Dismissed

Pratap Salunkhe and another v. Kallappanna Awade Ichalkaranji Janata Sahakari Bank Limited

DRT5 Feb 2024SA/45/2022

Case brief

AI extract

What is this about?

An applicant challenged possession notices and District Magistrate orders under the SARFAESI Act regarding default on term and cash credit loans. The Tribunal found the bank followed due process, issued valid notices, and lawfully took symbolic possession. The application was dismissed.

What did the court decide?

Securitization Application No. 45/2022 is dismissed with costs.

Pratap Salunkhe and another versus Kallappanna Awade… — Banking and Recovery | DRT (2024)

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Presented on: 21.02.2022 Registered on: 23.02.2022 Decided on: 05.02.2024 Duration: Y M D 01 11 12

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IN THE DEBTS RECOVERY TRIBUNAL AT PUNE (Before Shri Dilip G. Murumkar, Presiding Officer)

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SECURITISATION APPLICATION No.45/2022

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Mr. Pratap Brahmedo Salunkhe R/at: B-2/904, Akshar Elementa, Near Balaji Institute, Tathawade, Pune – 411 033.

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Mrs. Shilpa Pratap Salunkhe R/at: B-2/904, Akshar Elementa, Near Balaji Institute, Tathawade, Pune – 411 033.

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Versus

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… Applicants

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Authorised Officer Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd., Head Office at: Janata Bank Bhavan, Main Road, Ichalkaranji, TalHatkanangale, District – Kolhapur.

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Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd., Head Office at: Janata Bank Bhavan, Main Road, Ichalkaranji, TalHatkanangale, District – Kolhapur.

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Mr. Sudhir Balkrishna Golagande R/at : 20, Asirwad, Sahakar Nagar,

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Ichalkaranji, Tal-Hatkanangale, District - Kolhapur

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Mr. Sandeep Appasaheb Tare, R/at : 21/484/10, Shirgute Building, Ichalkaranji, Tal-Hatkalangale, District-Kolhapur.

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... Defendants

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APPEARANCES For the Applicant For Defendant Nos.1 & 2 Defendant Nos.3 & 4

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Mrs. Madhuri R. Vaidya - Advocate Mr. N.K. Khasbardar - Advocate Formal Parties

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JUDGMENT

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(Delivered on 05^th February, 2024)

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The Securitization Application is filed by the applicants challenging measures initiated by defendant Bank, under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short „‟the SARFAESI Act‟‟) in respect of immovable properties. i.e. (1) All that piece and parcel of freehold non-agricultural plot of land bearing and known as C.S. No.16615, situated at and within municipal limits of Ichalkaranji, Tal: Hatkanangle, District Kolhapur admeasuring about 54.33 sq.mtrs and construction thereon and lands at C.S. No.16618 Ichalkaranji, Tal : Hatkanangale, District: Kolhapur, admeasuring 26 sq.mts together with construction thereon and (2) Residential Flat

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No.A-2, in the building known as Parijat Co-operative Housing Society Limited, Ichalkaranji, situated at R.S. 630, Hissa No.A/5 within limits of Ichalkaranji, Tal: Hatkanangale, District: Kolhapur admeasuring about 704.12 sq.ft together with common vacant land (for short “ suit properties”).

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The averments made in the application can be summarized as under:

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The applicant No.1 and applicant No.2 as co-applicant had availed credit facilities i.e. Term Loan of Rs.75,00,000/and Cash Credit of Rs.40,00,000/- from defendant No.2 bank. The said loan was granted against the security of suit properties of applicants. Defendant Nos. 3 and 4 are the guarantors to the said loan and have been impleaded as formal party to the present proceeding.

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It is contended that the applicants defaulted the said loan and therefore, on 5^th September, 2011 Demand Notice u/s 13(2) of the SARFAESI was issued to them by defendant bank. Thereafter, the applicants deposited the amounts with defendant No.2 bank and the account was made standard. However, on 15^th February, 2019 on the basis of 13(2) Notice dated 5^th September, 2011 the defendant bank pasted the Possession Notice on the office premises of the applicants and

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also took the keys of the said office.

