Dismissed

L Sivakumar v. State Bank of India

DRT19 Feb 2024SA/495/2023

Case brief

AI extract

What is this about?

In this Securitization Application, the Debt Recovery Tribunal rejected the Applicant's attempt to invalidate an Advocate Commissioner notice for taking possession of collateral property. The Tribunal held that procedural requirements were met, the security interest was registered, and previous remedies were exhausted or failed.

What did the court decide?

The Securitization Application stands dismissed with no costs awarded to the Applicant.

L Sivakumar versus State Bank of India — Execution and Attachment | 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 19^th 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. 495 of 2023

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Between

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L. Sivakumar, S/o. S. Lakshmanan, 28/264 (2) Thejal, Near Yakkara Railway Gate, Palakkad, Pin -678 001.

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--- Applicant

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And

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Authorised Officer, State Bank of India, Asset Recovery Management Branch, RS Building, M.G. Road, Ernakulam – 682 011.

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State Bank of India, Palakkad Town Branch, Palakkad, represented by Its Chief Manager.

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--- Defendants

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This Securitization Application coming on 05.01.2024 for final hearing before me in the presence of Mr. K.T. Shyam Kumar, Advocate for the Applicant and Ms. Keerthi K. Narayan, 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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SA No.495 of 2023

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O R D E R

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This Securitisation Application was filed on 13.09.2023 seeking to set aside Annexure-A6 Advocate Commissioner notice declaring that all the measures undertaken by the defendants under the provisions of SARFAESI Act and Rules as invalid and is in contravention of the provisions of SARFAESI Act and Rules and to set aside Annexure-A5 Order issued by the Chief Judicial Magistrate Court, Palakkad and to set aside Annexure-A1 and A3 notices issued by the 1^st defendant and declare that the defendant bank has no security interest on the mortgaged property as the same has not been registered with the Central Registry and to pay the cost of the proceedings to the applicant.

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Availment of housing loan to a tune of Rs.39,00,000/- from the 2^nd defendant bank upon creation of security interest over the immovable property measuring an extent of 2.83 Ares in Sy. No.1858/B/2 in Block No.33 in Yakkara Village of Palakkad Taluk belonging to the applicant and his wife in favour of the 2^nd defendant bank and default in repayment of the outstanding loan due is admitted by the applicant in the SA.

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Due to default in repayment of the outstanding loan due, the loan account of the applicant was classified as NPA on 30.12.2020 and demand notice Annexure-A1 was issued to the applicant and his wife calling upon them to pay the outstanding loan due within 60 days from the date of receipt of the notice. Admittedly, the applicant neither sent any objection/representation to the demand notice nor did clear the outstanding liability due to the 2^nd defendant bank. Therefore, the 1^st defendant issued Annexure-A3 Possession Notice dated 03.11.2022 for taking symbolic possession of the secured asset. Indisputably, the applicant did not challenge the above Possession Notice by filing SA before this Tribunal.

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The defendants filed application, Annexure-A4 before the Chief Judicial Magistrate Court Palakkad under Section 14 of the SARFAESI Act, 2002. Annexure-A5 Order came to be passed on 25.05.2023 for taking physical possession of the secured asset. Pursuant to the direction given to the Advocate Commissioner in MC No.323/2023, he issued Annexure-A6 notice to the applicant and his wife informing them that he would take physical possession of the secured asset within 15 days from the date of receipt of the notice.

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It is the contention of the applicant that security interest was not registered with the Central Registry and that amount claimed by the 2^nd defendant bank is exorbitant since the applicant paid an amount of Rs.33,77,529/- during the period from 2013 – 2014 to

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Page 2 of 5

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SA No.495 of 2023

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2020-2021 and that Demand Notice was not published in newspapers and that since the date of classification of loan account as NPA is not mentioned in the Demand Notice, it is invalid and that the 2^nd defendant bank failed to furnish the copies of the documents relating to the loan account and the proceedings initiated by the defendants under the SARFAESI Act, 2002 is per se arbitrary and illegal and that the applicant is ready to settle the account by way of OTS or pay by monthly instalments and therefore the SA may be allowed.

