023

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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.

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In the result, S.A No.448 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 4^th day of October, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 4 of 5

SA No.448 of 2023

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

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Sl. No.	Date	Particulars
1.	14.08.2023	True copy of the notice issued to the applicants by the Advocate Commissioner.	Annexure-A1
2.	---	True copy of the notice issued to the applicants by the Authorized Officer of the defendant bank.	Annexure-A2
3.	03.12.2022	True copy of the reply to Annexure-A2 notice.	Annexure-A3

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 5 of 5

Firoze T v. Urban Co. operative Bnak Ltd.

Case brief

What is this about?

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Firoze T v. Urban Co. operative Bnak Ltd.

Case brief

What is this about?

What did the court decide?

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