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The defendant bank also pasted the Notice in respect of Cash Credit Loan of Rs.40 lakhs. However 13(2) Notice was not issued for the said Loan. The defendant bank also pasted the Notice on the house property of the applicants.

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It is the case of the applicants that they deposited substantial amounts in the Cash Credit Account. However, due to Covid19 pandemic they could not make the payments. On 10^th February, 2022 the defendant No.1 handed over the Notice dated 9^th February, 2022 issued by Mandal Adhikari, Ichalkaranji for taking the possession on 28^th February, 2022 on the basis of District Magistrate Order dated 28^th January, 2022.

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It is contended that thereafter, the applicants filed application with District Magistrate under the Right to Information Act for seeking the compilation of the entire proceedings. On perusal of the same, the applicants came to know that two separate proceedings, one in respect of Term Loan bearing No.345/2019 and another bearing No.347/2019 in respect of Cash Credit have been filed by the defendant before the District Magistrate.

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There is no description of the mortgaged securities and reference of Cash Credit loan in Demand Notice dated 5^th

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September, 2011 issued in respect of the Term Loan.

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It is further contended that in the Application submitted to the District Magistrate it shows that one of the mortgaged properties has been released. The applicants have deposited Rs.69,06,379/- after Demand Notice whereas the said Notice is only of Rs.81,81,037/-. However, in the Affidavit it is mentioned that Rs.1,57,32,675/- as on 31^st October, 2019 is due and payable. Hence, that defendant bank ought to have issued fresh 13(2) Notice instead of relying on 13(2) Notice dated 5^th September, 2011.

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It is contended that in the proceeding before District Magistrate in respect of Cash Credit Account it is mentioned that Demand Notice was being issued on 14^th October, 2011. However, the same has not been filed on record and no such Notice is received by the applicants. Hence, the action in itself is bad in law for want of proper procedure and service of Demand Notice. In the Affidavit it is referred that applicants have paid Rs.79,10,115/- and balance is only Rs.10,92,897/-as on 31^st October, 2019 in Cash Credit account, due and payable .

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However, in view of the order passed by District Magistrate and Possession Notice for taking possession on 28^th February, 2022, the applicants have filed the present application. The

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applicants have deposited substantial amount, therefore, there was no reason to take any action on the basis of 13(2) Notice dated 5^th September, 2011. The defendant has released one property as mentioned in the Application, thus there was no cause of action. The defendant bank have failed to follow the due procedure as contemplated under Rule 8 of the Security Interest Rule. The act of defendant bank is bad in law and contrary to the SARFAES Act and Rules and defendant have not made the application before the District Magistrate with clean hand.

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Based on the aforesaid facts, the applicants seek relief that the Notice issued under Section 13(2) dated 5^th September, 2011 and 14^th October, 2011 be set aside; and the defendant be restrained from taking possession of the properties on the basis of the Order of the District Magistrate dated 28/01/2022 and as per Notice of the Mandal Adhikari dated 09/02/2022 on 28/02/2022 or on any day thereafter.

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Defendant Nos.1 and 2 by filing Statement of Objection (Exhibit-7) opposed the application. It is stated that the Securitisation Application moved by applicants is not legal, valid and proper. In the entire application, the applicants have not pointed out a single breach of provisions of Securitisation

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Act. The applicants have not come with clean hands before the Hon‟ble Tribunal and have concealed various material and relevant documents. It is stated that two separate Notices u/s 13(2) were issued to the applicants. For Term Loan dated 5^th September, 2011 and for Cash Credit dated 14^th October, 2011. Both the Notices were served upon the applicant by way of Registered Post. The defendant bank has denied the allegations taken by the applicants in the Application. It is stated that on 15^th February, 2019 the defendant bank has taken symbolic possession of the office premises but till date physical possession is not taken. Therefore, the defendant bank issued Notice u/s 13(4) to the applicants for taking possession. However, every time the applicants gave false assurance to repay the outstanding amount because of which the defendant bank did not proceed further in the matter. It is denied that the account of the applicants was standard and performing. It is stated that the defendant bank had taken symbolic possession of the suit properties on 1^st March, 2019 and has published the Possession Notices in the newspapers. Further, the applicants have not challenged the said action and therefore, the applicant now cannot challenge the Notice u/s 13(2) of the SARFAESI Act. The Notices u/s 13(2) are legal, valid and

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properly served upon the applicants.