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The rival contention of the defendants is that since the applicant defaulted in repayment of the outstanding loan due, his loan account has been classified as NPA as per RBI guidelines, and that the Possession Notice was not challenged by the applicant within the period of 45 days and that the security interest has been registered with the Central Registry and that since the applicant did not send any objection/representation to the Demand Notice, he is not entitled to contend that Demand Notice is invalid and that the direction of the Hon'ble High Court of Kerala as per Annexure-B1 judgment in W.P.(C) No. 41184/2022 directing the applicant to pay the outstanding amount in 20 equally monthly installments was not complied with and that W.A. No.530/2023 preferred by the applicant was also dismissed and that SLP No.19343/2023 preferred by the applicant before the Hon’ble Supreme Court was also dismissed and that the applicant is not entitled to challenge the Advocate Commissioner notice, Annexure-A6 and that amounts remitted by the applicant was properly given credit to his loan account and that copies of the loan documents were furnished to him and that therefore the SA is liable to be dismissed with costs.

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The applicant has himself admitted in the SA with regard to issuance of Annexure-A1 Demand Notice and he has also produced the copy of the same in the SA. Hence, there is no necessity for the defendants to publish the Demand Notice in newspapers. Admittedly, in Annexure-A1 Demand Notice the date of classification of the loan account as NPA is not mentioned, though there is mention with regard to classification of loan account as NPA due to default in repayment of the outstanding loan due. The applicant has not averred in the SA as to how he got prejudice over the non-mentioning of the date of classification of loan account as NPA in the Demand Notice. Further, the applicant having failed to raise the aforesaid issue by sending objection to the Demand Notice is not entitled to raise the aforesaid issue now.

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The defendant has produced, Annexure-B3, copy of report to show that security interest created by the applicant and his wife over the immovable property has been registered with the Central Registry. The applicant has not produced any material before this Tribunal to prove his contention that he has not furnished copies of the

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Page 3 of 5

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SA No.495 of 2023

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documents pertaining to his loan account pursuant to his representation or requisition letter sent to the 2^nd defendant bank. The applicant has also not produced any material to prove his claim that payments remitted by him was not given credit to his loan account.

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The applicant has not produced copy of the affidavit filed by the 1^st defendant in MC No.323/2023 before the Chief Judicial Magistrate Court, Palakkad. He has not also specifically averred in the SA as to whether the details as required under the proviso (i) to (ix) to the provisions of Section 14(1) of the SARFAESI Act, 2002 were not furnished in the affidavit. However, he has produced copy of the petition filed in MC No.323/2023 as Annexure-A4 wherein the details such as availment of housing loan by the applicant and his wife upon creation of security interest over the immovable property, default in repayment of the outstanding loan due, classification of loan account as NPA on 28.02.2020, issuance of Demand Notice to the applicant and his wife, failure to send representation/objection to the Demand Notice or to clear the outstanding liability, issuance of Possession Notice and its publication in newspapers, resistance of the applicant to take physical possession of the secured asset, the total outstanding liability as on the date of filing of the application, description of the property with its boundaries are furnished as required as per clause (i) to (ix) to the provisions of Section 14(1) of the SARFAESI Act, 2002. A perusal of Annexure-A5 order passed in MC No.323/2023 shows that the learned Chief Judicial Magistrate, Palakkad after having perused the contents of the petition and having satisfied over the same, passed Order appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued Annexure-A6 notice to the applicant and his wife for taking physical possession of the secured asset, pursuant to the direction given to him in MC No.323/2023. Hence Annexure-A6 notice cannot be challenged by the applicant.

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The applicant has miserably failed to prove his case that he is entitled to get reliefs sought for in the SA.

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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. In the result, S.A No.495 of 2023 stands dismissed. No costs.

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

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

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

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SA No.495 of 2023

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

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Sl. No.	Date	Particulars
1.	03.02.2022	True copy of the demand notice issued by the 1^stdefendant under Sec.13(2) of theAct.	Annexure-A1
2.	10.10.2022	True copy of the representation filed by the applicant before the1^st defendant.	Annexure-A2
3.	03.11.2022	True copy of the possession notice.	Annexure-A3
4.	21.12.2022	True copy of the application filed as M.C. No. 323/2023 before the CJM Court,Palakkad.	Annexure-A4
5.	25.05.2023	True copy of the Order of the CJM Court,Palakkad.	Annexure-A5
6.	02.08.2023	True copy of the notice issued by the Advocate Commissioner.	Annexure-A6

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List of documents filed by the defendants along with the written statement

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Sl. No.	Date	Particulars
1.	10.01.2022	True copy of the judgment in W.P (C) No.41184/2022.	Annexure-B1
2.	10.03.2023	True copy of the judgment in WA No.530/2023.	Annexure-B2
3.	---	True copy of the registration particulars ofthe secured assetwiththe CERSAI.	Annexure-B3

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 5 of 5

L Sivakumar v. State Bank of India

Case brief

What is this about?

What did the court decide?

L Sivakumar v. State Bank of India

Case brief

What is this about?

What did the court decide?

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