Dismissed

Eldho P U v. State Bank of India

DRT16 Oct 2024SA/505/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribune at Ernakulam dismissed an application by a loan defaulter challenging the bank's symbolic possession of secured assets and the application of Section 14(1) SARFAESI procedure due to alleged high interests, rejecting the claim for failure to establish case.

What did the court decide?

The Securitisation Application No.505 of 2023 stands dismissed; no costs awarded to either party.

Eldho P U versus State Bank of India — Company and Corporate | 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 16^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. 505 of 2023

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Between

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Eldho P.U., S/o. Ulahannan, Pattupalayil House, Makiyad P.O., Vellamunda, Wayanad District-670 731.

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--- Applicant

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And

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State Bank of India Represented by its Authorized Officer, Mananthavady Branch, Code 70321, Mysore Road, Mananthavady -670 645.

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Chief Manager and Authorized Officer, State Bank of India, Asset Recovery Management Branch, 1^st Floor, R.S. Building, Metro Pillar No.697, Opp. Maharajas College Ground, M.G. Road, Ernakulam-682 011.

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--- Defendants

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SA No.505 of 2023

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This Securitization Application coming on 24.09.2024 for final hearing before me in the presence of Ms. Gayathri Krishnan, Advocate for the Applicant and Ms. Umarani M.N., 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 12.09.2023 to declare the action of defendants in taking symbolic possession of the secured asset is not in accordance with the mandatory provisions stipulated under the SARFAESI Act 2002 and to pass an order restraining the defendants from taking possession and conducting sale of the secured asset pursuant to Annexure-A6 order and A7 commission notice issued by the Advocate Commissioner in CMP No.6908/2023 on the file of the Chief Judicial Magistrate Court Kalpetta and to order for cost of this proceeding to the applicant.

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The applicant has admitted the availment of various credit facilities from the 2^nd defendant bank upon creation of security interest over the immovable properties situated in Re.Sy.Nos.238/1, 506/1, 506/2 in Kanjirangad Village, Mananthavady Taluk, Wayanad District. The applicant has also admitted his default in repayment of the outstanding loan due to the 2^nd defendant bank. Hence the loan accounts of the applicant came to be classified as Non-performing on 16.10.2022 and demand notice dated 12.06.2023 Annexure-D1 was issued to the applicant calling upon him to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. The applicant has admitted the receipt of the Demand Notice. The defendants have also produced copy of acknowledgement card Annexure-D2 to prove the service of Demand Notice on the applicant. Indisputably, the applicant neither sent any objection/representation to the demand notice nor did he clear off his liability due to the defendant bank.

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Since the applicant failed to respond to the terms of the Demand Notice, Annexure-D1, possession notice dated 18.08.2023, Annexure-A5 was issued for symbolically taking physical possession of the secured asset. The defendants have produced copy of affixture of report Annexure-D3 and copy of photograph, Annexure-D4 and copies of newspaper publications Annexure-D5 and D5(a) in order to prove their contention that possession notice was affixed conspicuously on the secured asset and that it was published in Mathrubhumi edition dated 20.08.2023 and The Hindu edition dated

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Page 2 of 7

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SA No.505 of 2023

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20.08.2023. Since the applicant failed to discharge his liability due to the 2^nd defendant bank, the defendants filed petition and affidavit under Section 14 (1) of the SARFAESI Act, 2002 before the Chief Judicial Magistrate Court, Kalpetta. Order dated 01.12.2023, Annexure-A6 came to be passed in CMP No.6908/2023 appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued notice dated 27.02.2024 to the applicant informing him that he would take possession of the petition schedule property on 12.03.2024.

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The counsel appearing for the applicant submitted that the applicant was regularly remitting the EMI and that the 1^st defendant bank levied interest, penal interest and other sub charges over the loan making the applicant impossible to pay the loan regularly and that the payment of around Rs.8,00,000/- towards agricultural loan in the month of October, 2022 was not considered by the 1^st defendant bank while issuing Annexure-A4 notice and that thought the applicant raised his objection with regard to levy of exorbitant interest towards agricultural loans, the defendants issued AnnexureA5 possession notice and obtained Annexure-A6 Order from the Chief Judicial Magistrate Court, Kalpetta for taking physical possession of the secured asset and that therefore, SA may be allowed as prayed for.