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It is further stated that applicants have deposited meager amount after issuance of 13(2) which is not sufficient to regularize the loan accounts. The loan accounts are still NPA. It is stated that even after giving sufficient time and opportunities to the applicants, the applicants have failed to avail the said opportunities. Therefore, applicants are not entitled to claim any reliefs. The application filed before the District Magistrate is legal and valid. It is stated that huge amounts are due from the applicants. There is no merit in the entire contentions of the Securitisation Application. Hence, the application be dismissed with costs.

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The applicants have filed Rejoinder (Exhibit-8) to the Statement of Objections filed by defendant Nos.1 and 2 in rebuttal.

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The following points arise for my determination and I record my findings as under:

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(1) Whether the applicant is entitled for reliefs as claimed?

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(2) What order?

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Findings:

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Point No.1 – In the negative.

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Point No.2 – As per final order.

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REASONS

The learned Advocate appearing for the applicants has produced the following documents along with List (Exhibit-4)

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and (Exhibit-9) in support of her case:

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Sr.No.	Particulars	Date
1.	Notice of Mandal Adhikari for taking possession on 28/02/2022 along with translation	09/02/2022
2.	Order of D.M. passed in Application No.SR/345 and 347/2019 along with translation	28/01/2022
3.	Copy of Application No.345/19 filed u/s. 14 before the D.M. along with Affidait of Satpute SanjayAnandrao	14/11/2019
4.	Demand Notice issued u/s 13(2)in respect of Term Loan	05/09/2011
5.	Notice u/s 13(4) in respect of Term Loan	15/02/2019
6.	Possession Notice pasted on officeproperty	01/03/2019
7.	Copy of Possession Notice published in Business Standard dated 01/03/2019	07/03/2019
8.	Copy of Application	14/11/2019

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	No.347/19 filed u/s 14 before the D.M. along with affidavit of Satpute SanjayAnandrao
9.	Possession Notice in respect of 13(2)Notice dt. 05/09/211	01/03/2019
10.	Possession Notice in respect of 13(2)Notice dt. 14/10/2011	01/03/2019
11.	Two sets of photographs showing the seals to the lock of the property, imposed by Bank.
12.	Letter and notice issued to Bank alongwith documents	28/02/2022

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The learned Advocate for defendant bank has produced following documents along with List (Exhibit-7A):

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Copies of 13(2) Notices [Collect.]

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Copies of communications by the applicants [Collect.]

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Copies of Statement of Accounts of the loan facilities of the Applicants [Collect.]

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Copies of 13(4) notices [Collect.]

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Heard the learned Advocates appearing for the applicants and defendant bank.

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As to Point No.1:

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Admittedly, there were two loans – one is Term Loan of Rs.75,00,000/and another loan is Cash Credit of

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Rs.40,00,000/- and mortgaged the suit properties i.e. office, plots and flat. Since the applicants failed to repay loan of both loan accounts, the defendant Bank issued demand notices, one dated 05.09.2011 and second 14.10.2011.

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At the first, I deal with the measures taken by the defendant Bank in respect of Term Loan.

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According to the applicants, though demand notice for Term Loan was issued, objection is that details of securities, rate of interest, date of NPA etc. were not given therein, and therefore, this Notice is bad in Law. Copy of demand notice dated 05.09.2011 in respect of Term Loan has been produced on record by both the parties. On cursory perusal of the same, it reveals that the defendant Bank has given details of outstanding amount, rate of interest, other charges and details of secured assets. Therefore, this objection of the applicants is devoid of substance and not sustainable.

