Dismissed

David Geevarghese v. State Bank of India

DRT16 Oct 2024SA/487/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an applicant's securitization application challenging the initiation of securitization measures and physical possession of a secured asset by the secured creditor. The court held that the applicant failed to prove procedural illegality as the creditor had complied with statutory requirements.

What did the court decide?

Application dismissed with costs of Rs. 10,000 payable by the applicant. All pending IAs closed.

David Geevarghese versus State Bank of India — Banking and Recovery | DRT (2024)

¶1

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

¶2

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

¶3

Dated this the 16^th day of October, 2024

¶4

SECURITISATION APPLICATION No.487/2024

¶5

Between

¶6

David Geevarghese, aged 55, S/o. D.Thankachan, 4B, Block II, Olive Cressida, Attippara Village, Kazhakoottam, Thiruvananthapuram Taluk, Thiruvananthapuram District, Pin-695581. …Applicant

¶7

And

¶8

1 State Bank of India, NRI Branch, LMS Compound, Palayam, Thiruvananthapuram-695034, represented by its Branch Manager.

¶9

2 The Authorized Officer, State Bank of India, RACPC-I, LMS Compound, Palayam, Thiruvananthapuram-695034. …Defendants

¶10

This Securitization Application having been heard on

¶11

09.10.2024 in the presence of Advocate V.N.Sankarjee for the applicant and Advocate Tom K Thomas for the defendants and stood over to this day for consideration, the Tribunal delivered the following:

¶12

F I N A L O R D E R

¶13

This SA is filed by the applicant under S.17(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’) challenging the securitization measures initiated by the defendants including the Advocate Commissioner’s notice to

¶14

SA/487/2024

¶15

¶16

take physical possession of the secured asset with a prayer to set aside the same.

¶17

Brief facts of the case :

¶18

In the SA the applicant has averred that he availed housing loan of Rs.30,00,000/- from the 1^st defendant in the year 2014 for purchasing a flat bearing No.4B, Block II, Olive Cressida, Attippara Village, Kazhakoottam, Thiruvananthapuram District more fully described in the schedule to the SA for a total sale consideration of Rs.65,00,000/- in addition to stamp duty, registration fee and documentation expenditure. The said flat was given as collateral security for the loan. The repayment period was fifteen years at EMI of Rs.33,000/- per month. The applicant was regular in repaying the loan up to 2020, but due to covid -19 pandemic he lost his job and returned to India in the year 2024. The Advocate Commissioner appointed by the Chief Judicial Magistrate Court, Thiruvananthapuram in MC.No.493/2024 issued a notice on 04.07.2024 to take physical possession of the secured asset which was received by the applicant on 06.07.2024. It is further claimed by the applicant that he has not received any demand notice and possession notice as per provision under the SARFAESI Act. He came to know about the securitization measure after getting notice from the Advocate Commissioner marked Annexure A1. All the statutory requirements are not duly complied by the defendant and hence the securitization proceeding is vitiated.

¶19

Per contra , learned counsel for the defendants denied the allegations made in the SA by filing written statement and claimed inter alia that all the statutory measures are duly followed.

¶20

SA/487/2024

¶21

¶22

The demand notice under Section 13(2) of the SARFAESI Act was personally served on the applicants. The possession notice was also affixed at the conspicuous part of the residential house. So also the possession notice was published in two widely circulated newspapers. All the documents are filed in this case along with the written statement and marked as Annexure B1 to B7. It is claimed that since there is no procedural illegality, the SA may be dismissed.

¶23

It is not out of place to mention here that the applicant has filed one IA.No.3333/2024 alleging that during the pendency of the SA before consideration of stay application, the defendants have taken physical possession of the secured asset on 23.07.2024 illegally with the help of Advocate Commissioner. The defendants also produced Mahazer submitted by the Advocate Commissioner regarding execution of the order passed by the Ld. Chief Judicial Magistrate on 23.07.2024. Hence the IA is filed for restoration of possession. Counter to the same is also filed by the defendants by denying the allegation.

¶24

In view of the statutory provision contained in Section 17(3) of the SARFAESI Act if the Tribunal concludes that the measures taken under Section 13(4) of the SARFAESI Act by secured creditor are not in accordance with the provisions of the SARFAESI Act and Rules made thereunder, the Tribunal has power to restore the possession of the secured asset. Before exercising such power it is required on part of the applicant to produce evidence that the measure taken by the secured creditor under the SARFAESI Act is not in accordance with the provisions and Rules made thereunder. In such premises, this Tribunal considers to hear the SA instead of the

¶25

SA/487/2024

¶26

¶27

IA filed by the applicant for restoration of possession to find out whether physical possession of the secured asset was taken by the defendants illegally by not following the statutory requirement. Even though, the applicant has sought for restoration of possession, no application is filed by him to amend the SA to challenge the measure taken by the defendants as illegal.

¶28

From the respective case of both the parties, the

¶29

following points are emerged for adjudication in this case:

¶30

(i) Whether the securitization measure initiated by the defendants suffers from any illegality or defect or irregularity to intervene with the same?

¶31

(ii) Whether the applicant is entitled to get any relief in this case?

¶32

FINDINGS:

¶33

Point Nos.(i) & (ii):

¶34

For the sake of convenience, both the points being interlinked with each other are taken up together for adjudication. During hearing, learned counsel for the applicant submitted that the demand notice as well as the possession notice was not served on the applicant and he has no knowledge about the same. After getting Annexure A1 notice he came to know about the securitization proceeding and filed the SA challenging the same. Taking advantage of the delay in considering the stay application the defendants have illegally taken physical possession of the subject matter property with the help of the advocate commissioner. However, the applicant is ready to deposit the entire loan amount and some leniency may be shown.

