Dismissed

T T Xavier v. State Bank of India

DRT19 Sept 2024SA/467/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the securitization application filed by applicants to set aside possession notices and challenge the validity of debt recovery proceedings against a State Bank of India branch.

What did the court decide?

The Securitization Application SA No. 467 of 2023 was dismissed; no costs awarded.

What the court decided

T T Xavier versus State Bank of India — Banking and Recovery | DRT (2024)

¶1

Fair Order

¶2

IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

¶3

DATED THIS 19^th DAY OF SEPTEMBER, 2024

¶4

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

¶5

S.A No. 467 of 2023

¶6

Between

¶7

T.T. Xavier, S/o. Thomas,

¶8

Thuruthipurath House,

¶9

Kadathukadavu Road,

¶10

Muttinakam, Varapuzha,

¶11

Ernakulam – 683 517.

¶12

Shinta Tenson, W/o.late Tenson, Thuruthipurath House,

¶13

Kadathukadavu Road,

¶14

Muttinakam, Varapuzha,

¶15

Ernakulam – 683 517.

¶16

Master Aswin Joseph, S/o. late Tenson, Represented by 2^nd applicant,

¶17

the mother and natural guardian.

¶18

Master Ashwal Xavier, S/o. late Tenson, Represented by 2^nd applicant,

¶19

the mother and natural guardian.

¶20

--- Applicants

¶21

And

¶22

State Bank of India, Stressed Assets Recovery Branch, 7^th Floor, Vankarath Towers, N.H. By-Pass, Palarivattom, Ernakulam -682 024, Represented by its

¶23

Authorised Officer & Chief Manager.

¶24

SA No.467 of 2023

¶25

State Bank of India, RASMEC Aluva (15424), Second Floor, Aluva Metro Station Building, PD Level 1 (LHS), Aluva P.O., Ernakulam – 683 101, Represented by its

¶26

Authorised Officer.

¶27

State Bank of India, Varapuzha Branch, Represented by its Authorised Officer.

¶28

--- Defendants

¶29

This Securitization Application coming on 26.07.2024 for final hearing before me in the presence of Mr. N. Satheesh, Advocate for the Applicants and Mr.Rajesh Rajagopala Pillai, 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:

¶30

O R D E R

¶31

This Securitisation Application was filed on 04.09.2023 seeking to set aside Annexure-I, AII and AII notices issued for taking possession of the property having an extent of 6.52 Ares in Sy. No.276/6/1/2 in Varapuzha village, Paravur Taluk, Ernakulam District with a residential building and to declare that the measures taken by the defendants in furtherance to Annexure-AI to AIII notices to take possession of the secured asset are invalid.

¶32

The counsel appearing for the applicants submitted that the 2^nd applicant’s husband Tenson T. Xavier approached the 3^rd defendant bank for getting loan and that at the instance of the 3^rd defendant bank, he executed power of attorney in favour of the 2^nd applicant authorizing her to execute loan documents on his behalf since he had been abroad and that the 2^nd applicant signed the loan sanction letter and the agreement of loan believing that the loan being availed was a home loan and that an amount of Rs.30,00,000/- was granted upon creation of security interest over the 1^st applicant’s immovable property having an extent of 6.52 Ares in Sy. No.276/6/1/2 in Varapuzha village, Paravur Taluk, Ernakulam District with a residential building and that 1^st applicant was not aware of the above mentioned transaction and that after receipt of the Demand Notice dated 22.02.2022 Annexure-AI, the 2^nd applicant who was under the