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The counsel appearing for the defendants submitted that there is no illegality in the classification of loan account as NPA and that though sufficient opportunity was given to the applicant to clear off his liability, he failed to discharge the same and that hence AnnexureA5 possession notice was issued and that subsequently Annexure-A6 order was passed in CMP No.6908/2023 for taking physical possession of the secured asset and that no irregularity has been pointed out by the applicant in the SA and that the outstanding amount as on 03.09.2024 is Rs.54,48,913.88 and that therefore SA may be dismissed with cost to the defendants.

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The applicant has not averred in the SA as to whether the requirements contemplated under Clause (i) to (ix) to the proviso of Section 14 (1) of the SARFAESI Act, 2002 were not complied with in respect of filing of affidavit in CMP No.6908/2023 and that AnnexureA6 order passed in CMP No.6908/2023 suffers from any infirmity or procedural irregularity. A perusal of Annexure-A6 order shows that the learned Chief Judicial Magistrate Kalpetta after having perused the contents of the affidavit and the documents filed in support of the affidavit and having satisfied over the same, passed order appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued Annexure-A7 notice to the applicant for taking physical possession of the secured asset pursuant to the direction given to him by the learned Chief Judicial Magistrate

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Page 3 of 7

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SA No.505 of 2023

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Court Kaleptta in CMP No.6908/2023. The challenge of Annexure-A7 notice without challenging Annexure-A6 order by the applicant is unsustainable.

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The applicant is failed to establish his case so as to get the reliefs sought for in the SA.

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In the result, S.A No.505 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 16^th day of October, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 4 of 7

SA No.505 of 2023

S C H E D U L E

District : Wayanad Taluk : Mananthavady Village : Kanjirangad Sy. No. : 238/1 Extent : 8.09 Ares

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Description

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All part and parcel of land having an extent of 08.09 Ares, comprised in Sy. No.238/1 in Kanjirangad village, Mananthavady Taluk, Wayanad District along with a residential building situated therein covered under Sale Deed No1500 of 2000 of Vellamunda S.R.O.

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Boundaries

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East	: Property of Devassia
South	: Palery Njaralode Road
West	: Property of Saju
North	: Property of Baiju.

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(Su. WILLYAHM) PRESIDING OFFICER

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Page 5 of 7

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SA No.505 of 2023

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

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Sl. No.	Date	Particulars
1.	22.08.2023	True photocopy of the account statement issued by the 1^stdefendant bank in Agri. Cash Credit bearing No.67368450331to the applicant	Annexure-A1
2.	22.08.2023	True photocopy of the account statement issued by the 1^stdefendant bank in Agri. Term Loan bearing No.67368449892 to theapplicant.	Annexure-A2
3.	22.08.2023	True photocopy of the account statement issued by the 1^stdefendant bank in the mortgage loan bearing No.67368448196 to the applicant.	Annexure-A3
4.	18.10.2022	True photocopy of the Section 13(2) notice issued by the 1^stdefendant bank to theapplicant.	Annexure-A4
5.	18.08.2023	True photocopy of the Possession Notice issued by the 2^nddefendant to the applicant.	Annexure-A5
6.	01.12.2023	True copy of the order passed in CMP No. 6908/2023 by the Chief Judicial Magistrate CourtKalpetta.	Annexure-A6
7.	27.02.2024	True copy of the notice issued by the Advocate Commissioner.	Annexure-A7

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

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Sl.	Date	Particulars
No.
1.	12.06.2023	True copy of the demand notice issued to the applicant.	Annexure-D1
2.	---	True copy of the AD card duly signed by the applicant.	Annexure-D2
3.	18.08.2023	True copy of the affixture report.	Annexure-D3

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Page 6 of 7

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SA No.505 of 2023

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4.	---	True copy of the photograph evidencing affixture of the Possession Notice in the premises ofthe secured property.	Annexure-D4
5.	20.08.2023	True copies of the newspapers where	Annexure-D5
		the Possession Notice was published.	& D5 (a)

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 7 of 7

Eldho P U v. State Bank of India

Case brief

What is this about?

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Eldho P U v. State Bank of India

Case brief

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