¶35

SA/487/2024

¶36

¶37

The learned counsel for the defendants submitted that as applicant has defaulted in repaying the loan, securitization proceeding was initiated against him as per provision contained in the SARFAESI Act and the rules made there under. The demand notice Annexure B2 was sent to the applicant by registered post which was duly served on him as apparent from the postal acknowledgment card filed in this case. So also, the defendants have also sent possession notice Annexure B3 to the applicant which was returned unserved. Consequently, symbolic possession of the secured asset was taken by following the procedural requirements. The possession notice was also published in two leading newspapers both in English and in vernacular language. Copy of such publication is filed in this case. Further, the possession notice was affixed at the outer door of the residential house which is apparent from Annexure B4. The Advocate Commissioner has taken physical possession of the secured asset by following statutory requirements. In such premises, the applicant is not entitled to get any relief in this proceeding. However, if the applicant would deposit the entire loan outstanding amount with cost and expenses within a reasonable period, the defendants will not take any further measure for realization of the outstanding dues.

¶38

On careful consideration of submissions from both sides, though the applicant challenged the non-service of demand notice, but the defendants produced postal acknowledgment card showing due service of the demand notice and compliance of other statutory requirements. The learned counsel for the applicant could not place any material showing any illegality committed by the defendants in the securitization measure or in taking physical possession of the

¶39

SA/487/2024

¶40

¶41

secured asset by the advocate commissioner. Ironically after taking physical possession of the secured asset by the secured creditor through legal process the applicant has not sought any amendment in the SA challenging such measure except filing restoration application imputing the system. Merely because the stay application of the applicant could not be considered in time the same is not a ground to hold the step taken by the defendant in taking physical possession of the secured asset as illegal and the contention raised by the applicant on this aspect has no leg to stand.

¶42

Section 17(3) in of the SARFAESI Act reads as follows:

¶43

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

¶44

“ (3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in subsection (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management or restoration of possession, of the secured assets to the borrower or other aggrieved person, it may, by order- (underline is mine) xxxxxxxxxxxxxxxxxxxxxx

¶45

xxxxxxxxxxxxxxxxxxxxxx”

¶46

In view of the above, it is necessary on the part of the applicant to prove that the securitization proceeding or taking of physical possession is illegal, which the applicant failed to establish in this case. In absence of such proof no direction can be given to the defendants for restoration of possession of the secured asset to the applicant. Hence both the points framed in this case are answered against the applicant and he is not entitled to get any relief in this case.

¶47

Considering the submission on both sides if the applicant would approach the defendants in writing within a reasonable period to deposit the outstanding loan amount; the

¶48

SA/487/2024

¶49

¶50

defendants shall consider the same since the applicant is evicted from his residential house in the securitization proceeding. In view forgoing reasons the applicant is not entitled to get any relief in this case. Both the points are answered against him.

¶51

Hence it is ordered:-

¶52

ORDER

¶53

With the above observation and the foregoing reasons, this SA, being devoid of any merit, is hereby dismissed with costs of Rs.10,000/- (Rupees ten thousand only), payable by the applicant to the defendants. In view of disposal of the SA, all the pending IAs are closed.

¶54

(Dictated to my steno, corrected and pronounced by me in the open Tribunal on this the 16^th day of October, 2024)

¶55

[SOVAN KUMAR DASH] PRESIDING OFFICER

¶56

SA 290/2019

¶57

¶58

Documents on the part of the applicant

¶59

Annexures Particulars of documents

¶60

Annexure-I	True copy of the notice dated 04.07.2024 issued by the Advocate Commissioner to the applicant with envelop and English translation.
Annexure-II	True print out of the (photo image) possession notice dated 21.11.2023 issued by the 2^nddefendant with its legible type written copy.

¶61

Documents on the part of the defendants

¶62

Annexure-B1	True copy of the postal acknowledgment card
	evidencing receipt of the notice by the applicant.
Annexure-B2	True copy of the notice under Section 13(2) of the SARFAESI Act issued by the applicant on 12.05.2023.
Annexure-B3	True copy of the notice under Section 13(4) of the SARFAESI Act issued to the applicant on 22.02.2024.
Annexure-B4	True copy showing the affixture of the notice on the secured asset on 22.02.2024.
Annexure-B5	True copy of the newspaper publication of possession notice in New India Express dated 24.02.2024.
Annexure-B6	True copy of the newspaper publication of possession notice in Kerala Kaumudi dated 24.02.2024.
Annexure-B7	True copy of the Mahazer dated 23.07.2024 prepared by the Advocate Commissioner together with English translation.

¶63

PRESIDING OFFICER

¶64

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

¶65

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

¶66

Dated this the 16^th day of October, 2024

¶67

SA.No.487/2024

¶68

Between

¶69

David Geevarghese …Applicant And State Bank of India, NRI Branch & another. …Defendant

¶70

F I N A L O R D E R

¶71

16.10.2024 SA.No.487/2024

¶72

With the above observation and the foregoing reasons, this SA, being devoid of any merit, is hereby dismissed with costs of Rs.10,000/- (Rupees ten thousand only), payable by the applicant to the defendants (vide separate final order). In view of disposal of the SA, all the pending IAs are closed.

¶73

Presiding Officer

David Geevarghese v. State Bank of India

Case brief

What is this about?

What did the court decide?

David Geevarghese 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

Abdul Nazar versus Urban Co. operative Bnak Ltd.

Indian Bank versus M/S Raj Kumar Bajpai

M S Jagsa Enterprises versus Indian Bank (Allahabad Bank)

State Bank of India versus Sh Malkit Singh @ Malkiat Singh

Deepak Thiran versus Baroda Uttar Pradesh Gramin Bank

Ms Muntaha Foods Pvt. Ltd. versus Bank of Maharashtra