¶33

Page 2 of 6

¶34

SA No.467 of 2023

¶35

impression that the loan secured by her husband was home loan which covered the insurance liabilities sent representation dated 28.04.2022 to the 2^nd defendant and that the 2^nd defendant sent reply dated 30.04.2022 stating that no insurance coverage was available for the loan amount and that the 1^st defendant filed O.A. No.658/2022 before this Tribunal and thereafter possession notice, Annexure-AII dated 19.09.2022 was issued without complying with Rule 8(2) and 8(2A) of the SARFAESI Act, 2002 and that subsequently on application filed under Section 14(1) of the SARFAESI Act 2002, Order in MC No.1068/2022 was passed by the Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam appointing Advocate Commissioner to take physical possession of the secured asset and that the Advocate Commissioner sent notice dated 14.08.2023, Annexure-AIII informing that he would take physical possession of the secured asset after 14 days from the date of receipt of the notice, and that the affidavit filed in MC No.1068/2022 is not in compliance with the provisions of the 1^st proviso to Section 14 (1) of the SARFAESI Act, 2002 and that the 1^st applicant has not executed or signed any letter for deposit of title deed No.841/1991 in favour of the 3^rd defendant bank and that the 1^st applicant had created Jehan over his property in favour of Varappuzha Service Co-operative Bank and that after closure of the loan account, the title deeds were received by Tenson T. Xavier, who is the son of the 1^st applicant and that the title deeds were deposited with the 3^rd defendant bank without the knowledge of the 1^st applicant and that the 2^nd applicant was under the impression that the insurance policy would cover the loan in case any adverse incident happened and that the 3^rd and 4^th applicants, who are minors, have not inherited any property from their father and that since applicants are not liable to repay the amount as mentioned in Annexure-A-I and A-II notices, all proceedings for taking physical possession of the secured asset are liable to be set aside.

¶36

Per contra, the counsel appearing for the defendants submitted that at the request of the 1^st applicant and his son Tenson T. Xavier, the 3^rd defendant sanctioned a personal loan for an amount of Rs.30,00,000/- as per sanction letter dated 29.06.2019, Annexure-D6 upon creation of equitable mortgage over the property having an extent of 6.52 Ares in Sy. No.276/6/1/2 in Varapuzha village, Paravur Taluk, Ernakulam District with a residential building in favour of the 3^rd defendant bank and that the 2^nd applicant signed the loan documents along with the 1^st applicant pursuant to execution of power of attorney in her favour by Tenson T. Xavier before the Consular General of India, Seychelles and that the 1^st applicant executed arrangement letter, loan agreement and letter for memorandum of deposit of title deed and that he is the joint borrower of the loan along with his son and that therefore, the contention of the applicants that 1^st applicant was not aware of the loan sanction is false and that since the loan availed by the applicants is not a housing

¶37

Page 3 of 6

¶38

SA No.467 of 2023

¶39

loan, there is no life coverage of the borrowers as per the conditions of the insurance policy and that since the applicants committed default in repayment of outstanding loan due, the loan account was classified as NPA on 27.01.2022 and that possession notice was issued in compliance with Rule 8 (1) (2) of Security Interest (Enforcement) Rules, 2002 and that the statutory requirements contemplated under clause 14(1) of the SARFAESI Act, 2002 in respect of filing of the affidavit was complied with and that therefore the SA is liable to be dismissed with costs to these defendants.

¶40

A perusal of Annexure-D6 copy of arrangement letter dated 29.06.2019, Annexure-D7 copy of loan agreement dated 29.06.2019 and Annexure-D8 copy of confirmation letter dated 29.06.2019 shows that both the 1^st applicant and the 2^nd applicant have put their signatures accepting the terms and conditions of the loan agreement and also confirming the creation of equitable mortgage over the immovable property belonging to the 1^st applicant by deposit of title deeds. It is also revealed from Annexure-D6 that the loan amount of Rs.30,00,000/- sanctioned is the term loan and not housing loan. There is also no reference in Annexure-D6 and D7 that the loan availed by the applicants had been covered under any insurance policy. Further, for the representation dated 28.04.2022 sent by the 2^nd applicant, the 2^nd defendant sent reply letter dated 30.04.2022 informing her that no insurance protection was available for the loan amount since it was not a housing loan. Therefore, it is established that the averment of the applicants that 1^st applicant was not aware of the loan transactions and that he did not execute any loan agreements and that the 2^nd applicant was under the impression that the loan availed had the protection of insurance coverage policy are not only incorrect but are false. In Annexure-D8, which is the confirmation letter, the 1^st applicant has put his signature in token of deposit of title deeds pertaining to his immovable property which is the secured asset in favour of the 3^rd defendant bank. It is clearly mentioned in Annexure-D8 that the documents produced by him are partition deed and rectification deed. Therefore, the contention of the applicants that the 1^st applicant did not create mortgage over the secured asset is also absolutely false.