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Another objection of the applicants in respect of Term Loan is that the defendant Bank issued pre-possession notice dated 15.02.2019 stating that on 01.03.2019 the defendant Bank will enter into suit office and take possession of the same. Accordingly, on 01.03.2019 Officers of the defendant Bank forcefully took physical possession of the suit property by

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dislodging staff members of the applicants present therein. Thereafter, the defendant Bank to conceal this illegal act, made application under Section 14 of the SARFAESI Act to the District Magistrate in respect of said Term Loan and obtained order and again issued possession notice through Revenue Officer. These acts are illegal one.

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In order to substantiate this objection, the applicants have produced affidavits of two staff members along with list Exh.14. On perusal of affidavits of Surendra Dhanlobhe and Amit Kalange, allegedly staff members of the applicants, it appears that on 01.03.2019 they were present in the suit office and Officers of the defendant Bank forcefully dislodged them and other staff members from the suit office and locked and sealed the same and pasted possession notice thereon. However, the applicants have not produced iota of evidence to show that these two persons are their staff members and present at the spot on the relevant date i.e. 01.03.2019.

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More so, if the Officers of defendant Bank would have taken physical possession of the suit office forcefully, the applicants would have immediately taken action against them either by filing police complaint or complaint to Criminal Court or issuing notice to the defendant Bank. However, remaining

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silent till possession notice issued by the Revenue Officer is received, glaringly creates doubt as to whether the defendant Bank has forcefully taken possession of the suit office of the applicants on 01.03.2019.

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This opinion is strengthened by another fact. The applicants have claimed relief in this Securitization Application that the defendant Bank may be restrained from taking possession of the suit properties on the basis of order of District Magistrate and possession notice issued by Mandal Adhikari dated 09.02.2022, means they are claiming possession over suit properties. Thus, the applicants are blowing hot and cold at one and same time.

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Per contra, the defendant Bank has produced possession notice and panchanama dated 01.03.2019 and 02.03.2019 which glaringly shows that on those dates, the defendant Bank has taken only symbolic possession of the suit properties. So also, symbolic possession notice was also duly published in the newspapers. Therefore, since the defendant Bank has taken symbolic possession of the suit properties by following due process of law, I do not find illegality therein. Consequently, objections raised by the applicants in respect of taking possession of the suit properties on relevant dates are devoid

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of merits.

Now, I deal with the measures taken by the defendant Bank in respect of Cash Credit facility. According to the applicants, the defendant Bank has not issued demand notice in respect of Cash Credit facility. However, it took symbolic possession of the suit flat and this act of the defendant Bank is illegal. However, the defendant Bank has produced copy of demand notice dated 14.01.2011 issued to the applicants and guarantors to the loan accounts and produced acknowledgement receipts which bear signatures of the concerned parties. Therefore, objection of the applicants that they had not served with demand notice in respect of Cash Credit facility is futile.

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The possession notice and panchanama and its publication glaringly shows that the defendant Bank has taken symbolic possession of the suit flat and other properties which were mortgaged to the loan accounts.

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It is contention of the applicants that after service of demand notice in respect of Term Loan, they have paid substantial amount, and therefore, loan accounts have become standard and removed from classification of NPA, whereas according to the defendant Bank, very few amount is deposited by the applicants after demand notice, and therefore, loan accounts

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remained classified as NPA. That apart, correspondence made by the applicants with the defendant Bank clinchingly shows that huge amount was to be paid by the applicants and cheques issued by them were dishonoured on some point of time.

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Therefore, I safely hold that the defendant Bank has lawfully taken measures under the provisions of SARFAESI Act and no illegality committed by it. Therefore, the applicants are not entitled for the reliefs as claimed in this application. Therefore, I answer this point in the negative.

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As to Point No.2 :

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From the evidence on record and facts of the case, I hold that the applicants have failed to prove their case, and therefore, not entitled for the reliefs as claimed. Therefore, the application is liable for dismissal. Hence, by answering this point accordingly, I pass the following order.

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Hence , I pass the following order:

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ORDER

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