¶41

A perusal of Annexure-A1 Demand Notice shows that since the applicants committed default in repayment of the outstanding loan due, the loan account came to be classified as NPA on 27.01.2022. The defendants have produced Annexure-D2 copy of acknowledgment card in order to show that Demand Notice was served on the applicants. Indisputably, the applicants neither sent any objection/ representation to the Demand Notice nor did they clear off their liability due to the 3^rd defendant bank.

¶42

Page 4 of 6

¶43

SA No.467 of 2023

¶44

Annexure-A2 possession notice was issued for symbolically taking physical possession of the secured asset on 19.09.2022. The defendants have produced Annexure-D4 and D5 in order to prove their contention that possession notice was published in two leading newspapers, The Indian Express (English) edition dated 29.09.2022 and Kerala Kaumudi (Malayalam) edition dated 29.09.2022. Annexure-D10 which are copies of postal receipts evidences the service of possession notice on the applicants. The defendants have also produced Annexure-D9 copy of photographs in order to show that possession notice was affixed on the conspicuous part of the secured asset. Therefore, this Tribunal does not find any substance in the contention of the applicants that the defendants failed to comply with Rule 8(1) and (2) of Security Interest (Enforcement) Rules 2002.

¶45

The applicants have not produced the copy of the petition and affidavit filed in MC No.1068/2022 filed by the defendants before the Additional Chief Judicial Magistrate Court (MPs/MLAs) Ernakulam, and also the copy of the order passed in MC No.1068/2022. Hence this Tribunal is not in a position to consider 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 MC No.1068/2022. However, the defendants have contended in their written statement that the statutory requirements contemplated under Section 14 (1) of the SARFAESI Act, 2002 was complied with in respect of filing of affidavit in MC No.1068/2022. It is also not the contention of the applicant that the learned Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam, 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 order passed by the learned Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam in MC No.1068/2022, challenging Annexure-AIII issued by the Advocate Commissioner is unsustainable.

¶46

In view of the foregoing reasons, this Tribunal holds that the applicants are not entitled to get the reliefs sought for in this SA. In the result, S.A No. 467 of 2023 stands dismissed. No costs.

¶47

Dictated to Steno, taken down, transcribed, typed by him, corrected and

¶48

pronounced by me in the open court on this the 19^th day of September, 2024.

¶49

(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 5 of 6

SA No.467 of 2023

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

¶54

Sl. No.	Date	Particulars
1.	22.02.2022	True copy of the notice issued by the 2^nddefendant u/s 13(2) of SARFAESI Act.	Annexure-A1
2.	19.09.2022	True copy of the possession notice issued by the 1^stdefendant u/s 8(1) of the Security Interest (Enforcement) Rules, 2002.	Annexure-AII
3.	14.08.2023	True copy of the letter by the Advocate Commissioner.	Annexure-AIII

¶55

List of documents filed by the 1^st Defendant along with the written statement

¶56

Sl.	Date	Particulars
No.
1.	22.02.2022	True copy of the 13(2) notice.	Annexure-D1
2.	---	True copy of the acknowledgement card evidencing thereceipt of 13(2)notice	Annexure-D2
3.	---	True copy of the acknowledgement card evidencing the receipt of possession notice.	Annexure-D3
4.	29.09.2022	True copy of the publication of possession notice in The Indian Express (English) daily.	Annexure-D4
5.	29.09.2022	True copy of the publication of possession notice in Kerala Kaumudi (Malayalam) daily.	Annexure-D5
6.	29.06.2019	True copy of the arrangement letter.	Annexure-D6
7.	29.06.2019	True copy of the loan agreement	Annexure-D7
8.	29.06.2019	True copy of the confirmation letter for creationofequitablemortgage.	Annexure-D8
9.	27.09.2022	True copy of the affixture report along withthe photographs.	Annexure-D9
10.	28.09.2022	True copy of the postal receipts (4 Nos) evidencing the issuance of possession notice.	Annexure-D10

¶57

(Su. WILLYAHM) PRESIDING OFFICER

¶58

Mj/

¶59

Page 6 of 6

T T Xavier v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

T T Xavier v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Farhana K C versus Canara Bank

Bank of Baroda (E-Vijaya Bank) versus Sh.Sukhavinder Singh

Union Bank of India (E-Andhra Bank) versus M/S Jmb Steel

Punjab National Bank versus Paramdeep Singh

Bank of Baroda versus Nitu Devi

Union Bank of India versus Ms Sunita Enterprises